Buying property in India as an NRI

Buying a home in India from abroad is common and, for most residential and commercial property, needs no special permission. What trips people up is not the rule itself but the detail: what you are allowed to buy, how the money must travel, and the paperwork that has to be signed in India while you are somewhere else. This guide walks through each.

Who this applies to

Indian foreign exchange rules treat Non-Resident Indians (Indian citizens living abroad) and Overseas Citizens of India (OCI cardholders) in largely the same way for property. If you are a foreign citizen without an OCI card, different and stricter rules apply, and you should take advice before committing.

What you can and cannot buy

The RBI's Master Direction on acquisition and transfer of immovable property under FEMA sets out the position. NRIs and OCI cardholders can buy immovable property in India other than "agricultural land/ plantation property/ farm house". In practice that means flats, houses, villas, offices, shops and non-agricultural plots are open to you; farmland, tea or coffee estates and farmhouses are not, unless you inherit them or obtain specific permission.

There is no limit on the number of residential or commercial properties you can buy. A limit does apply later, when you sell and want to send the money abroad (see our guide on selling property).

Two further checks matter as much as the foreign exchange rule:

RERA registration. Most new projects must be registered with the state's Real Estate Regulatory Authority. Check the project's RERA number on the state RERA website before you pay a booking amount, and check the agent's RERA registration too. Under RERA, a registered agent may not facilitate a sale in a project that should be registered but is not.
Title and approvals. For resale homes and plots, the title chain, encumbrance certificate, approved plan and, for plots, the non-agricultural conversion order should be checked by a lawyer. Your lender's lawyer will also check them, but their job is to protect the lender.

How you must pay

Payment for the property must come either as an inward remittance from abroad through normal banking channels, or from funds held in your NRE, FCNR(B) or NRO account in India. You cannot pay with foreign currency notes or travellers' cheques. Keep the bank advice for every remittance and every payment to the developer or seller. These records are what allow you to repatriate the sale proceeds later.

Financing with a home loan

Indian banks and housing finance companies lend to NRIs for buying or building a home. The loan is in rupees and is repaid from your NRE or NRO account, by remittance from abroad, or from rental income in India. Lenders will usually finance only part of the property value: RBI sets maximum loan-to-value ratios for housing loans by loan size, and individual lenders may lend less. You pay the rest, plus stamp duty and registration charges, as your own contribution.

Rupee loans to NRIs cannot be used for real estate business, agricultural or plantation activities, or construction of farmhouses, so a loan to buy a home to live in or rent out is fine, but a loan to trade in land is not.

Signing from abroad

You do not usually need to fly to India. The common route is a power of attorney in favour of a family member or trusted person in India, who signs the agreement for sale, loan documents and sale deed for you. A power of attorney signed abroad is normally attested at the Indian embassy, high commission or consulate, or apostilled where that is accepted, and must then be stamped in India within three months of arriving there. If it will be used to register a property transaction, it usually has to be registered too. See our guide on power of attorney from abroad.

Costs to plan for

Stamp duty and registration charges (set by each state, typically a percentage of property value)
GST on under-construction property bought from a developer
Legal fees, valuation fees and the lender's processing fee
Society transfer charges, maintenance deposits and property tax for resale homes
If you buy from a non-resident seller, you, as buyer, must deduct tax at source on the payment. Ask your adviser.

A simple checklist

Confirm the property type is allowed (not agricultural land, plantation or farmhouse).
Check the RERA registration of the project and the agent.
Get a home loan eligibility check before you book.
Arrange remittances or NRE, FCNR(B) or NRO funds, and keep every bank advice.
Sign a power of attorney if you will not be in India.
Have the title checked independently.

This is general information, not legal or tax advice. Rules change; check with a qualified professional before acting.