NRIs guide to buying property in India

You can buy any residential or commercial property from any part of India as RBI does not impose any restrictions on such transactions.

But NRIs cannot buy any farm land, plantation property or farmhouse in India without the permission from RBI.

Commercial Property for sale

Bank loans for NRIs for buying property in India

You can avail loans from banks and housing finance companies (HFCs) for the purpose of buying residential properties. The rules governing loans being given to resident Indians by banks would also apply to NRIs for buying their residential properties. The criteria for deciding the loan amount eligibility (based on the income), loan tenure and the extent to which lenders can finance purchase of residential house will be same as that for resident Indians.

It is important to note that the sanctioned loan amount would not be credited into bank account of NRI and hence, would be directly paid to the property seller or developer. Also the property loan can’t be availed if the NRI had paid the said amount to the seller.

Repayment of the home loan:  It will be easy for NRIs who had availed home loans to pay EMIs to the bank by way of remittances. Also, he can make use of funds in his banks accounts – NRE, NRO or FCNR deposits.

Moreover, one can make use of rental income out of purchase property to service the EMIs.

Repatriation Of The Sale Proceeds

There are RBI restrictions on repatriation of sale proceeds of property he had bought through home loans. He is allowed to repatriate sale proceeds of only properties which were serviced using foreign currency as per the existing guidelines. This includes the money sent directly from abroad and those from FCNR account or NRE account. In case the funds were used from the NRE account, the amount to be remitted would be restricted to equivalent foreign currency used on the date of payment.

An NRI can sell the property he had bought anytime and there is no lock-in period for selling the same. In addition to the above amount he can remit an amount equal to USD one million every year from your NRO account.

Moreover you are allowed to remit back the money to the extent foreign exchange was used for the purpose of buying of the property and servicing of the loan.