NRI Guideliness

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NRI Guideliness

The below are the Reserve Bank of India (RBI) Guidelines on NRI Investment in properties in India

PERMISSION FOR PURCHASE OF RESIDENTIAL PROPERTY/COMMERCIAL PROPERTY.

  • NRIs holding Indian passports - No permission required.
  • NRIs holding foreign passports - Intimation to RBI via form IPI - 7 within 90 days of purchase of property or final payment of consideration Funds through NRE / NRO accounts.

SALE OF PROPERTY

  • Property held by NRIs in India can be sold. No permission is required from the Reserve Bank of India

REPATRIATION OF SALE PROCEEDS

  • Repatriation of proceeds from sale of residential property purchased on or after 26th May 1993 is allowed.
  • The RBI will consider repatriation of the consideration amount remitted in foreign exchange for the acquisition of 2 properties. The sale has to have taken place after 3 years from the date of final purchase deed or from the date of final payment.
  • Application of repatriation (IPI - 8) has to be done within 90 days of the sale of the property.

INCOME FROM PROPERTY

  • NRIs can let out immovable property in India. The rental income from the investment has to be credited to the NRO account.
  • Some rules related to this are subject to changes from time to time.

RETURN ON INVESTMENT AND APPRECIATION

  • RENTAL RETURNS - The rental returns on an investment in Residential property in Chennai is 5% - 6% p.a.
  • Conservative estimate of appreciation on an investment in property in Chennai is about 20% p.a. NRIs start to gain by investing in Real Estate when compared to the investments on the NRNR / FCNR deposits.

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