Can a foreign national of non-Indian origin and resident outside India purchase immovable property in India?
No. A foreign national of non-Indian origin, resident outside India cannot purchase any immovable property in India. But, he may take immovable property on lease provided the period of lease does not exceed 5 years. In such cases, there is no requirement of taking any permission of or reporting to RBI. However, he is permitted to acquire one immovable property (other than agricultural land / plantation property / farmhouse) jointly with his spouse, provided the spouse is NRI or OCI and otherwise not prohibited from such acquisition and their marriage should have been registered and subsisted for a continuous period of not less than two years immediately preceding the acquisition of such property.
Whether a non-resident can inherit immovable property in India?
Yes, a person resident outside India i.e.
- an NRI
- a PIO and
- a foreign national of l1on-lndian origin can inherit and hold immovable property in India from a person who was resident in India. However, a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan should seek specific approval of Reserve Bank.
From whom can the non-resident inherit immovable property?
A person resident outside India (i.e. NRI or PIO or foreign national of non-Indian origin) can inherit immovable property from
- a person resident in India.
- a person resident outside India.
However, the person from whom the property is inherited should have acquired the same in accordance with the foreign exchange regulations applicable at that point of time.
Can an office of a foreign company purchase immovable property in India?
A foreign company which has established a Branch Office or other place of business in India, in accordance with FERA / FEMA regulations, can acquire any immovable property in India, which is necessary for or incidental to carrying on such activity. The payment for acquiring such a property should be made by way of foreign inward remittance through proper banking channel. A declaration in form IPI should be filed with Reserve Bank within ninety days from the date of acquiring the property. Such a property can also be mortgaged with an Authorised Dealer as a security for other borrowings. On winding up of the business, the sale proceeds of such property can be repatriated only with the prior approval of Reserve Bank. Further, acquisition of immovable property by entities who had set up Branch Offices in India and incorporated in Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan would require prior approval of Reserve Bank to acquire such immovable property. However, if the foreign company has established a Liaison Office, it can not acquire immovable property. In such cases, Liaison Offices can take property by way of lease not exceeding 5 years.
Whether NRI / PIO can acquire agricultural land / plantation property / farmhouse in India?
No. Since general permission is not available to NRI/PIO to acquire agricultural land/ plantation property / farmhouse in India, such proposals will require specific approval of Reserve Bank and the proposals are considered in consultation with the Government of India.
Can a foreign national being employed in India, and thus being a person resident in India as per FEMA acquire an immovable property in India?
Yes, a foreign national who is a ‘person resident in India’ as per FEMA can acquire immovable property in India with specific approval and fulfil requirements if any prescribed by other authorities such as the concerned state government. However, Citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, Bhutan, Macau, Hong Kong or Democratic People’s Republic of Korea (DPRK) would require prior approval of RBI.
Can a foreign citizen gift immovable properties?
Yes. Foreign national of non-Indian origin requires prior approval of RBI for gifting the residential / commercial property / Agricultural land / a plantation property / a farm house.
How can an NRI / PIO make payment for purchase of residential / commercial property in India?
Payment can be made by NRI / PIO out of:
- funds remitted to India through normal banking channels or
- funds held in NRE / FCNR (B) / NRO account maintained in India
- No payment can be made either by traveller’s cheque or by foreign currency notes or by other mode except those specifically mentioned above.
- Payments can not be made outside India.
Can NRI/PIO acquire agricultural land/ plantation property / farm house in India?
Are any documents required to be filed with the Reserve Bank after the purchase of an immovable property?
No. An NRI / PIO who has purchased residential / commercial property under general permission, is not required to file any documents / reports with the Reserve Bank.
Can NRI / PIO avail of loan from an authorised dealer for acquiring flat / house in India for his own residential use against the security of funds held in his NRE Fixed Deposit account / FCNR (B) account? How the loan can be repaid?
Yes. Banks cannot grant fresh loans or renew existing loans in excess of Rs. 100 lakhs against NRE and FCNR (B) deposits, either to the depositors or to third parties.
Such loans can be repaid in the following manner:
- by way of inward remittance through normal banking channel or
- by debit to the NRE / FCNR (B) / NRO account of the NRI/ PIO or
- out of rental income from such property
- by the borrower’s close relatives, as defined in section 6 of the Companies Act, 1956, through their account in India by crediting the borrower’s loan account.
How many residential / commercial properties can NRI / PIO purchase under the general permission?
There are no restrictions on the number of residential / commercial properties that can be purchased.
Can NRI / PIO, avail of housing loan in Rupees from an Authorised Dealer or a Housing Finance Institution in India approved by the National Housing Bank for purchase of residential accommodation or for the purpose of repairs / renovation / improvement of residential accommodation? How can such loan be repaid?
Yes. NRI / PIO can avail of housing loan in Rupees from an Authorised Dealer or a Housing Finance Institution subject to certain terms and conditions laid down in Foreign Exchange Management (Borrowing and lending in rupees) Regulations, 2000, as amended from time to time. Authorised Dealers / Housing Finance Institutions can also lend to the NRIs / PIOs for the purpose of repairs / renovation/ improvement of residential accommodation owned by them in India. Such a loan can be repaid (a) by way of inward remittance through normal banking channel or (b) by debit to the NRE / FCNR (B) / NRO account of the NRI / PIO or (c) out of rental income from such property; or (d) by the borrower’s close relatives, as defined in section 6 of the Companies Act, 1956, through their account in India by crediting the borrower’s loan account.
Can a foreign national of non-Indian origin be a second holder to immovable property purchased by NRI / PIO?
However, if the foreign national is a spouse of the NRI, they can be made the second holder to acquire one immovable property (other than agricultural land / farmhouse / plantation property).
Can NRI/PIO rent out the residential commercial property purchased out of foreign exchange / rupee funds?
Yes, NRI/PIO can rent out the property without the approval of the Reserve Bank. Rent received can be credited to NRO, NRE account or remitted abroad. Powers have been delegated to the Authorised Dealers to allow repatriation of current income like rent, dividend, pension, interest, etc. of NRls/PIO who do not maintain an NRO account in India based on an appropriate certification by a Chartered Accountant, certifying that the amount proposed to be remitted is eligible for remittance and that applicable taxes have been paid/provided for. [cf. AP. (DIR Series) Circular No. 45 dated May 14, 2002].
Can a person who had bought immovable property when he was a resident, continue to hold such property even after becoming an NRI / PIO?
Yes, he can continue to hold the residential/commercial property / agricultural land/ plantation property / farm house in India without the approval of the Reserve Bank.