India’s Real Estate is booming day by day, but for the foreign investors, buying property in India could be a hectic task. The laws are numerous and tough for the foreign buyers, so before getting into a discussion about the purchase process in India , one must be really aware of the details about who is eligible to buy property in India and who is not!
A foreign national of Indian origin (NRI) can buy immovable property in India without permission from the Reserve Bank of India (RBI). In the Indian law and NRI is defined as an individual having Indian descent from their parent’s or grandparent’s generation.
A foreign National Residing in India can also buy immovable property in India without acquiring permission from RBI, because Indian laws give full privileges to all residents of the country. However there are exceptions to the residents of Pakistan, Bangladesh, Sri-Lanka, China and some other countries.
Foreign Buyers, who wants to invest in Indian Real Estate for buying Commercial Property for business activities, have the privilege to buy property with great ease.
When it comes to foreign buyers, who are neither NRI’s nor want to invest in Commercial property, Indian laws make it next to impossible for them to buy property in India. It is illegal to buy property on India on a tourist visa. Maximum limit of a tourist visa in India in 180 days that almost equals to 6 months. A foreign buyer who wants to buy property in India, it is made compulsory that he spends 183 days in India in a financial year (a financial year starts from April). After a stay of 183 days in India, the foreign individual is allowed to buy property in India with the permission of Reserve bank of India.
Once the permission has been granted by the RBI, the rest of the purchase process is relatively simple, but it could be a time taking job. It could approximately take 2-3 months.
The first step should be to hire a real estate agent; the agent will be your guide to buying property in India. He will also be able to protect your rights by informing you about the laws.
The second step includes choosing the right property with the help and guidance of your real estate agent.
Once the property has been selected, negotiations are made between the buyer and the seller, you agent/attorney draws up an agreement.
Once an agreement has been made signed between the buyer and the seller, the buyer deposits an amount of 10%-20% of the actual price of the property to be bought.
After your lawyer has carried out all the legal procedures and ensured that the seller is the authentic owner of the property, there are no debts or mortgages to be paid on the property, the lawyer obtains the documents for the property for the buyer.
The documents are taken to the stamp duty office to be stamped before the buyer signs them. After the stamp duty has been paid, the rest of the money for the property is paid and the deed is registered.
Fees and Taxes
Following are the approximate expanses for the purchase process;
