If you are wondering of what use it is to invest in a hot property in Chennai while you live far away from your hometown, then think twice BEFORE you drop the property investment idea.
As an NRI you can rent out your property in Chennai. Not just that you can repatriate the rental income and no prior permission is required. Tax will be deducted at source on rental income, therefore you can choose to repatriate the rental income or use it to pay your home loan fully/partially.
On the one hand you have a property that is fast appreciating in value, and on the other hand you have a monthly source of income by way of rent that can be used for whatever purpose you deem important.
Hire a reputed real estate agent who specializes in local and international properties/ residential developer with allied services, so you don’t have to worry about getting a tenant for your apartment in Chennai. You can always try the tried and tested formula of getting tenants through known sources, however going through an established real estate firm would be advantageous for you.
Normally tenants of big real estate agents are reputed officers from big corporate companies therefore your apartment is in safe hands and your monthly rental income is assured.
Properties on sale in Chennai are galore, choose the right one, and earn returns on investment while you are still working.
If you are buying a property in the outskirts of Chennai then check for the following details with the developer:
Land rights document
Does the land come under city corporation limits?
Does it come under a Taluka area?
Check for non agricultural clearance if it is rural land
Has the developer obtained permission and required clearances from the area development board?
Has the respective government bodies legally approved water and electricity connection?
What are the administrative fees, duties and taxes to be borne by the property buyer?
Clarify the stamp duty, registration fees, documentation fees, electricity and water connection charges, car parking charges and maintenance fee.
Additional important expenses property buyers in Chennai need to be aware of include: Value Added Tax and Service Tax. In some cases, when the project reaches the possession stage property buyers will need to pay VAT and service tax in addition to the other expenses.
Service tax is tax levied on commercial and residential construction. In general the rate of service tax is 4 per cent of the total construction cost. The residential Builder’s agreement with the buyer must reflect this point.
VAT has replaced the earlier sales tax and all builders’ pay VAT. The builder can choose to pay two per cent of the total building cost or calculate it on item basis for materials like sand, cement, bricks, etc.
The service tax and VAT put together would roughly work out to 2% of the price mentioned in the sale agreement in the case of apartment complexes with less than 12 units, and for buildings with more than 12 units it would roughly work out to 6% of the total price.
Sometimes escalating construction costs can impact the amount charged by the builder, howeverreputed residential builders don’t levy any additional charges because of rising construction costs. Also, the rate quoted will include all taxes and that is the final price.
Buying a property can seem overwhelming, however you can simplify the whole process by drawing a checklist of all the formalities involved, documents required, budget and of course the list of government offices you will need to visit. Prepare a comprehensive list of government office addresses with route map, telephone numbers, the names and positions of people at these offices if possible, places where you can buy stamp paper, the commission you may need to pay people in the process.
Once you have agreed on the buying price with the seller check all the original documents from the mother document to the current document. Don’t ever accept a photocopy of the original document. Insist and verify the original document. This will will help you ensure that the seller is indeed the actual owner of the property. Also, verify if there are legal heirs to the owner and if required ask for a no objection certificate from the legal heirs. This is to avoid any kind of possible legal battle over the property in future.
Physically visit the property; contact the area surveyor and measure your land. Cross check the documents in the sub registrar’s office. Thoroughly enquire if the price the seller has quoted is the market value of the property. If possible enquire with neighbours around the property you propose to buy. Ascertain the value of the plot, survey number and patta. Insist on an encumbrance certificate for the last 20 years atleast and also check if the property tax is paid up to date.
Another important point is that the plot must be approved by PANCHAYATS: CMDA / DTCP / MMDA. Clarify which category the property belongs to: RESIDENTIAL, Commercial, Non Residential, Industrial and Special zone.
The property must be free from mortgage. Once you have collected all the information hire a lawyer and get the douments verified thoroughly. Should you want to apply for a bank loan then you definitely need a patta. Banks will never sanction a loan for properties without patta.
Everything you have agreed on should be documented, verbal agreement has no value.
As a Non Resident Indian if you are interested in applying for a housing loan in your home country then there are numerous banks that you can choose from. The eligibility for a Non Resident Indian housing loan is that you must be 21 years of age. Your monthly income must be at least 2000 USD; however this amount varies from bank to bank. Also, every NRI housing loan applicant must have a local co applicant. If the property is being purchased by more than one person then the other applicants also become co applicants and hence should sign all the loan documents.
The minimum loan amount varies between 3,00,000 INR and 5, 00,000 INR and the maximum amount can go upto a crore this also varies depending on the bank and the loan applicant profile. A lot of other factors are taken into consideration while sanctioning an NRI housing loan: income level, age, number of dependants, other assets and liabilities, repayment capacity, and also property cost.
An applicant may be eligible for a maximum of 85% of property cost or construction cost; and 75% of the land cost in case of buying a land; either ways repayment capacity of the borrower is an important determining factor. To obtain a higher loan amount NRI’s can include a co-applicant who can show additional income source.
The equated monthly installments must be remitted through the NRE/NRO account. Payments cannot be made from another account whether it is in India or abroad. The EMI for the loan amount must be disbursed from the NRE/NRO account only.
While housing loans for NRI’s has been made simple it is worthwhile to check and compare interest rates, loan amount, repayment tenure etc between banks and choose a loan that best suits you.
As a Non Resident Indian working abroad there may be several reasons you want to buy a property in your hometown. Are you thinking of buying a safe and secure home for your aged parents or do you want to invest in real estate wherein the returns on investment is enormously higher when compared to other investment options such as gold, and fixed deposits. Perhaps you are thinking of returning to India for good with your entire family. Whatever may be the reason this is a good time to invest in the Chennai real estate market.
Chennai is home to some of the most respected global companies. Whether you are thinking automobile, mobile phone, IT/ITES, banks, insurance, KPO/BPO, so on and so forth many major international giants have a firm presence in Chennai. As an offshoot there are plenty of well paying jobs across different sectors in the job market. This automatically translates to higher standard of living and better quality of life; and also an increasing demand for housing, good social infrastructure, schools, state of the art healthcare centre, recreation and entertainment; all of which is transforming the landscape of the entire city.
There is growth in every sphere you look at in Chennai be it schools, colleges, retail, fashion, hotels, multiplexes, healthcare, elite shopping. With a booming economy and rising demand for living space plenty of residential properties are mushrooming across Chennai. Most of these apartment complexes are a one stop shop that offers you everything under one roof. Several features such as a club house, children’ play area, health club, landscaped gardens have been included to ensure that living is comfortable, stress free and luxurious.
If you are looking at buying a property in Chennai, whether it is a budget flat, luxury apartment, tech smart flats, compact apartments, beautiful villa, MARG Proper Ties offers you a wide range of properties to choose from. The residential projects are all at several strategic locations in and around Chennai.
