Investing in Indian Real Estate : What NRIs should know
The property prices in India are recording higher growth rate due to strong economy and rising household incomes. But for Nonresidential Indians (NRIs), this didn’t yield much returns due to the poor performance of the rupee against the US dollar. If you think about it from different perspective, it gives NRIs an opportunity to invest in the Indian real estate at cheaper costs. Almost in every town in India, from metros to tier 3 towns, you will observe a real estate boom. The suburbs are witnessing large construction projects. It is best time for NRIs to invest in Indian economy
The surveys also suggest NRIs are flooding the Overseas Indian Facilitation Centre (OFIC) with doubts and question regarding Indian real estates. The sector has become more open and transparent after the Government of India passed the Real Estate (Regulation and Development) Bill. The new law will protect the interests of the consumer and help to bring more stability in the sector. If you are an NRI and thinking to invest in your homeland, you should know about following basic rules about the Indian economy and its real estate sector.
Knowing ABCs first
First find out the nature of property you wish to purchase. The Reserve Bank of India (RBI), India’s central bank, has given clear guidelines which prevent NRIs from buying farm, plantations and agricultural land in the country. If a residential project has been built on an agricultural land, it will be scrapped by the government. So please verify the legal status on the land on your own or hire a consultant. Check the name of seller on the deed and look for the land status in those documents. If he is not being able to produce the original copy, it means that loan might be been taken against the property. It is always good to verify these things before you go ahead.
After initial stages of finalizing the place of land, one must hire a lawyer. You are more likely to be alien to Indian legal structure and clearances procedures. In India, municipalities give out environmental and transfer clearances to land or property owner. These documents also insure that you are buying a safe property. Getting a lawyer involved in this process would be very helpful. It will also save your time and energy as you don’t have to go through all lengthy piles of papers and forms. The lawyer also plays crucial role in inheriting the property to the nominee. In case the deceased owner was Indian and nominee is an NRI, then one has to apply for the RBI approval to transfer the ownership.
The actual purchase
The process begins with the sale agreement which has be printed on the Rs.50 stamp paper. This agreement consists of all crucial details such as advance payment, final amount and stipulated time frame to pay the money.
The NRI should definitely invest in India due to faster growth rate in the real estate and better returns on investment as compared to other major economies in the world.