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Real Estate And Mortgage
Real Estate And Mortgage
Published on: Jun 6, 2015 @ 18:29
The Indian property market has always grabs the attention of NRI and has always been a lucrative investment option for them. NRI investment in Indian housing sector has become more affordable and extremely lucrative as the value of the rupee is depreciating against the US dollar and real estate offers better returns. The other reason of investment in the Indian property market by NRI is, buying a property in the native country.
The Indian laws, over the years, are simplifying the rules and the RBI along with the Foreign Exchange Management Act (FEMA) has become lenient in terms of rules and regulations for non-residents who want to buy a property in India. The RBI governs such transactions and the rules for any such property transaction fall under the FEMA.
If you are an overseas Indian, you need to know some basic rules before investing in a residential or commercial property in India:
An NRI or Person of Indian Origin (PIO) can own both residential as well as commercial properties in India and there is no restriction on the number of properties he/she can buy. RBI permission is not required for an NRI to buy residential or commercial property in India. However, an NRI can not buy any agricultural land, farm house and plantation land in India. He/She can have ownership of such property only if they have been inherited or gifted.
Examine all the legal documents before buying the property. In some cases, the residential projects are built on agricultural land without securing approval from the government. In such cases, the investment will be deemed illegal, irrespective of who buys the land. Therefore, make sure to check the title deeds of the property in original, and that it is solely in the name of the seller.
Take a bank release in case it was at any point of time under mortgage and also take a no dues certificate from the seller at the time of purchase to ensure there is no water, electricity or any other pending bills with the authorities.
For new constructions, land title should be clear and the builder should have taken all approvals and permits such as environment and municipal clearances and the authority to transfer the undivided share of land to each apartment owner and the entire plot to the society upon completion of the project from the civic authorities. Even for projects under construction, insist on these documents to ensure that your investment is safe and secured.
It would be advisable to get the papers verified by a lawyer and ensure that the builder has secured all the necessary approvals.
After having identified the property and arriving at a price at which the sale is agreed a sale agreement must be drawn. Once the sale deed is completed, you need to get it registered at the sub-registrar or Sub District Magistrate by paying registration cost and stamp duty. The stamp duty payable varies from state to state.
You can appoint a representative in India with a power of attorney to act on your behalf. A power of attorney can be given to execute on your behalf to complete formalities such as registration, possession, execution of agreement of sale, any contracts, deeds as well as mortgage, lease or even sell. So, make sure the kind of authority you are giving to the person through the power of attorney. Just get it documented properly by a professional lawyer.
The payment of purchase price, if any should be made from either funds received in India through normal banking channels or funds held in non-resident bank account. You can pay through rupee denominated non-resident ordinary (NRO) or non-resident external (NRE) accounts and Foreign Currency Non-Resident (FCNR) accounts. Financial institutions provide home loans to eligible NRI and the repayment can easily be done by inward remittance through the proper banking channel.
Ajay Verma, founder and writer of TheHousingWorld, a real estate and mortgage news website. He has over fifteen years of rich experience in the above mentioned industries.
