*YOUR SEARCH FOR PROPERTY ENDS HERE * INDIA'S LEADING PROPERTY CONSULTANTS & ADVISIOR * REFER HOT PROPERTIES FOR UNBELIVABLE OFFERS
 
BENEFITS TO NRIs FOR INVESTMENT IN REAL ESTATE
       Covers -Coninued from Previous Page

  * NRI Investment rules simplified
  * Is this the right time for NRIs to invest in real estate?
NRI Investment rules simplified

Rules relating to NRI / PIO investment in real estate have been considerably liberalised and simplified, says V. Nagarajan
The federal government has considerably eased entry norms for NRI investment in real estate. Foreign citizens of Indian origin (PIOs) have been permitted to invest without the need to obtain approval from the Reserve Bank of India. With the passage of FEMA, the power to effect repatriation proceeds has been decentralised and delegated to authorised foreign exchange dealers. What is more, even the rental income can be repatriated now. It makes sense for NRIs now to earmark a portion of their investment portfolio in real estate and earn competitive return on investment.
Liberalised entry norms:
The government has removed the lock-in period of three years prescribed earlier for repatriation of sale proceeds of immovable property purchased through inward remittances. The notification forms IPI-1-8 have been done away with and there is no need to apply to RBI for repatriation. Authorised foreign exchange dealers have been empowered with powers to deal with such cases of repatriation without reference to RBI. However, the prohibition still continues for investment in agriculture land, farmhouse and plantation (excluded properties) in India.
Dividend arising out of investment in the business of real estate development is freely repatriable. No permission from the RBI is necessary while selling the shares of the real estate development company in India to another NRI. However, prior permission is needed only when it is sold to a resident.
Yet another significant development is that NRIs/PIOs can remit upto $ 1 million per year out of the assets held in India and acquired by them by way of inheritance or legacies. The property, however, would have to be held by them for a period of not less than 10 years. Moreover, rental income can be repatriated every year. This is applicable even in cases where the property was bought out of rupee income as a resident in India. Here again, powers have been decentralised to enable authorised foreign exchange dealers to effect remittance of rental income on production of a certificate from a chartered accountant and after payment of taxes where necessary.
Investors are keen to seek property management services while investing in real estate. Unlike in the West and European countries, property management concept is yet to gain momentum in India. While a few international property consultants are extending such services to corporate and MNCs, no similar service is made available for retail investors. A few builders offer such services but confine their activity only to investors in their projects only. There are no independent professional project management services available to lease, deposit rent and remit statutory dues to the appropriate authorities on behalf of the landlords. But things are changing slowly. The Bangalore based Shriram Properties has just floated a company, Shrirampropcare to extend property management services for investors in real estate.
NRI/PIOs investment rules further simplified
- No need to obtain permission from RBI.- IPI form for declaration of immovable property acquired in India by a person resident outside India.- There is no lock in period to repatriate original investment made in foreign exchange through normal banking channels.- NRIs can take away upto $1 million from sale of properties and assets in India. - Indian corporate having overseas presence with branches and offices, can now acquire immovable property abroad. This will be allowed for the purposes of their business and staff accommodation

Is this the right time for NRIs to invest in real estate?

After a rollercoaster ride, property prices have stabilised in major cities and towns. With a number of housing finance companies extending home loans at competitive lending rates and fiscal incentives, the time is just right to invest in real estate in India.
The Reserve Bank has removed the lock-in period of three years prescribed earlier for repatriation of sale proceeds of immovable property purchased through inward remittances. Moreover, this facility will also be available to the NRIs/PIOs who have already made payment for acquiring immovable property in India. Earlier NRIs were allowed to repatriate the original investment made in foreign exchange upto two residential units after a lock in period of three years. With the passing of FEMA regulations, forms IPI-1-8 have been done away with and there is no need to apply to RBI for permission for repatriation. Authorised foreign exchange dealers have been empowered with powers to deal with such cases.
The prohibition continues for investment in agriculture land / farmhouse or plantation properties (excluded properties) in India.
Dividend arising out of investment in the business of real estate development is freely repatriable. No permission from the RBI is required while selling the shares of the real estate development company in India to another NRI. However, prior permission is needed only when it is sold to a resident.
Yet another significant development is that NRIs/PIOs can remit upto $100,000 per year out of the assets in India acquired by them by way of inheritance or legacies. A notification for carrying out suitable amendments in the regulations is being issued.
Moreover, rental income can be repatriated every year. This is applicable even in cases where the property was bought out of rupee income as a resident in India. This has come in handy even for those who would like to migrate to other countries but keen to retain immovable property in India and repatriate rental yields in foreign exchange. What is more, powers have been decentralised to enable authorised foreign exchange dealers to handle such remittances without reference to RBI.

Top

-END-
HOME