What type of property can an NRI buy?
NRIs can buy as many residential and commercial properties as they wish. However, the Indian constitution does not allow NRIs to invest in an agricultural land or farm house in their name. These properties
can only be inherited.
The payment can be done through funds remitted to India from abroad through regular banking channels. An NRI can also use funds from the Non-Resident External (NRE), Non-Resident Ordinary (NRO) or Foreign
Currency Non Resident (FCNR) accounts to buy a property in India.
Repatriation of capital gains
The NRI community is allowed to repatriate its original investment in equivalent foreign exchange value for either residential or commercial property. However, the gains generated through these transactions
have to be re-invested in the Indian real estate market itself. Further, in case of residential properties, NRIs are allowed to remit sale proceeds outside India for up to two properties without any approval
from the Reserve Bank of India (RBI). The apex bank's approval is required for the third and subsequent property purchases.
NRIs are eligible for a home loan in India under the same conditions that apply to an Indian citizen. There are a few differences in the rate of interest and loan tenure. The rate of home loan interest is
usually higher for an NRI as compared to an Indian resident. While a resident can get a maximum loan tenure of 30 years, for an NRI, it ranges between five and 20 years. There are some conditions that need to
be fulfilled before applying for a loan including the following:
- The NRI should be aged 18 years or above
- Should have a valid Indian passport
- Should be employed abroad for two years or more
- Should have a steady source of income
- Should possess a valid work permit