NRI Guide to Buying Property in India

What you can and cannot buy

NRIs and OCI cardholders may purchase residential and commercial property in India. Agricultural land, plantation property and farmhouses cannot be purchased, though they can be inherited. Verify your specific position with an advisor, as rules are interpreted case by case.

Funding the purchase

Use NRE, NRO or FCNR account funds, or normal banking channels. Home loans from Indian lenders are available with income documents, a passport and visa copies, and often a local co-applicant. Loan servicing should come from NRE/NRO accounts to keep the repatriation trail clean.

Power of attorney

If you cannot attend registration, execute a specific power of attorney, notarised and apostilled or attested at the Indian consulate, then adjudicated in India. Keep it specific — a general POA is a risk.

Tax to plan for

• Rental income is taxable in India; TDS applies to the tenant's payment in many cases.
• On sale, capital gains apply with a higher TDS rate for non-residents; you can apply for a lower-deduction certificate.
• Check double-taxation relief in your country of residence.

Repatriation

Sale proceeds of up to two residential properties can generally be repatriated subject to conditions and documentation — retain the purchase funding trail, the deed and a chartered accountant's certificate.

Practical advice

Appoint a local property manager, insist on digital documentation, and register the property in your own name rather than a relative's. UrbanEarth's desk handles NRI transactions with scanned document sets and video site walkthroughs.