Guide to foreigners/ NRI/ PIO/ OCI buying property in India

Interested in buying property in India, but not an Indian resident? Read on to learn when foreigners, NRIs, PIOs, and OCIs can and can not buy property in India- and what types of property are allowed.

While this article provides an overview of property buying in India, it is not meant to be taken as professional financial or immigration advice. Seek out a professional and understand your current situation before taking the leap into property purchases.

Can a foreigner buy property in India?

No, the Indian Ministry of External Affairs does not allow citizens of another country residing outside of India or who are not of Indian origin to purchase property in India.

There are only two caveats, the first being if you are a diplomat and the second being if you are a foreign national residing in India or the property has been inherited from a resident Indian.

Individuals associated with a foreign embassy or consulate in India are allowed to buy and sell property in the country. However, agricultural land, plantation property, or a farmhouse are prohibited from purchase. Diplomatic personnel will require approval from the Government of India and the Ministry of External Affairs for any purchase or sale.

If you are a foreign national residing in India, you can purchase a property on a case-by-case basis. But if you are a non-resident and non-citizen and have inherited property from a resident Indian citizen, you will need to get approval from the Reserve Bank of India (RBI) for transfers or sales.

Can a Non-Resident Indian (NRI) buy property in India?

Yes, a Non-Resident Indian can buy property in India. This can be residential land, homes, or flats in India, but not agricultural land, plantation, or farmhouse properties. An NRI is defined as an Indian citizen residing outside the country for more than 182 days a year.

An NRI is also allowed to transfer the property to any of the following:

• Another NRI
• A person of Indian origin residing outside of India
• An Indian citizen residing in India

Only Indian citizens who are permanent residents in India are allowed to purchase agricultural land, plantation property or farmhouses. NRIs who inherit any of these types of properties will have to transfer it to a permanent resident Indian citizen.

Here is a quick table to look at the differences when buying non-agricultural/plantation/farmhouse property in India as an NRI, Resident, or OCI:

Process for buying property in India as an NRI

Once a property has been identified, an NRI can gather the required paperwork and identify whether a home loan is required or not.

Many popular Indian banks provide home loans specifically for NRIs for purchases in India. Here is a quick list of banks that provide home loans for NRIs:

• State Bank of India
• ICICI
• Axis Bank
• HDFC
• DBS
• Federal Bank

An NRI can purchase the property by way of either of these payments methods:

• A direct payment to an Indian bank account through normal banking channels
• Proceeds held in an NRI account that complies with the RBI and the Foreign Exchange Management Act

Property can not be purchased with foreign currency notes or traveler cheques.¹

Documents required for NRIs to buy property in India

The documents required by sellers will differ in each situation, but if you are an NRI getting a home loan here are the documents banks may require:

1. PAN Card
2. Passport for signature, and ID proof
3. Aadhaar card or utility bills for address proof
4. Salary statements or Income Tax returns for proof of income
5. Application for home loan

Be sure to read the details for NRI home loans as certain banks will have income and age requirements.²

Save money when buying property in India with Wise

If you are looking to send a deposit or purchase a piece of property in India, let Wise make the payment easy for you. Wise helps you send money directly to local bank accounts in India at the real exchange rate and with just one low transfer fee. And the best part is that your transfer can arrive in India in under one minute on popular routes. So you can secure the property you want fast and easily.

And if you are sending large amounts to India, Wise can be the cheaper alternative to banks or money transfer services. You save money on the transfer with Wise’s real exchange rate, versus other banks that may not charge a transfer fee but markup the exchange rate.

Here is a quick table looking at how much you can save when you use Wise when sending $10,000 USD to India for a property purchase:

And if you an NRI living in one of the currently supported countries like US, UK, or Australia, check out the Wise Multi-Currency Account. It is a single account where you can hold 50 different currencies, including Indian rupees. The account comes with a linked debit card so you can hold, receive, send and swipe like a local wherever you are in the world.

Can an Overseas Citizen of India (OCI) buy property in India?

Yes, an OCI cardholder can buy property in India as long as it is not agricultural land, a plantation property, or a farmhouse. An OCI can also receive a property as a gift, as long as it is from an Indian resident relative. An OCI and an NRI are treated similarly when it comes to purchasing a property in India.

The Foreign Exchange Management Act allows for an OCI or person residing outside of India to hold, own, or transfer any property they owned while a resident or inherited from a Resident Indian.

Process for buying property in India as an OCI

An OCI can purchase or be gifted a property in India. Payment for purchases must be made within India through normal banking channels and are subject to taxes, duties, and levies as applicable.

The funds can come through a bank transfer, or by funds held in an NRI account by the OCI. Traveler's cheques or foreign currency purchases are not allowed.

OCIs can also look into getting home loans with Indian banks within NRI services that are provided. While OCIs are not NRIs, OCI cardholders are provided the same benefits as NRIs at banks.

Documents required for OCIs to buy property in India

OCIs will likely need to provide the following documents to purchase a property in India:⁴1. OCI card
2. PAN card
3. Passport
4. Address verification like utility bills
5. Work permit or employment contract
6. Recent income tax forms
7. Recent salary slips
8. Passport-sized photos
9. Bank statement for qualifying NRI accounts

If you are not in India when the purchase is made, a power of attorney may be required. Check with your bank, broker, or seller for any additional documents you may need.

Can a Person of Indian Origin (PIO) buy property in India?

The Person of Indian Origin (PIO) card is currently being converted to an Overseas Citizen of India card. The purchase of property would be the same as for the OCI cardholders in the next section.

Holders of a PIO card should convert their card to an OCI, as they can only travel on their PIO card until December 31, 2022. Going forward, the OCI card will be the only method for those of Indian origin.³

Frequently asked questions when buying property in India

Do I need to be in India to purchase a property in the country?

In most cases, you may not be needed to be in India to purchase or inherit property if there is a power of attorney in place.

Are NRI and OCI the same thing?

While an OCI and NRI are often treated similarly in India, they are not the same. An OCI is an individual who holds citizenship in another country but has been granted a lifetime visa to India, while an NRI is an Indian citizen who is primarily residing outside of India.

Can non-resident foreign national spouses of an NRI or OCI purchase property in India?

Spouses of an NRI or OCI, who are not an NRI or OCI themselves, can purchase one qualifying property jointly with their NRI/OCI spouse. The transaction would need to comply with regulation 6 of FEMA 21(R).

Can a Non-Resident Indian repatriate proceeds from a property sale?

A Non-Resident can repatriate the proceeds from a property sale with RBI approval. An NRI, OCI, or foreign citizen who has inherited a property, is a widower of a deceased Indian national resident, or retired from employment in India can repatriate up to $1 million USD per financial year as long as you comply with FEMA. Qualifying NRIs and OCIs will only be allowed to repatriate sale proceeds from a maximum of 2 properties.

Can Indian residents purchase property outside India?

Yes, as long as the resident complies with the Liberalized Remittance Scheme with the RBI which limits outwards remittances from India to $250,000 USD a year or the property is a gift.⁵