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- Hi Jack,
It is really interesting yo note that more and more N.R.Is are being interested to invest in Indian property market.
Depending upon my personal limited knowledge, as an N.R.I you are prohibited to invest in agricultural land, plantations and farm houses. But, allowed to invest in residential and commercial projects.
You are correct that all the property transactions taken by N.R.Is are governed by guidelines issued by R.B.I only as these transactions involve foreign currency transactions. It will be really good, if you check at their own site for the latest updates.
As far as banking services for N.R.Is are concerned, more and more banks are plunging into the market to cater the N.R.Is to provide special home loans and other related services. Elaborating more on them here solves no purpose.
You can try searching for "N.R.I Home Loans" on internet and there you are.
Hope this reply good give you an initial starting point.
- Greetings to all
Well thankyou for the response Parul.
But I am a bit disappointed with your response as before reading your response I was planning to buy a farm house in India. I have done alot of research on Farm Houses in India on the internet in the past, but I think all gone in vain.
Still, Is there any way to buy a farm house in India ? Can I buy the property in my family members name who are resident Indians ?CommentQuote0Flag
- FAQ's for NRI's buying property in India
Information for NRI's
Here are some vital information for the NRIs.
1. Non-resident Indians holding Indian passport do not require any permission from RBI for acquiring Immovable Property for bonafide residential purposes as section 31 of FERA 1973 is not applicable to them.
2. Non-resident Indians holding Indian passport may pay the purchase consideration either by remittance of funds from abroad through normal banking channels or out of NRO Account or out of NRE Account or out of FCNR Account.
3. RBI has granted General Permission to Non-resident Indians holding Foreign Passport (i.e. Foreign Citizens of Indian Origin) to acquire, hold, transfer or dispose off by way of sale or inheritance immovable properties situated in India provided :
1. The property is for the Purchaser's bonafide residential purpose.
2. The purchase consideration is met either by remittance of funds from abroad through normal banking channels or out of NRE/FCNR Account or out of FCNR Special Deposit Account.
4. Foreign citizens of Indian origin are however required to declare the properties to RBI within a period of 90 days from the date of purchase in Form IPI 17. The following documents must be submitted along with the declaration.
1. A certified copy of the purchase deed or a certificate from the Co-operative Housing Society or an Association of the apartment owners as an evidence of transfer / registration of the property in the declarant's name.
2. Certificate from the declarant's bankers in India evidencing receipt of inward remittance(s) in foreign exchange through normal banking channel or withdrawal of funds from the declarant's NRE/FCNR account/ FCNR Special Deposit Account and payment of consideration for the property out of those funds.
5. Where a Foreign Citizen of Indian origin wishes to acquire a property, out of funds held in NRO Account then the permission from RBI will be required which can be applied for in Form IPI 1.
6. Where a Foreign Citizen of Indian origin wishes to acquire a property from the sale proceeds of another property, prior permission of RBI is essential and may be obtained by applying in Form IPI 1.
7. Any number of properties can be acquired by non-resident Indians regardless of whether they are holding Indian passport provided they are required for bonafide residential purposes.
Under Section 29 of the Foreign Exchange Regulation Act 1973, the Reserve Bank of India has granted General Permission to Foreign Citizens of Indian origin and Indian citizens residing outside India to let out their immovable properties (Commercial / Residential).
The rental income or proceeds of any investments out of such income shall be repatriable outside India subject to Income tax being paid.
The Reserve Bank of India on an application in Form IPI I may consider favourably the acquisition of residential property by Foreign Nationals of Non-Indian origin provided:
1. The purchase consideration is met out of funds remitted from abroad.
2. The property is acquired for bonafide residential use.
3. The foreign National of Non-Indian origin undertakes not to repatriate the sale proceeds.
Following are some of the most common questions asked by NRIs:
Q. Do non-resident Indian citizens/ foreign citizens of Indian origin require permission of Reserve Bank to acquire residential property in India?
A. 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.
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?
A. 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.
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?
A. 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.
Q. Can such property be sold without the permission of Reserve Bank?
A. 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.
Q. Can sale proceeds of such property if and when sold be remitted out of India?
A. 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.
Q. Are any conditions required to be fulfilled if repatriation of sale proceeds is desired?
A. 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 instalment of consideration amount, whichever is later.CommentQuote1Flag
- Sorry - U Cant Invest Directly
According to my knowledge Jack you cant directly invest in property like a farm house. the better alernative is buying the farm house in some others name, like in your family members name who are Indian Residents and are currently living in India itself.
Non-resident Indians can freely purchase and sell residential and commercial properties in India. Foreigners will have to obtain RBIs permission for the same. However, a foreign citizen of Indian origin does not have to obtain RBI's permission for purchasing and selling residential and commercial properties (other than agricultural/plantation land and farm house) for bonafide purposes provided the purchase is met through foreign exchange.In such cases, a declaration has to be submitted to RBI within 90 days of the purchase.
The NRIs can freely let out their residential or commercial properties in India. The rental income should however be routed through the NRO account. The rental income is freely repatriable from 1996-97 and is subjected to production of undertaking/certificate regarding payment of tax from the Income Tax authorities.
I think I got you rightCommentQuote0Flag