Many non-resident Indians (NRIs) want to have a part of India, which is their ancestry. NRIs are drawn to buying property in India for a variety of reasons, including a nostalgic connection to their roots, an investment opportunity, or simply a longing for future safety. However, navigating this process can be challenging, especially when it comes to guaranteeing you have all the documents required for NRI to buy property in India.
This detailed manual simplifies the process by covering all of the documentation that NRIs need for their property purchase in India. We’ll discuss the importance of legal concerns, qualifying criteria, and how much paperwork is required at each stage. By finishing the following list, you can confidently handle the procedure.
Eligibility for NRIs to Buy Property in India
Who qualifies as an NRI?
An NRI is an Indian citizen who spends at least 182 days of every financial year outside of India for employment, business, or education. People of Indian origin (PIOs) and Overseas Citizens of India (OCIs) may also buy property in India under the circumstances.
Restrictions on Property Types NRIs can Purchase
It’s important to note that NRIs cannot purchase agricultural land, plantation properties, or farmhouses in India. However, they can invest in residential apartments, villas, commercial properties, and land for non-agricultural purposes.
This includes industrial land, commercial plots, and land for development projects. Additionally, NRIs can purchase agricultural land if it is converted into non-agricultural use through the appropriate government procedures.
Also Read: Top 10 Mistakes NRIs Should Avoid When Buying Property in India
Key Documents Required for NRI to Buy Property in India
1. Passport:
This is the main document for each NRI transaction. If you have an Indian or a valid foreign passport, ensure it is up to date and has sufficient validity.
2. Overseas Citizens of India (OCI) Card:
If you possess an OCI card, you can use it rather than an Indian passport to purchase property in India.
3. PAN Cards:
The Permanent Account Number (PAN) card is required for NRIs as it reduces taxation and registration procedures linked to property ownership. You can apply for a PAN card online or at one of the designated offices in India.
4. Address Proof
Overseas Address: Utility bills, bank accounts, or residence permits from your current place of residence can be used as proof of your overseas address.
Indian Address: If you own property in India, evidence of ownership can be used as proof of address. Alternatively, use rental agreements or utility bills showing your name.
5. Power of Attorney (POA):
If you are not present in India during the property buying process, a Power of Attorney (POA) is necessary. This document allows a trusted person (family member, lawyer, etc.) to work in your place during discussions, signing agreements, and completing property registration.
How to get the POA notarized and registered:
- You can create a POA document that specifies the powers you are granting to your representative.
- The POA must be notarized by a public notary in your country of residency.
- Once notarized, additional verification may be required from the Indian Embassy or Consulate in your country.
- Finally, the POA must be filed with the relevant authorities in India (typically the Sub-registrar’s office wherever the property is located).
Also Read: Benefits of NRI Investment in Indian Real Estate
Financial Documents
- Income Proof: If you’re applying for a home loan or buying a large property, documents such as salary receipts, job contracts, or company income tax returns might be needed to confirm your ability to pay.
- Bank Accounts (NRO/NRE): NRIs may have two types of bank accounts in India: NRO (Non-Resident Ordinary) and NRE (Non-Resident External). These accounts are frequently utilized to transfer funds for real estate transactions.
- NRO Account: Used for storing money earned in India (e.g., rent).
- NRE Account: Used to hold earnings made outside of India (salary, investments).
- Tax returns: Previous tax returns may be asked for for bigger investments or house loan applications to establish your income and financial stability.
Legal and Compliance Documents
- Sale Deed: The Sale Deed is a legal document that transfers ownership of the property to you. After the transaction is completed, you will receive the selling deed. Ensure that the sale deed accurately reflects the property’s features, sale price, and transaction terms.
- Title Deed: Make sure the property’s Title deed is free and clear of any encumbrances or legal issues. The title deed secures your ownership rights and ought to be reviewed by a legal professional to verify its legality and validity.
- Encumbrance Certificate: Get an encumbrance certificate at your local sub-registrar’s office to show that the property is free of any legal liabilities or debts. This certificate covers the property’s ownership history as well as any encumbrances or penalties that have been registered against it. Before beginning with the purchase, be sure that the property is free of any loans, mortgages, or other encumbrances.
Home Loan Application
If you want to finance your property with a house loan, you’ll need to submit the following documents:
- Bank statements (recent months).
- Salary slips or income tax returns
- The necessary paperwork includes employment proof, loan application form, and credit report.
- Property appraisal report.
Also Read: NRI Home Loans for Property Investment in India
Additional Considerations
Legal Due Diligence: It is a good idea to hire a legal professional to perform a full investigation on the property. This includes examining property paperwork, finding any legal issues, and ensuring a seamless transaction.
RERA Registration: Make sure the property is registered with the Real Estate Regulatory Authority (RERA). RERA protects buyers and encourages transparency in the real estate industry.
Why Prepare the Documents in Advance?
Having all of the necessary documentation ready in advance simplifies the home purchasing process for NRIs. It saves valuable time and prevents any possible delays or problems during the process of buying. Also, full documentation shows your seriousness as an investor and enables better negotiation with sellers or developers.
NRIs are subject to similar property ownership rules as Indian natives, with a few changes. Understanding these legal concerns and maintaining full adherence is important for preventing any legal complications in the future.
Also Read: Understanding the FEMA Rules for NRIs in Real Estate
Conclusion
Having the right documentation is important for a successful NRI property purchase in India. By completing all the required paperwork and being aware of the legal and financial details, you can speed up the process while avoiding potential delays or problems.
For expert advice and support with property investment in India for NRIs, do contact Omaxe. Our team of seasoned professionals can guide you through the technicalities of the Indian real estate market, guaranteeing an effortless and hassle-free transaction.
