NRI Real Estate Corner
As you might imagine, real estate agents field quite a few questions every day. People are naturally curious, and it’s an agent’s job to guide folks through the often-complex world of home buying and selling. You might also imagine that some questions about real estate come up more often than others. Whether you’re a first time buyer or repeat buyer who could use a refresher on how deals get done, here’s are some answers to the questions that come up most often.
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Q. Do non-resident Indian citizens/ foreign citizens of Indian origin require permission of Reserve Bank to acquire residential property in India?
Ans. Reserve Bank has granted general permission to foreign citizens of Indian origin, whether resident in India or abroad, to purchase immovable property in India for their bona fide residential purpose. They are, therefore, not required to obtain permission of Reserve Bank.
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Q. In what manner the purchase consideration for the residential immovable property should be paid by foreign citizens of Indian origin under the general permission?
Ans. The purchase consideration should be met either out of inward remittances in foreign exchange through normal banking channels or out of funds from NRE/FCNR accounts maintained with banks in India.
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Q. Are there any formalities required to be completed by foreign citizens of Indian origin for purchasing residential immovable property in India under the general permission?
Ans. They are required to file a declaration in form IPI 7 with the Central Office of Reserve Bank at Mumbai within a period of 90 days from the date of purchase of immovable property or final payment of purchase consideration alongwith a certified copy of the document evidencing the transaction and bank certificate regarding the consideration paid.
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Q. Can such property be sold without the permission of Reserve Bank?
Ans. Reserve Bank has granted general permission for sale of such property. However, where the property is purchased by another foreign citizen of Indian origin, funds towards the purchase consideration should either be remitted to India or paid out of balances in NRE/FCNR accounts.
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Q. Can sale proceeds of such property if and when sold be remitted out of India?
Ans. In respect of residential properties purchased on or after 26th May 1993, Reserve Bank considers applications for repatriation of sale proceeds up to the consideration amount remitted in foreign exchange for the acquisition of the property for two such properties. The balance amount of sale proceeds if any or sale proceeds in respect of properties purchased prior to 26th May 1993, will have to be credited to the ordinary non-resident rupee account of the owner of the property.
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Q. Are any conditions required to be fulfilled if repatriation of sale proceeds is desired?
Ans. Applications for repatriation of sale proceeds are considered provided the sale takes place after three years from the date of final purchase deed or from the date of payment of final installment of consideration amount, whichever is later.
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Q. Are foreign nationals of Indian origin allowed to purchase immovable property in India?
Ans. Yes, foreign nationals of Indian origin, whether resident in India or abroad have been granted general permission to purchase immovable property in India.
Documents Required for Real Estate
- Documents that should be verified before buying a residential / commercial unit:
- - Ownership documents of land owner including title certificate.
- - Development Agreement, if the developer is not the owner and has acquired the development rights.
- - Intimation of Disapproval (IOD) and the building plan/s approved by competent authority.
- - Commencement Certificate.
- - Other permissions issued by the competent authority depending on the nature of plot/type of development.
- - If the construction is completed then Occupancy Certificate or Building Completion Certificate.
- - Draft of Agreement for Sale and brochure for specifications, layout and amenities in the flat/complex/layout.
