More and more NRIs want to buy property in this country as RBI has simplified the rules relating to their purchase. The Foreign Exchange Management Act (FEMA) defines an NRI as someone who stays outside India for ‘employment, carrying on business or vocation in circumstances as would indicate an intention to stay outside India for an indefinite period’. Real estate transactions and, by extension, NRI home loans are governed by the rules under FEMA. India’s economy has strengthened over the last decade or so and this has provided a favourable environment for NRIs to invest in real estate here. But there are certain rules and regulations that govern the entire process of NRIs buying property with home loans in India.
The rules for NRIs investing in home loans are:
• An NRI cannot purchase more than two residential properties in India. This is irrespective of the fact whether he or she has a property in the country of his or her residence. Most importantly, NRIs are not allowed to buy agricultural properties in this country. There are no such restrictions on commercial property though. NRI home loans can also be availed to purchase, renovate or construct a new or existing house.
• How much home loan you an NRI get from a bank depends on his income an educational qualification. Banks generally expect the borrower to have a graduate degree.
• Various documents like passport, visa, work permits, salary proof and statement of non-resident external (NRE) or non-resident ordinary (NRO) accounts are required. You can even submit these documents online instead of coming all the way back to India.
• Different banks provide different amounts of loan. However, the tenor for NRI home loans is generally lesser when compared to normal home loans. This is because repayment capacity of NRIs is considered to be better than resident Indians.
• NRIs have the option of paying back the home loans through EMIs. However the repayment can be done only through NRE and NRO accounts with remittance from abroad. The down payment should be done though normal banking channels or NRE or NRO account in India.
Other rules include that if an NRI is buying an under-construction property, he or she has to give the power of attorney to your builder or trusted associate. The guidelines issued by RBI indicate that nri home loans shall be given based on the same criteria as those applicable in case of residential Indians. NRI home loans are secured by equitable mortgage of the property that the NRI wishes to purchase. It is, however, to be kept in mind that there are no limits or restrictions on the number of properties an NRI can purchase or retain in India. But he is allowed to remit sale proceeds of only two properties out of India as per existing guidelines. The only portion of sales proceeds that which was paid using the foreign currency can only be repatriated.
The rules for NRIs investing in home loans are:
• An NRI cannot purchase more than two residential properties in India. This is irrespective of the fact whether he or she has a property in the country of his or her residence. Most importantly, NRIs are not allowed to buy agricultural properties in this country. There are no such restrictions on commercial property though. NRI home loans can also be availed to purchase, renovate or construct a new or existing house.
• How much home loan you an NRI get from a bank depends on his income an educational qualification. Banks generally expect the borrower to have a graduate degree.
• Various documents like passport, visa, work permits, salary proof and statement of non-resident external (NRE) or non-resident ordinary (NRO) accounts are required. You can even submit these documents online instead of coming all the way back to India.
• Different banks provide different amounts of loan. However, the tenor for NRI home loans is generally lesser when compared to normal home loans. This is because repayment capacity of NRIs is considered to be better than resident Indians.
• NRIs have the option of paying back the home loans through EMIs. However the repayment can be done only through NRE and NRO accounts with remittance from abroad. The down payment should be done though normal banking channels or NRE or NRO account in India.
Other rules include that if an NRI is buying an under-construction property, he or she has to give the power of attorney to your builder or trusted associate. The guidelines issued by RBI indicate that nri home loans shall be given based on the same criteria as those applicable in case of residential Indians. NRI home loans are secured by equitable mortgage of the property that the NRI wishes to purchase. It is, however, to be kept in mind that there are no limits or restrictions on the number of properties an NRI can purchase or retain in India. But he is allowed to remit sale proceeds of only two properties out of India as per existing guidelines. The only portion of sales proceeds that which was paid using the foreign currency can only be repatriated.
No comments:
Post a Comment