Q1) I am a foreign citizen of Indian origin. Can I acquire commercial property in India ?
A) RBI has granted general permission to acquire properties (Other than agricultural land, farmhouse, plantation) provided the purchase consideration is paid out of inward remittance through banking channels or out of funds from purchaser's NRE/FCNR accounts.
Simultaneously, a declaration in the form of IPI 7 within a period of 90 days from the date of purchase of the property/final payment has to be submitted to RBI, Bombay.
Q2) Can I sell and dispose off such properties ?
A)Repatriation of original investment in respect of properties acquired by foreign citizen of Indian origin on or after May 26, 1993 is allowed provided the property is sold after a period of 3 years from the date of final purchase or from the date of payment of final instalment of the consideration amount whichever is later.
Form IPI 8 has to be lodged with RBI within 90 days of the sale of property.
Q3) Can I rent out my property ?
A) RBI has granted general permission to let immovable property on rent. However, such rental income can be credited to only NRO account.
Q4) Am I eligible for a loan for buying a house/flat for my residential purposes ?
A) Yes. Certain financial institutions (like HDFC Ltd, LIC Housing Finance) have been permitted by the RBI to grant housing loans to NRIs for acquiring house/flats for self-occupation.
The borrower is required to bring at least 25% of the cost through foreign inward remittances or out of his funds held in NRE/FCNR accounts.
Q5) Can Banks grant me a loan for this purpose ?
A)So far, Authorised Dealers were permitted to grant housing loans to NRIs against the security of immovable property proposed to be acquired and the requests for allowing residents as co-obligants/guarantors were considered by the Reserve bank on a case to case basis.
But now, Authorised Dealers can now grant Housing Loans to Non-resident Indians (NRIs), without reference to the Reserve Bank. In such cases, the NRI may be a principal borrower with a resident close relative as a co-obligant/guarantor or the land may be owned jointly by the NRI borrower with the resident close relative. In such cases, the payment of margin money and repayment of the loan instalments should be made by the NRI borrower. There is also scope for Authorised Dealers granting housing loans to residents with an NRI as a co-obligant.
Q6) Do I need to take permissions from Exchange Control Authorities in India for acquiring residential/commercial property in India ?
A) Non Resident Indian citizens do not require RBI permission.
RBI has granted general permission to foreign citizens of Indian origin to purchase immovable property in India for their bonafide residential purpose.
Q7) What is the mode of payment of purchase consideration ?
A) Foreign citizens of Indian origin should remit the purchase consideration out of their NRE/FCNR accounts maintained with Banks in India or through foreign exchange inward remittances.
Q8) I am a foreign citizen of Indian origin. Do I need to inform RBI at the time of purchase of property ?
A) Yes. You need to file a declaration in form IPI 7 with the Central office of RBI at Bombay within a period of 90 days from the date of purchase of immovable property, alongwith the certified copy of the document evidencing the purchase transaction and the bank's certificate regarding the origin of funds for payment of consideration.
Q9) I want to sell my property, does that need separate permission from RBI ?
A) RBI has granted general permission to sell such properties. However, if the new buyer is another foreign citizen of Indian origin, the purchase consideration should be paid out of NRE/FCNR accounts or through inward remittances.
Q10) Can I remit sale proceeds of such property out of India ? What is the procedure for repatriation of money ?
A) In case of sale of residential properties purchased on or after May 26 1993, repatriation is allowed only to the extent of original consideration paid out of foreign exchange source for two of such properties. The balance amount of the sale proceeds will have to be credited to Non-Resident Ordinary Rupee account of the owner.
In case of properties purchased prior to May 26, 1993, the sale proceeds cannot be remitted outside India and these proceeds have to be credited to NRO accounts of the owner.
Form IPI 8 has to be submitted to RBI at Bombay within 90 days of the sale of property to seek repatriation of sale proceeds.
Application for the same is considered provided the sale takes place after 3 years from the date of final purchase deal or from the date of payment of final instalment whichever is later.
