When it comes to investment, real estate is a booming trend that people are time and time focusing on. With so many possibilities around, NRIs are finding ways to streamline their investments in the same with complete caution. If you are planning your real estate investment in India, it is important that you do focus on some important factors before.
Planning is the key. It is true that the global Indians across the world play a very crucial role when it comes to the Indian forex reserves. But, with the success stories around, the NRIs have actually found the real estate investment as quite a rewarding experience for themselves.
To help you better, we have sorted through some of the important pointers that an NRI should keep in mind before making the final investment.
Know about the Power of Attorney
The very first and possibly one of the most important of them all is to know about the general guidelines surrounding the power of attorney. If an NRI is not able to stay physically in the house they are buying in India, it is necessary that they give the PoA to someone who is in India. This is a necessity to ensure smooth execution of the transactions related to the property. The responsibilities associated in this are delegated and makes it easier for the NRIs to manage their assets effectively.
The government is also further working to amend some of the laws related to the registration. This is being looked into to further prevent the unnecessary bouts of frauds and disputes in check. In simpler terms, the power of attorney allows the NRI to sell, mortgage or get their property out on lease whenever it is required.
Know the details about the transaction process
Another important thing to consider is to know of the transaction process involved. Even if the individual does buy the house, it is necessary for the NRI to make the payment in the Indian currency. But, over the course of time, the process of transaction and investment has become a lot easier to manage when it comes to the real estate investment. The regulatory changes brought around in India are further an addition benefit for the process even further.
If you are an NRI trying to make some real estate investment in India, there are some important pointers that you need to have in your checklist. Some of the important factors in this involve property verification, the necessary documents needed, the KYC form filled, the involved payment process and all the tax related legalities involved in this. For this, if you aren’t physically present, it is better that you have someone to look through them effectively.
Know about the tax benefits
If you didn’t know, India has double taxation avoidance agreement with over 90 countries across the world. It is completely on the NRI if they want to claim the involved tax credit on the taxes that have been paid by them in India from the immovable property or asset that they have stationed in the country.
The NRI does have to contribute their share when it comes to the capital gains involved in India. If an immovable property is stabilized for over 24 months, it is specifically treated as a long term asset for the individual and is thus liable to be considered under the taxation regulations for 20% benefits.
Assess the type of property to invest on
When you are trying to invest on a real estate property as an NRI in India, it is very important that you look through the types of properties involved. NRIs do have the free reign to purchase any kind of property, be it commercial or residential. Some of the types of real estate that an NRI isn’t eligible to buy include agricultural land, farm house or a plantation property. It could be inherited or gifted but that is where the line is drawn.
Consider some of the regulations
Another one of the important things that an NRI needs to consider before making the real estate investment is to know of the regulations involved. All the transactions for the real estate investment by an NRI falls under the Foreign Exchange Management Act. It is important that you know about all the regulations made by the Reserve Bank of India. There are some ways that the payments can be made, some of the important ones include inward remittance and non-resident rupee accounts being some of the most common ones.
In addition, the NRIs can also apply for the loans in the country while making a purchase for the real estate in the country.
If you are planning on investing on some real estate in India, these are some of the important factors that one needs to keep in mind. Make sure to follow through all the necessary details before making the final deeds and such.
