If you’re a NRI (non-resident Indian) or PIO (person of Indian origin) considering buying property in India from the USA, this guide is for you.
We’ll cover all you need to know about buying a house in India, including the documents required for an NRI to buy property in India and how to arrange a power of attorney for an NRI to buy property in India without being in the country.
To help you save money when buying properties in India from abroad we’ll also introduce Wise low cost international payments. Get the mid-market rates and low, transparent fees — and save 6x compared to using your regular bank.
|📑 Table of Contents|
As an NRI buying property in India, you're free to purchase most types of real estate. Residential and commercial properties are both approved for NRI and PIO purchases, as long as the process follows FEMA (Foreign Exchange Management Act) rules¹.
The key exception is buying agricultural land, plantations and similar properties. In this case you’d need to seek extra permissions before buying, with approval granted on a case by case basis.
This also means that NRIs and Green Card holders can’t buy agricultural properties, such as the farmhouses attached to agricultural land, without official permission.
If you buy a property in India when you’re a resident there and subsequently leave the country, you’re entitled to hold onto the property — even if it’s agricultural land, and would otherwise not be available to purchase by an NRI.
The steps you’ll take to buy property as an NRI are similar to those followed by residents in India — the main difference will be in the need to acquire power of attorney if you’re not already in the country.
Get good local advice if you’re not in India yourself, to make sure you’re following all legal requirements when buying a property, and to avoid any unnecessary risk.
|🎯 Here are the basic steps you’ll take|
Here’s a rundown of the documents usually required when buying a property in India as an NRI:
If you’re not able to travel to India to complete your property purchase personally, you can still buy property in India as an NRI by giving power of attorney (PoA) to a representative. This entitles your representative to act on your behalf in legal matters such as completing the property purchase.
You can arrange power of attorney via your nearest Indian Embassy or Consulate. The process may vary slightly between locations, but you’ll usually need to have 2 witnesses available to sign your PoA and will need to provide your OCI/PIO card and recent passport sized photos².
As an NRI you may be able to get a home loan in India. However, banks will set their own eligibility rules, so whether or not you’re allowed to take a mortgage may depend on the type, value and location of the property as well as how you intend to use it.
It’s common for NRIs to be asked to provide a higher deposit amount compared to residents. The interest rates offered to NRIs may also be inferior to those given to residents of India.
If you’re entitled to get a home loan in India you’ll need to provide a suite of supporting documents.
Exactly what is required will vary from bank to bank — but you can expect to be asked for:
Whether you’re taking a home loan or buying your property outright, you’ll likely need to make a payment upfront when you close the deal.
Under RBI rules you must pay for your property either through remitting a payment from overseas in INR, or from the balance held in your NRE/NRO or FCNR account.
You can’t pay for a property in India by presenting foreign currency for example.
If you sell your property in India you’ll be able to remit the funds overseas subject to RBI rules.
To repatriate funds you’ll need to demonstrate you acquired the property under FEMA rules, and you’ll have to pay any relevant local taxes.
If you’re selling more than 2 properties you may need to seek RBI approval before remitting funds¹.
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When you buy a property in India you’ll be liable for several local taxes including stamp duty, registration fees and legal costs³. You may also need to pay a realtor’s fees, depending on how you’ve arranged the transaction.
If you buy a property in India but retain your NRI status it’s likely that you’ll only need to pay income tax in India on income accrued in India⁴.
If you change your status to become a tax resident in India your tax obligations will also change. In any case, it’s worth taking professional advice to make sure you’re fulfilling all tax requirements both in India and in your country of residence.
Whether you’re buying a property in India to live in or as an investment, use this guide as a starting point to understand the process involved.
And don’t forget to choose Wise when you send money to complete your property purchase in India to save 6x versus using your normal bank.
|Still not sure about Wise? Check the comparison table below|
- RBI - FAQ
- Indian Embassy USA
- Global Property Guide - India buying guide
- Tax Summaries - Taxes on personal income
Sources checked on 01.26.2022
This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.
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