Some things in this world are still going fine jointly! Take property ownership in India, for instance – especially when we live in a country where the property is still one of the most coveted ways to connect with your roots.
For NRIs, purchasing a property in India is much more than an investment opportunity. It is a way of seeking connections to the native place – and also to find a ‘home’ for oneself.
It helps if the property ownership is joint with a known relative or friend who is a resident Indian.
Read: Saving yourself from fraud while buying or selling a property
What do you keep in mind while buying property jointly?
- As with other things, the purchase of property by NRIs in India is also governed by guidelines issued by RBI.
- While the RBI has issued General guidelines for purchase of property by NRIs also, in some cases, special permission from RBI or approval from Government is required before making an investment in the immovable property by NRI.
- RBI allows NRIs to jointly own a property with another NRI or a resident Indian.
- However, in cases where the resident Indian is otherwise ineligible to buy property, then the NRI will also not be allowed to buy the property with that resident Indian (irrespective of the financial contribution of the other person).
- Residences or commercial property can be bought by NRIs freely.
- There is no restriction on the number of properties that can be purchased.
- There is no requirement of obtaining any specific permission in such cases and also no need to send any information to RBI for this purchase.
- There is no need to file any document with RBI in this regard.
- In case the interested NRI is unable to come to India for completing the property purchase, the same process can be carried out by giving a special POA (Power of Attorney) to another person.
- For the purchase of any agricultural property or a farmhouse or plantation, NRIs need to apply for specific permission from RBI.
- However, NRIs can inherit the same from any resident Indian.
What does the FEMA say?
- There are no specific guidelines under FEMA for purchase of property by NRI jointly with resident Indians.
- An NRI is allowed to sell or gift any immovable property to any resident Indian.
- Any property can be gifted to NRI by an NRI other than agricultural property, plantation or a farmhouse.
- The restrictions which apply to NRIs for purchase of agricultural property, farmhouse or plantation continue even if it is a joint purchase.
- The transactions have to be routed through proper banking channels under FEMA and RBI guidelines.
- For all purposes of investment in real estate, NRIs are treated at par with the PIOs.
What if a person becomes an NRI after buying property in India?
- In case an individual has bought property in India and acquires an NRI status after that, he can continue holding the property
- All taxes will apply to the property as per the laws of the country
So Yes! Relax NRIs – You CAN buy property jointly with resident Indians or other NRIs. Make sure you adhere to RBI and FEMA rules regarding the same.