Advice on buying property in India

In the last few years, India has become a property investment hotspot with many large scale property developers either in the process of developing or planning developments. This real estate boom has not only lured dozens of consultancy and finance companies but also foreign investors and nationals. Fera (Foreign Exchange Regulation Act) has given way to Fema (Foreign Exchange Management Act) and things have improves and changed since then. What is being laid emphasis on now is the residential status.

PIO’s and NRI’s

As such there are two categories broadly; one belongs to Indian residents and the other to foreign residents. These foreign residents can be further be categorized as NRI’s and PIO’s. To define, where an NRI is an Indian citizen residing outside India, a PIO is a citizen of another country who is regarded so because at one or the other point of time, held an Indian passport at any time or if his father or grandfather has been a citizen of India.

Non Indian’s Need Approval

These facts are significant for foreign nationals while dealing with property in India. The law makes it very clear that a foreign citizen who is a resident of India can buy and sell properties in but a foreign citizen of non-Indian origin can acquire any immovable property in India only with the prior approval of the RBI (Reserve Bank of India). The NRI’s and PIO’s have a general permission to purchase real estate in India, nether there has been a limit fixed to the properties. However a foreign national of non-Indian origin can acquire with the consent of RBI but only residential accommodation on lease and that to for not more than five years. Thus, the foreign nationals need to document their citizenship before acquiring any land in India. Where it may seem that Fema makes it a little more difficult for foreign nationals of non-Indian origin to buy property in India, you shouldn’t forget that the government is encouraging the real estate boom in India!