Are NRIs allowed to buy property in India?
How can an NRI purchase property in India and are there specific rules for them when it comes to buying property here?
An NRI can appoint a representative in India and grant them Power of Attorney to search for a property on their behalf.
By Pradeep Mishra
In my previous articles, I’ve explained that not just individuals but also institutions or groups can purchase residential or commercial properties. Similarly, Non-Resident Indians (NRIs) of Indian origin are also allowed to buy property in India. Over the past few years, I’ve observed that NRIs living in Canada often prefer to invest in cities like Chandigarh and Mohali, while those settled in Europe are more inclined towards Bengaluru and Pune. Meanwhile, NRIs in the Gulf countries tend to prioritize Delhi-NCR and tier-two and tier-three cities for their investments.
A valid question that arises here is whether there are specific rules for NRIs when it comes to buying property in India. Also, do they need to visit the country to purchase a property, and are there any special certificates they need to provide? Let’s explore the answers to these questions:
Investment in These Properties is Possible
According to government regulations, NRIs are allowed to invest in residential and commercial properties in India. Residential properties could be in the form of plots, apartments, villas, floors, condominiums, penthouses, or flats. Similarly, for commercial purposes, they are allowed to purchase properties used for retail purposes, IT, ITES, or offices. However, NRIs are not permitted to invest in agricultural land, forest land, plantations, or any land proposed for afforestation.
If an NRI is interested in investing in such a property, they must first obtain approval from the Reserve Bank of India (RBI). However, if the NRI has relatives in India and inherits such a property, there are no restrictions. Additionally, an NRI is allowed to invest in more than one property in India.
Required Documents
For any major financial transaction in India, a PAN (Permanent Account Number) card issued by the Income Tax Department is necessary. Therefore, any NRI interested in purchasing property in India must present a PAN card along with their personal identification. Since the NRI resides abroad, a passport will be acceptable as a personal identification document. In addition, they must present documents proving their NRI status, which can be established by providing a visa from the country where they reside. If the NRI possesses documents like an Aadhaar card or Voter ID card, it will help in easily verifying their permanent address.
How Can an NRI Purchase Property?
I often emphasize the importance of thoroughly evaluating the area where you intend to buy property, considering factors like amenities, accessibility, crime rate, and future prospects. This advice is easily applicable to someone living in the country or state where they plan to invest, but it might not be as simple for an NRI.
Therefore, an NRI can appoint a representative in India and grant them Power of Attorney to search for a property on their behalf. Once a property is selected, the representative can make the token payment and finalize the remaining purchase terms. After everything is settled, the NRI can come to India to register the property in their name, obtaining absolute ownership of the investment.
(The author is CMD, ORAM Developments)
