NRI BUYING PROPERTY IN INDIA

Indians going abroad for brighter financial prospects has been an ongoing phenomenon for decades. But in the past few years NRIs are looking to buy property in India. Some see it as a way of staying in touch with their cultural identity, others as a purely commercial exercise. Whatever the reasons, the experiences that NRIs have had to buy property in India as an investment, management, and development have been varied and interesting.
TYPES OF INVESTMENT
A large section of those who buy property in India do it largely for their own use. These are people who plan to live abroad for a few years, earn money, come back to India to raise their children and be close to family and friends. At that point, they need to have a home to or a property that they can liquidate to set up life in India.

Another category buys large holdings as a business proposition in India. The investment is in either residential, commercial, housing developments or a combination. Often, projects can be an outcome of a NRI property owner, an Indian developer, and a foreign architect and project consultant. The permutations are varied depending on the property and the financial commitment expected from all parties.
MONEY MATTERS
People who buy property in India for his own use is generally prepared to invest between Rs.25 lakhs to Rs.75 lakhs for apartments or residential sites. Flats are the safest option since a reputed builder can deliver the goods without problems and the money invested is in trusted hands. If the NRI buyer has a trusted family member to negotiate a land deal and the construction of the house, it is a considered option.

Tharini Chakra borty, who works with Synopsys in the US, recently bought a flat in India. “People finance property by taking a loan on their home equity in the US. Some even buy with cash from stock market gains. They lease it out or their relatives occupy the property till they want it in the future”. Vibhas Bhalerao, a CA in London and prospective investor, has interesting observations, “I want to buy a flat now in Bangalore as an investment, a part-time retirement option for the future, and also as a physical, tangible link with India for my child. In fact, British citizens of Indian origin are also considering retiring in India because of the climate here that is warm, often dry, and the infrastructure has improved over the years. English being widely spoken, and cost of living and medical care being cheaper than in Southern Europe are attractive lures”, he says.

Some investors even approach Indian banks for loans. Some options include4 hiring agents for a fee to manage the property in the absence of the NRI owner. Initial buyers prefer starting small with Rs.25 lakhs, and if successful, they are even ready to repeat the process to buy property in India different cities.

A Process to buy property in India.

The process to buy property in India stretches far beyond the actual purchase of the home. It has far-reaching effects and consequences if not handled properly. There are quite a few commonly made mistakes in home buying, a lot of them have to do with the contracts that are necessary to complete the sale and others are mainly related to skipping vital parts of the process in order to make a quick purchase. This tends to happen when there are competing offers. Sellers think they have hit a gold mine when there are competing offers on their home.

This is the kind of environment where buyers can get taken advantage of, so be careful. One of the most commonly skipped steps is the home inspection. Bad idea. How do you know what the possible concerns with a house are? What happens if you win the bid war only to have to spend twice what you saved in fixing the house? Was it worth it? Home inspections are vital to ensuring that buyers are getting a good, safe product. If a home sale comes down to the condition of skipping the inspection you may want to question the reason for that condition.

When you buy property in India, try to avoid verbal agreements in the deal at all costs. As this kind of agreement is almost impossible to verify, make sure that every aspect of the sale, its subjects, what comes with the home is all detailed in writing and signed by both parties. With a purchase of this magnitude everything should be detailed and recorded. This also applies to the original listing information. It's a good idea to verify all the listing info at the start of the purchase. If this info is incorrect, take the time to check for other inconsistencies.

The focus of this article is not to make you nervous about buying a home, merely to make you aware of some of the things to look out for when you buy property in India. It would be nice to think that all sellers are scrupulous and honest, but if that were so then articles such as this one would not be necessary. Be careful and do your homework when you buy a home and confer with your realtor on all aspects of the sale. They are the best people to help you avoid any pitfalls.

PRECAUTIONS TO BE TAKEN BEFORE BUYING A PROPERTY IN INDIA.

Though a sale contract can be signed, the property is not legally owned till the deal is fully closed and you get (symbolically) the key of the property. Thus, the property of the house is perfected when you take possession of the property and when you are legally entitled to take that possession. It’s not enough with the sale contract; you need to actually move in.

PROPERTY AND POSSESSION

When you buy property in India, transferring the ownership of came requires great formality. In order to rightfully own a house you need not only to possess it but also to have a legal title over it. This title will be the consequence of a sale contract, a donation, and inheritance, etc. On many places, it is even possible to obtain such title by the continual and uninterrupted possession of a property for a long period of time.

Thus, possession is not the same as property and even if you possess a property, there is no guarantee that you rightfully own it. Tenants recognize the ownership of property on the head of the landlord, they possess and enjoy the property but they don’t own it. The consequences of this distinction are very important when it comes to the precautions you need to take when purchasing a property. The risk in buying property in India is to purchase a property from someone that doesn’t own it or from someone that is subject to a court process.

Thus it is important for you to go through all the details before you buy property in India request information from public records and registries so as to make sure that the property is rightfully owned by the one claiming to own it and that there are no processes going on that may jeopardize the transaction or eventually put in risk your ability to keep the property. The aid of a lawyer or trusted real estate agent is a must before you buy property in India.

THINGS TO REMEMBER WHEN YOU BUY A PROPERTY IN INDIA.

The buying of a home in India is one of the most exhilarating jobs that anyone can make. It is usually the culmination of many years of hard work and has a sense of accomplishment like no other. So buy property in India stands to reason that it is also the purchase that should be the most planned and carefully made. This is likely going to be your base of operations for many years to come so spend a while getting comfortable will all aspects of the process before you jump to buy a property in India.

Now, before you buy property in India you must have your financial life well in hand. More specifically, you must have a good hold on your credit. This may involve some leg work so be ready for it. Get your credit report from your bureau and review it in depth. Go as far back as necessary. Make sure that there are no outstanding items that have not been taken care of. If anything is there then see to it as quickly as possible and retain documentation from the bureau that it is dealt with. This is not only for your records but it might be helpful when applying for your mortgage. Next, spend some time researching your mortgage options. Try to find one that suits you and your needs. Make sure that you can afford the payments each month and try to get the best interest rate possible. Remember it is not enough to have a pre-qualification, if you really want to make your home shopping and buying easier then get a full pre-approval. This pre-approval will ensure home sellers that your financing is already in place and that they need not worry about your offer being conditional on your approval for a mortgage.

When you actually start to buy property in India, make a few lists. The most important one should be the aspects of the home that you simply cannot do without. This usually includes things like number of bedrooms, location & proximity to work, fenced yard etc. The secondary list should be those things that you would really like but are not essential. Usually if you give these lists to your realtor they will be able to refine your property options quiet a bit. This will help them to eliminate property that do not fit your criteria and concentrate on the kind of property in India you like to buy in India.

Some clarification for NRIs/PIDs who want to buy property in India

Most non-resident Indians and persons of Indian origin want to buy property in India for themselves or for their family. Generally, NRIs/PIOs have a doubt in their mind as to whether they can invest in a residential house property in India by remitting funds from overseas under the current foreign exchange regulations. This article attempts to address those concerns.

Who are NRIs/PIOs?

It is first important print to understand how the law defines NRI. NRI refers to an Indian citizen who is residing outside India. PIO here refers to an individual (not being a citizen of select countries such as Pakistan, China and Bangladesh) who at any time held an Indian Passport or whose father or grandfather was a citizen of India.

What can they buy?

They can buy any immovable property in India other than agricultural land, plantation and farm house. These days a number of options are available to buy properties/ houses of international standard in India with all the facilities such as club house and gymnasium.

Money for that buy

An NRI/PIO may use his own funds to buy immovable property in India. He can also avail of a housing loan for this purpose.

Own funds — the NRI’s own funds means money received in India by way of inward remittance from overseas out of income earned overseas or personal savings outside India or funds held in non-resident external (NRE) or non-resident ordinary (NRO) or foreign currency (non-resident) (FCNR) bank account.

Housing loans from banks — Authorised banks have been permitted to provide a housing loan to an NRI/PIO for to buy property in India. This is, however, subject to certain conditions. The quantum of loans, margin money and the period of repayment is at par with the housing loans provided to residents in India; the loan amount cannot be credited to the NRE/FCNR account; it has to be fully secured by equitable mortgage of the property proposed to be acquired, and if necessary, also by lien on the NRI’s/PIO’s other assets in India; the installment of loan and interest and other charges has to be paid by the NRI/PIO by remittances from outside India through normal banking channels or out of funds in the NRE/FCNR/NRO account in India. In the last case, the loan and interest can also be repaid out of the rental income of such property-bought in India.

Few tips/ advice for foreigners to buy property in India. Part-II

4) Investment potential

If you‘re looking to buy property in India make sure you search the property market properly. Look at it from the points of view of stability, growth potential and the liquidity of the real market- after all, it’s all you are buying in booming Indian property market that may fetch you good resale value.

5) Tax market

When you buy property in India find out both the local and overseas taxation liabilities relating to property purchase, rental, resale and gains. As taxation issues and liabilities change on a country by country you’re buying in, gain tax rebate if you sell after a stipulated period and on the sale also you are required to pay some form of income tax either’ back home’ or in the country in which the property is located and if you rent it out for an income, it will be regulated as per the guidelines stipulated by RBI/ Government of India.

6) Property Purchase via an Offshore Company

The option to establish an offshore company and buy property in India is an option available to most people, as per the provision/ guidelines of RBI but whether it is an appropriate course of action it depends on many factors. Such factors include whether such company has been established as per the laws relating to foreign company ownership as well as real estate in India. By using an offshore company to buy property in India by an individual can sometimes avoid or reduce their taxation liabilities, avoid certain expenses and even laws. But the applicability of the option is something that can only be determined on an individual case basis strictly as per the rules/ regulation of RBI/ government of India.

Few tips/ advice for foreigners to buy property in India. Part-I

Few tips to adhere to for success when you buy property in India. .Are you seeking your little corner of sun drenched heaven on earth? If you are, you’re certainly not alone!

Many Northern Europeans, Americans and Canadians are looking overseas for investment real estate or for holiday bolt hole and if you’ re considering buying a second home in the sun, a home from abroad or buy property in India and you’ re in hurry to get started, these few tips for success should set you off in the right direction.

1) Legal Advice

Legal systems differ from country to country so never assume that you understand how exactly the entire house purchase process is going to work, and never expect things to necessarily go exactly your way! To be assured of the fact that your personal interests are being looked after and that you, your money and your property are 100% secure, legal and legitimate, it is essential to seek independent legal representation in the country you’re considering to buy property in India.

This is especially true if you buy property in India where you do not speak the language. You will be putting your’ name, signature and bond to contract and legally binding documents… and however pleasant and helpful the real estate agent or vendor are it’s in your own best interests to make sure you have a local lawyer who is at your cost representing you at such times.

2) Necessary permission from RBI.

When a foreigner intends to buy property in India, he has to fulfil certain basic requirements and has to apply for seeking proper permission from the Chief General Manager, Reserve Bank of India and as per the guidelines stipulated by government.

3) Ongoing Communication

If you’re to buy a brand new property in India-either off plan or during its build phase-make sure you have some way of keeping in touch with the developer or managing agent. Ask in advance about how often you will be kept up to date with progress, whether they can email or send you regular visual updates and what level of ongoing communication you can expect from them. Buying property is a very big commitment-financially and emotionally-it’s important you’re not left in the dark, sitting back home wondering how on earth your investment is coming along. Sort out your lines of communication before you sign on the dotted line and make sure you’re entirely comfortable with how the process will work when you buy property in India

Mulls to buy property in India.

When Scarborough teachers Chitra and Raj Sunder decided to jump into a sizzling real estate market, they looked east to buy property in India.

They were among about 50 prospective buyers who showed up at an open house this week at the newly opened Mississauga office of Property Affaire, an India-based realty company that has detected an opportunity in the GTA’ large South Asian community-a group with dollars to invest and a lively aware to buy property in India burgeoning economy.

“We are looking at it from a purely investment perspective,” says Raj Sunder, 52, adding the couple has up to $200,000 to invest. “Investing in North American property is not that lucrative. We’ve been hearing a lot of good things about India and think that will generate a better rate of return. We prefer to buy a property in India (Chennai), where we are from, but we are buy property in India.

Adds Chitra, 45: “Yes, the affinity is there, we want to invest in our mother country (INDIA). But still, money is money. I’M a math teacher and I would like to have some numbers on what is the bottom line in terms of return on our investment in five years before use buy property in India. So we can know what we’re getting and make comparisons,”

India’s property boom took off in 2005, with prices rising as much as 40 percent in some cities. Last year, prices soared by 60 to 70 percent. In some overheated markets-Mumbai, Bangalore, Kolkata and cities such as Chandigarh, Noida, Gurgown and Ghaziabad in the National Capital Region around New Delhi – the value of high-end properties doubled and that is why more and more NRIs & Non-NRIs like to buy property in India.

The boom theme’ buy property in India’ is now spreading to smaller cities such as Pune, Jaipur, Agra and Ahmedabad. The value of the Indian realty sector will multiply 7.5 times by 2015, according to Merrill Lynch, though it has suffered a slight correction this year that sparked warnings the bubble may soon burst.

property in india

Circle rates to be announced shortly & shall add Rs 400cr to coffers-Buy property in India on fair & transparent terms.

As per an article appeared in today’s newspaper (17.04.2007) the government is very shortly going to fix the circle/floor rates of lands in Delhi & NCR depending upon their categories .These circle rates ,while on one side will add to government’s coffers ,the other side it will go a long way in maintaining transparency in property transaction ,it was announced by the finance minister while presenting the budget . After exercising transparency people will surely be attracted to buy property in India.

This is, however, a matter of great interest for NRIs as well as domestic buyers that all transactions while buying property in India shall be transparent and black money transaction will be avoided to a greater extent . Consequently builders / developers and property dealers shall be able to convince domestic and foreign buyers to buy property in India /Delhi/NCR on fair terms and transparency.

Property deals has been launched

Property deals has been launched by chief minister of Goa, Pratap singh Rajoji Rane

Naturally enough this restriction is quite extreme and it has been alleged that they like of estate agent, lawyers, builder and even those making private sales have been offering bribes and backhands to government officials to get around this stipulation for their client who want or thinking of purchasing buy property in India. The gravity of this accusation has not gone unnoticed; none have the incredibly far reaching implications for all those involved- especially those foreign buyers who have not bought property in India after being resident in Goa for the required 182 days.

Currently an initial investigation into a selection of property deals has been launched by chief minister of Goa, Pratap singh Rajoji Rane to find out whether this is any truth in the allegation. The worst case scenario facing anyone who has not adhered to letter of the law as stipulated in the foreign Exchange Management Act. Of 1999 is the confiscation of their property in India (Goa ) has to be heeded.

Property position in Goa

When to buy property in India (Goa), there are often differences in the legal system and if same followed, we may be back home. Sometimes there are quirks and anomalies and sometimes one is advised that the law as it is written is never upheld and that there are ways round certain obstacles etc. We fell happy to talk the advice of local legal or property seemingly endless reams of paperwork and bureaucracy. Just to attract him to buy property in India.

In Goa in India, which is an ever increasingly popular place for those search of place in the sun, there are incredibly strict rules in the place relating to the sale of freehold property to foreigners to buy property in India and those who have been guided around the legalities by less than scrupulous representatives of real estate profession are starting to panic as new crackdown is being discussed that could see being confiscated. This article contain essential advice for foreigners those who want to buy property in India (Goa).

Up to 3,000 Britons own property in India Goa and around 5,000 units of property have been sold to foreign buyers since the foreign Exchange Management Act 1999 came into force. The Act covers the legalities relating to purchase, sale and resale property of real estate India Goa to non-resident individual and foreigners and it clearly states that non-residents cannot buy real estate India Goa until they have been residential in Goa for 182 days in any one given financial years.

Foreigner must use the advice and services of only those estate agents

When buy property in India in Goa a foreigner must use the advice and services of only those estate agent who can present to their certificates of Services Tax Registration and Company Registration, use an independent lawyer who specilises in real estate law and can tell you whether and when you are eligible to buy property in India (Goa). Next you have to ensure your lawyer does detailed searches on the title of any parcel of land or piece of property you are contemplating to buy property in India (Goa) and can independently certify that there are no ownership disputes outstanding on the real estate.

Whatever you do, don’t send any money to your agent, builder, developer or solicitor to an account other than one held in Goa-their use of offshore account is illegal and if you pay money into them you have acted illegally. Do not trust anyone who says there are ways around the legalities do not try and corners. Take time finding out about the obligations you will have to fulfill as a foreign buyer and fulfill them. When you buy property in India (Goa).