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Propshell

NRI Real Estate and Property Management Services in Chennai

A significant chunk of the real estate investors in India are NRIs. Let us evaluate the financial implications as well as the rules and regulations to determine whether NRI Real Estate Investment in India is profitable.

We are SMEs guiding NRIs for Real Estate Investment in India, more than 50% of our customers are NRI’s who have invested in our projects and seen good profitability on their investments. We participate in International real estate exhibitions in UAE & Singapore and we have regular investors from these countries.

What types of properties can NRIs buy?

NRIs can invest in both residential and commercial properties anywhere in India, but they are restricted from buying agricultural land, plantation, or farmland. However, if they receive such properties through inheritance or as a gift, they can own them. If you, had purchased such properties before you became an NRI, your ownership remains valid.

Should NRIs invest in Indian Real Estate?

Holding a tangible asset in India, no doubt gives an emotional connection to NRIs. Also, like most people in India, NRIs are oriented toward physical assets such as gold and real estate.

The Indian real estate market is largely unregulated, and the sector has been affected by large-scale frauds, litigations, defaults by builders, and ownership disputes, leaving even the resident investors in the lurch. The growth of the real estate sector has mostly been stagnant over the last couple of years, and the rentals have fallen in most Tier-1 cities.

There are plenty of upcoming real estate projects which target NRIs and promise a high return on investment. Many NRIs fall prey to such properties and end up buying multiple properties in India.

Though the entire process of buying and selling is rather smooth these days, you might not be easily able to repatriate the gains to your country of residence and enjoy the fruits of your investment because:

  1. Investments in multiple properties are allowed, but repatriation of sale proceeds can be done only for two properties.
  2. Amount of repatriation allowed is equal to the amount that is remitted from abroad for house purchase. This means that if you have bought a property in India from earnings abroad, on selling the same you can only repatriate the capital you invested and not the gains.
  3. Even if the property was bought with income arising in India, the repatriation is restricted to USD 1 million per financial year and you have to clear a lot of legal hurdles before you can enjoy the profit you made.

Also, unless there is a DTAA agreement between India and the country of your residence, you have to pay tax on the gains you have made or on the rental income, you have earned, in India as well as in the country of your residence. Many people choose to hire property managers who manage all their properties in India for a fee. However, the fees paid cannot be deducted to reduce the tax outgo.

Sale of Property by NRIs

NRIs can sell their properties to either Residents or NRIs. Capital gains tax applies to the gains made from the sale. If the property is held for more than two years, it is treated as long-term capital gains and taxed at 20% of the profits. If the property is sold within 24 months of purchase, it is treated as short-term capital gains and taxed at the income tax slab rate.

All said and done, you have to find a buyer to sell your property or a tenant to rent out your property. With tighter norms introduced by the government to check tax evasion, most Indian residents hesitate to buy NRI-owned properties as it results in additional legal procedures and costs. Even finding tenants for NRI-owned properties is difficult due to the legal compliances required. With real estate being one of the highly illiquid asset classes, the added legal compliance procedures make it more difficult to find suitable buyers or even tenants.

Here WE come preciously to solve your real estate problems:

  • Marketing your property appropriately
  • Identify the right buyers for your property
  • Negotiate the best price for the property
  • Support to solve above discussed problems
To Manage your property in Chennai
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Tax implications for selling a property:

The tax liabilities for NRI selling property in India are as per the Foreign Exchange Management Act of India. According to this act, the main factors that contribute to the amount payable as tax are:

  • The capital gains are determined by the date of sale of the property
  • The value of the agreement is based on the profit gained
  • Charges liable to the society
  • Other pending loans

Repatriation of Indian property

NRI selling property in India is subjected to a list of generic terms and conditions while repatriating a property inherited from an Indian resident. Once these conditions are met, NRIs can go ahead with the process of repatriating the sale proceeds without the permission of the Reserve Bank of India. On the other hand, if the NRI has inherited the property from someone who is not of Indian origin, they will need to seek permission from the Central Bank.

Conclusion:

If you plan to return to India sometime shortly, it makes sense to buy a property for you to reside in. If you want to settle down abroad and have no intention of returning, investing in multiple properties in India makes no sense as you cannot enjoy the profits you make in the country of your residence. It makes sense to invest in other investments like mutual funds, direct equities, etc., where the liquidity is higher, the returns are better and the repatriation restrictions are less.

How we assist with NRI real estate investment?

Let Propshell assist in maximizing your property investment returns while minimizing any concerns you may have. Here is our approach.

Listen

We listen and understand to your property investment objectives and preferences.

Shortlist

Based on your property preferences, we scan lucrative property deals for your review.

Evaluate

Due-diligence begins for your shortlisted properties in Indian context to gain 100% confidence.

Negotiate

Propshell can value add by striking excellent price deals by negotiating on your behalf.

Transact

Once it is clear that the property is free of any litigation, Propshell can represent you & transact.

Monitor

Once you buy, we protect your properties with plot monitoring and property monitoring services.

Manage

Buying is easy, but maintaining is not. We assist in managing, maintaining properties & collect rent.

Handover

Propshell works with legal contracts throughout the engagement so that you are handed over when needed.

Properties We Can assist NRIs to Invest

Propshell is specialised and experienced in assisting NRIs to invest in both residential and commercial properties in India. We understand the legalities involved and can offer seamless property buying, selling and property management assistance.

Commercial Property

Residential Property

Appreciating Plots

Agricultural Land

Hill Station Property

Warehouse Property

Industrial Property

Farmhouses

Have Questions?

Refer to our FAQs

Better returns of your property investments, Lower cost of homes, the rate of appreciation of real estate, the fall in Rupee value against respective currencies, the facility of reverse mortgage, consumer protection with RERA guidelines are some of compelling reasons why NRIs and PIOs invest in India.

The Indian property market is very lucrative as of now. Unlike the stock market, it is not volatile and while sales plummeted due to the Coronavirus pandemic in 2020, demand for ready-to-move-in properties has led to a visible boost in the market. However, it will definitely need some more time to revive to a greater extent. At the same time, many NRIs are considering property purchase.

You would need many documents. However, the important documents are Indian Passport Of Person Of India Origin (PIO) Card Or Overseas Citizen Of India (OCI) Card. PAN Card, Power of Attorney, photographs and an address proof of the applicant and co-applicant.

Utility bills or driving licence would count as address proof. You need to submit the bank statements of the past six months of your Non-Resident External (NRE) Account and NRO (Non-Resident Ordinary) account in India.

You also need to submit the bank statements of the past six months of your account held in the country in which you work. This should be the account in which your salary is credited. You would also need copies of the salary statements of your employer and copies of sanction letters of loans obtained in India and abroad, and self-declaration of residential status. The Indian embassy in your country of residence must certify all these documents.

Indian banks and other NBFCs are open to lending to their NRI customers but the tenure and repayment rates may be slightly higher.

Under the Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2018, NRIs are not permitted to purchase agricultural land or plantation property or farmhouse in India. However, under exceptional circumstances, the RBI may permit an NRI to invest in agricultural property, after reviewing their case.
Propshell is a 15+ years experienced real-estate and property management company. Once we listen to your goals behind property investment, we can very well assist you in any strategic locations of India. Contact us now and have a free consultation.

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