Money Matters: 5 Things NRIs Should Keep In Mind While Investing In Real Estate In India

Indian real estate has seen remarkable growth in the past couple of years. Prashin Jhobalia, Vice President of Market Strategy at House Of Hiranandani, a real estate firm, said, “The rise of hybrid work arrangements, a longing to reconnect with their homeland, and a quest for an elevated quality of life have all contributed to NRIs' inclination to purchase properties in India.”

He added that the depreciation in the value of the rupee has opened the window for NRIs to invest in real estate at a high rate. Sharing his experience, he said that people are looking to invest in luxury residential properties offering high-end amenities.

According to a report published in the India Brand Equity Foundation (IBEF), the Indian real estate industry is expected to grow to ₹65,000 crores by 2040. It stood at ₹12,000 crores in 2019. If you want to be a millionaire or billionaire by investing in this sector, here are five things you must note.

Due Diligence

You should conduct due diligence before investing in real estate. You should look into the reputation of the seller, their credibility, and their track record to ensure you are not being lured to invest in a spoof property.

You can also verify the ownership and title of the asset to ensure that it is free from any legal disputes. A property consultant or lawyer can assist you with this query.

Market Trends

The first step to researching market trends is to understand and verify the location of the property. Study Infrastructure development, local market dynamics, potential for capital appreciation, and property tax. Prashin Jhobalia said that it will allow you to keep an eye on the market trends and help you make an informed decision if you are buying the property only for investment purposes.

Don't Miss: Details Of Investment Regulations For NRIs In India

Regulatory Framework

If you are planning to invest in India, you should understand the legal and regulatory framework that governs real estate investments in the country. You must familiarise yourself with the Foreign Exchange Management Act (FEMA) rules about NRIs (Where NRIs Can Invest In India) investing in the sector and repatriation of funds.

Financial Planning

Before you invest, set aside a budget. Prashin Jhobalia said that many people make the mistake of not planning before investing in real estate. Apart from the base rate of the property, you have to plan for additional registration fees, the cost of stamp duty, and other charges.

It will help you understand how much you can afford, how much loan you will have to take, if any, and devise an instalment breakup.

Don't Miss: Income Tax For Wedding Gifts

Tax Implications

When you make any investment, especially in the real estate sector, it comes with a tax implication. Therefore, you must familiarise yourself with property tax, stamp duty, and capital gains tax that will affect your profit margins and financial planning in future. The expert suggested consulting a person who specialises in NRI taxation to ensure your compliance with Indian laws and if there is a possibility to avail of tax deductions that are available for NRIs.

Prashin Jhobalia shared that NRIs from the Gulf region, Singapore, the US, South Africa, the UK, Kenya, and Germany remain significant contributors to the real estate industry in India.