The Real estate segment is full of NRIs who want to buy their dream home back here in India and invest in our country, to have a secure life when they return. This is also one of the biggest reasons for the real estate boom in Chennai.
If you are a Non-Resident Indian (NRI) and want to buy property in Chennai, here are some legal questions that will be on top of your mind. Well, we are here to answer.
Do I need any special permission to purchase property in Chennai as an NRI?
With the exception of agricultural land, plantations and farmhouses, Non Resident Indians are eligible to purchase residential or commercial property in India, without any permission from the RBI. However, if you are person of Indian origin and do not hold an Indian passport, you do need an RBI sanction for acquiring any kind of immovable property in the country.
How can I make the payment?
Payment towards purchase of the property can be made out of inward remittances in foreign exchange through banks, or from the individual’s NRE/ FCNR (B)/ NRO accounts maintained in India.
Can the properties (residential/commercial) be given on rent if not required for immediate use?
Yes. Reserve Bank has granted general permission for letting out any immovable property in India. The rental income or proceeds of any investment of such income are eligible for repatriation
Can NRIs obtain loans for acquisition of house/flat for residential purpose from authorized dealers/financial institutions providing housing finance?
Reserve Bank has granted general permission to certain financial institutions providing housing finance and authorized dealers to grant housing loans to non-resident Indian nationals for acquisition of a house/flat for self-occupation subject to certain conditions. The purpose of the loan, margin money and the quantum of loan will be at par with those applicable to housing loans to residents. Repayment of loan should be made within a period not exceeding 15 years out of inward remittance or out of funds held in the investor’s NRE/FCNR/NRO accounts.
What are the criteria regarding avail of home loans for NRIs in Chennai?
According to Reserve Bank guidelines for NRIs:
The loan amount shall not exceed 85% of the cost of the dwelling unit.
Own contribution, which is the cost of dwelling unit financed less the loan amount, can be met from direct remittances from abroad only through normal banking channels, your Non-Resident (External) [NR (E)] Account and /or Non-Resident (Ordinary) [NR (O)] account and /or Non-Resident Special Rupee account [NRSR] in India.
Repayment of the loan, comprising of the principal and interest including all the charges are to be remitted from abroad only through normal banking channels, your Non-Resident (External) [NR (E)] Account and /or Non-Resident (Ordinary) [NR (O)] account and /or Non-Resident Special Rupee account [NRSR] in India.
Can Indian companies grant loans to their NRI staff?
Reserve Bank permits Indian Firms/Companies to grant housing loans to their employees deputed abroad and holding Indian passports subject to certain conditions.
While purchasing real estate most developers demand a Power of Attorney in their favor, is there a way to avoid it?
One can choose not to grant the Power of Attorney (POA) to the developers. However this will mandate the mailing of all documents to your foreign residence and associated time delays. A good compromise is to grant the POA to the builder only for specific necessary items.
Can an NRI give a Power of Attorney to a person in India for completion of loan formalities on their behalf?
Yes.
