NRIs can legally invest in Indian real estate. But they have to keep in mind fo0llowing points while investing.
NRIs with a valid Indian passport can invest in the Indian realty market, though there are a few restrictions. NRIs with a valid Indian passport need no prior approval unless they are citizens of some neighboring countries like Pakistan, Bangladesh, Sri Lanka, Iran, Nepal, Bhutan, Afghanistan or China.
They can buy as many properties (residential or commercial) as they want but are not allowed to buy agricultural land, plantation properties, and farmhouses unless such properties are gifted to or inherited by them. Transactions must be done in Indian rupees through regular banking channels via an existing NRI account. Just like Indian citizens, NRIs can also avail of home loans to purchase a property, with the maximum loan amount generally being 80% of the property value.
Finally, the RBI doesn’t impose any rule for immovable property which is inherited or gifted.
NRIs can lease or rent such properties without any restrictions. Be sure to hire a reputed lawyer to vet all property documents. It is important to verify the original title deed documents and ensure that the property title is in the name of the seller. Do a thorough check to ensure the seller has cleared all the dues related to the property.
Verify that the seller has not diluted the right to transfer the property to a buyer, and cross-check if the property is built on agricultural land without requisite government permissions as an NRI may get into legal problems in such transactions. In the case of under-construction properties, an NRI has to give a power of attorney to the developer or a trusted associate.
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Sources: Economic Times
