When NRI plan to purchase NRI apartments in India, they are in for a treat. Their investment in the country undoubtedly gives a significant push to the whole realty sector. Despite the fact that these individuals moved abroad decades ago, they still prefer to have a place of their own in India.
Purchasing property here is a popular norm as NRIs want a homely feeling whenever they return to India in order to spend time with their loved ones or for any important work. The most important factor is Indian Rupee's depreciation against the US dollar, so purchasing property in INR is definitely much cheaper and more lucrative.
5 things NRIs should know before investing in Indian Real Estate:
NRIs must ensure they comply with all legal requirements before investing in real estate in India. They must hold an Aadhaar card, PAN card and a bank account in India to use the money to invest from that account. Further, they also need to be aware of the fact that the property they are planning to invest in has all the necessary permits and approvals.
Before finally considering any property to invest in, proper research should be done on the ground. Factors such as location, quality of the construction, potential rental income and the developer's reputation should be considered. Nowadays, as many developers have started with their digital presence, so they have started with an 'NRI Corner' on their websites.
These individuals should be well aware of the tax implications of investing in real estate here. This includes income tax, property tax and capital gains tax. Furthermore, it is essential for them to understand how to minimize their tax liability. For example, they can avail benefits under Section 80C of the Income Tax Act for the principal repayment of a loan.
This is a very underrated yet important feature as it affects the Return On Investment (ROI). Therefore, before purchasing NRI apartments, they need to have a clear understanding of foreign exchange laws and regulations so that they can mitigate the risks associated with currency fluctuations by hedging their investments.
Power of attorney
Power of Attorney (POA) is basically a legal document that gives authority to a person or entity to act on behalf of another person. When it comes to real estate investment, the NRIs can give this POA to a reliable person to complete the legal formalities on their behalf. However, keep in mind that POA is valid for a specified duration only, so the necessary tasks should be completed before it becomes invalid.
Living outside India for any purpose is of immense pleasure, but staying connected with your roots is also essential. Compared to investment instruments such as bank FDs, and the equity market, investment in real estate is quite lucrative. If you are an NRI and planning to invest in real estate in India, it is essential to remember the above mentioned points.