NRI Corner

NRI Corner

Vasudhaiva Kutumbakam

The Indian Real Estate sector has been a hot favourite pocket for NRI investors. This is proven by the fact that India saw $13.1 billion investment from NRIs in the year 2023 even after pandemic hit and is destined now to grow by an average of 5% year by year. This growth can be attributed to the escalating demands for residential properties due to rapid urbanization and inflating disposable incomes of individuals.

FDI policy of India permits FDI up to 100% from a foreign/ NRI investor under the automatic route which has boosted NRI confidence and a surge has been seen in real estate investment market in recent years.

The Non-Resident Indians (NRIs) are recognized under the Foreign Exchange Regulation Act, 1973. Every bank and housing finance company follows the RBI guidelines to define an NRI as - "An Indian citizen who holds a valid document like an Indian passport and who stays abroad for employment or for carrying on business or vocation outside India or stays abroad under circumstances indicating an intention for an uncertain duration of stay abroad is an NRI."

For NRIs wanting to invest in real estate in India, the process is not as tedious as before. Apart from Person of Indian Origin (PIO), even those holding Overseas Citizenship of India (OCI) can buy a residential or commercial property in India. The leading financial institutions in the country provide home loan facility to the NRIs to fund their real estate purchase. The documents required for home loan include age proof, residence proof, educational qualification, income proof, employment proof, passport/OCI, bank statements, among other things. A NRI also needs to have a Power of Attorney (POA) determined, essentially authorise a representative in lieu of the NRI for the home loan processing.

Banks have attractive NRI housing schemes to accommodate the housing needs of NRIs. From the stables of HFCs, NRI housing finance plans with suitable repayment options are available. NRIs should take due care while selecting their home loan provider companies or HFCs.

Documents required for Resident Indians and NRIs for getting home loans are different in some respects. Home loans for NRIs are available for construction of new houses/ flats, purchase of old house/ flat addition/ alteration to an existing house and repairs/ renovation etc. NRIs can avail of loans by mortgaging an existing residential property. However, for availing home loans, NRIs have to fulfil certain conditions, according to the provisions of the Income Tax Act. They should have stayed in India for a period of 182 days or more within an assessment year or they should have stayed in India for at least a total of one year or more.

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