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NRI
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‘Home is where the Heart is’ goes well with the millions
of NRIs spread on every corner of the world; whose heart still beats for India in
spite of residing miles away from their motherland. And with Indian economy and
real estate poised at a favorable state, many are contemplating their return to
India, to get the best out of the investment opportunity.
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Returns from real estate investments in India have systematically performed well
and even out performed the other investment options. However, easy home loan availability
by financial institutions in India, NRI remittances and repatriation procedures
has emerged as the best of all the available prospects for the NRIs looking forward
to return to India.
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 Property investment
doors open for NRIs
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The policies set out by the government regarding property investment and repatriation,
has made opportunities of investments in India even more prosperous. Under the present
relaxed conditions, Non-resident Indians (NRI) and persons of Indian origin (PIO)
can invest in properties in India.
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NRIs can acquire residential/ immovable property in India, rent it out, transfer
or sell it, if required. However, the regulations do not permit the NRIs and PIOs
to acquire property like agricultural land, grove and farm house. With the government
allowing 100 percent repatriation, they can also take the rental income and capital
investment in the property outside India, subject to the foreign exchange regulations.
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The NRI/PIO may use his own funds to get immovable property; other than the option
of helping home loan from bank for this purpose. The NRI's ‘own funds’ refer to
the money received in India by way of inbound remittance from overseas out of income
earned overseas, personal savings outside India. These funds can be remitted through
Non-Resident External (NRE) or Non-Resident Ordinary (NRO) or Foreign Currency (non-resident)
(FCNR) bank accounts.
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Furthermore, they can remit sale proceeds outside India for up to two such properties
without any RBI approval. Remittance for subsequent properties requires RBI's approval.
In case the property is acquired from rupee funds held in India, the remittance
depends on the holding period of the property.
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The real estate sector in India is undergoing a self-organization from being a highly
unorganized sector. This has been one of the most crucial factors for India gaining
its status as a highly favored investment destination through FDI and funds.
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India has a huge
market potential. **
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- It’s fifth largest economy in the world (ranking above France,
Italy, the United Kingdom, and Russia)
- It has the third largest GDP in the entire continent of Asia.
- It is also the second largest among emerging nations.
** indicators are based on purchasing power parity.
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Indian Real Estate
sector: Facts and Figures
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- Estimated size of organized Indian real estate sector accounts
for USD 12 billion of India's USD 600 billion economy; just 2% way less when compared
to mature economies.
- Relaxation of FDI rules has brought about capital gains in every
sector of Indian economy. The government is making efforts in liberalizing the guidelines
and norms for investment through FDI, making them more NRI friendly.
- Growth in the Indian real estate sector - an estimated 30% last
year, owing to FDI norms and related growth drivers, By 2010, real estate sector
estimated to be between USD 45-50 billion (Source: DSP Merrill Lynch)
- Real estate sector has the potential to touch USD 90 billion
in 10 years.
- The real estate prices in general are on the upswing in all
markets across sectors since last two years
- An estimated 5 million homes were sold in 2005-2006.
- In the next five years, the sales is expected to cross the 30
million homes mark.
- Second homes: The trend of owning exclusive properties like
beach houses, homes in the hills, near religious centers etc is growing fast.
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Facilities to
returning NRIs/PIO
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Under RBI guidelines, facilities available to returning NRIs/ PIO is that,
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- They may continue to hold, own, transfer or invest in foreign
currency, foreign security or any immovable property situated outside India, if
such currency, security or property was acquired, held or owned when resident outside
India.
- They may open, hold and maintain with an authorized dealer in
India a Resident Foreign Currency (RFC) Account to transfer balances held in NRE/FCNR
(B) accounts. Proceeds of assets held outside India at the time of return, can be
credited to RFC account. The funds in RFC accounts are free from all restrictions
regarding utilization of foreign currency balances including any restriction on
investment in any form outside India.
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Exemption for
NRIs returning to India
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When an NRI/PIO returns to India for permanent residence, he enjoys the following
exemption from wealth tax for seven years after return to India the money and the
value of assets brought by him.
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Value of the assets acquired by him out of such money within one year immediately
preceding the date of his return.
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Basic exemption of Rs. 15 lakhs is also applicable.
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If you are buying or renting abroad we offer help, advice and information to plan
and arrange your mortgage and personal finances to ensure you take the right steps
with confidence.
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REALITY DREAMS CONSULTANCY PVT.LTD offer a personalized house finding service, helping
you find the perfect new home in any country in the world. Other useful services
include property price negotiation, convincing and moving services.
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