Non-Resident Real Estate Guide: What Every NRI Should Know

If you live abroad and want a home in India, the process can feel overwhelming. But you don’t need a law degree to get it right. Below you’ll find the basics on eligibility, financing, taxes and how to avoid common traps.

Eligibility and Documentation Made Simple

First, check if you qualify as an NRI (Non‑Resident Indian). The government defines an NRI as someone who has lived outside India for at least 182 days in a financial year. That status lets you purchase residential property without needing a special permit.

Gather these core documents before you start searching:

• Valid passport and visa or overseas work permit.
• Proof of NRI status – usually a copy of the passport showing the entry/exit dates.
• PAN (Permanent Account Number) – you need it for any tax filing in India.
• Form 16A or equivalent tax residency certificate from your country of residence.

Having everything ready speeds up the sale agreement and helps the seller feel confident that the deal will close.

Financing, Taxes and Ongoing Costs

Most NRIs prefer to fund the purchase from overseas savings, but you can also get a home loan from Indian banks that cater to NRIs. These loans usually require a higher down payment (30‑40%) and a stable overseas income proof.

Taxes are the trickiest part. When you buy, you’ll pay stamp duty and registration fees – rates vary by state, often between 5‑7% of the property value. After purchase, you’ll face an annual property tax, which is usually a small percentage of the assessed value.

When you eventually sell, capital gains tax applies. If you hold the home for more than two years, it’s considered a long‑term gain and taxed at 20% plus surcharge. You can reduce this tax by investing the profit in specified bonds under Section 54EC.

If you plan to rent out the property, rental income is taxable in India, but you can claim a standard deduction of 30% for maintenance and repair costs without needing receipts.

Don’t forget about repatriation. Indian regulations let you transfer up to USD 1 million of sale proceeds abroad each financial year, provided you have a valid FEMA (Foreign Exchange Management Act) clearance and the necessary tax clearances.

Lastly, consider a power of attorney if you can’t be in India for signings. Choose a trustworthy relative or a professional service, and ensure the document is notarized and apostilled in your country of residence.

With the right paperwork, clear financing, and an eye on taxes, buying or renting property as a non‑resident becomes a manageable project rather than a headache. Stay organized, ask your bank or a real‑estate advisor for help, and you’ll be enjoying your Indian home in no time.