India Real Estate (Overview)
Real estate has become one of the most growing sectors in India with everyone discussing about property market. From developers to buyers to investors-all of them are looking for right investment options in the real estate.

With tremendous development like RRTS, KMP, Rajiv Gandhi Educational City, Barhi Textile Park, Metro line and recent announcement of a New Coach factory in the vicinity, Sonipat has emerged as an industrial, educational & entertainment hub surrounded with best of modern amenities With so many townships being planned in this National Capital Region (NCR), we are looking forward to serve the NRIs who have the taste and aspiration to lead a luxurious life in their home towns. We are catering to the NRIs who want to invest in property in India and are looking for something of international standards; something that commensurate with their lifestyles.


The NRI real estate trends in India:
Apart from steady increase of Indian investors in realty sector, the NRI real estate investors have also seen a significant rise in the past decade. India which considers property investment as a real asset has changed the definition. The realtors have portrayed the property investment as an element of lifestyle and a splurge of luxurious apartments with beautiful commercial complexes and extraordinary retail ventures. This in turn has attracted the NRI potential property buyers. There is an increase in the number of NRI property buyers in India who are planning to settle down in India as well. Ever since the real estate sector underwent a rapid upsurge, people from various countries have been relocating here. As mentioned earlier, the implying of FDI is one of the major reasons.


Why should one invest in Indian Real Estate?
1. The ever growing economy, increasing purchase power of people and demand for real estate sector. It is estimated that the total new demand that could be generated for residential dwellings in the period of 2012–16 will be 11.8 million units across 8 Major cities in India. NCR is expected to see highest demand of 381,000 units in mid & high segments during 2012 – 2016.

2. Demand for 240 million sq. ft. for offices & industrial space, 55 million sq. ft. for retail space, Hospitality sector is expected to see demand of approximately 78 million room nights in the same period. NCR ranks 2nd in the demand for Hospitality sector. NCR is expected to demand approx at 32 million sq. ft. in office space and 93 million sq. ft. in retail space.

3. Wonderful offers being floated by the CREDAI (Confederation of Real Estate Developers Association of India).

4. Tax benefits that are especially applicable for NRIs investing in real estate in India.

5. The procedure has been greatly simplified for encouraging NRI investment in real estate. (Refer Foreign Exchange management (Acquisition and Transfer of Immovable Property in India) Regulations of 2000 and additions to this regulations vide RBI master circular No. 4/2012-13 dated 2/7/2012 applicable for Acquisition and Transfer of Immovable Property by NRI/Persons of Indian Origins.)

6. The depreciated rupee presents an ideal situation for smart investment in Indian real estate.


What can a NRI buy in Indian Real Estate?
The RBI and FEMA regulations have categorically specified the kinds of investment that is permitted for NRIs in the real estate segment. A NRI has the permission to carry out the following with regard to real estate in India:

1. Acquire any immovable property other than agricultural land, plantation property & farm house in India.

2. Acquire any immovable property as described above by way of gift from a resident Indian, citizen of India residing outside or Person of Indian Origin.

3. Acquire property by means of inheritance.

4. Transfer by means of sale of immovable property described above by means of sale to a person residing in India.

5. Transfer agricultural property, plantation land or farm house by way of gift to Indian citizen who is residing in India.

6. Transfer by way of gift residential or commercial property by means of gift to any person who is a citizen of India whether residing within or abroad or a Person of Indian Origin.


What are the Financing Options?
As on today there are several financing options for NRIs looking to buy a house in India. The RBI has stipulated the following norms for NRIs to buy a house in India.

1. The home loan amount for an NRI is restricted to a maximum of 80% of the cost and the balance has to borne directly by the NRI.

2. The remittance of the down payment by an NRI can be made directly from the country of current residence through normal banking channels such as the NRE/NRO account in India.

3. The repayment of the principal as well as the interest amount to the financing agency must be done through similar channels only.


What are the Tax Implications for NRIs Buying House in India?
1. The NRIs will have to pay the stamp duty and the registration fee while purchasing but will have no additional tax due at the time of the purchase.

2. They shall be able to avail the same benefits as resident Indians on the interest paid towards the house loan.

3. In case the property is leased then the tax procedure becomes slightly more complicated. The income received by this means shall be treated as ‘Income from Property’ and hence the standard slabs will be applicable with the standard deductions also. For NRIs residing in countries where worldwide income is taxable such as the US, the individuals will have to pay the tax applicable in that country unless there is a Double Tax Avoidance Agreement with India.

4. As a special benefit, all amount paid towards interest on the home loan repayment is deductible from the taxable income for NRIs without any upper limit.

5. In case an NRI sells off the property, he/she shall be liable for the capitals Gains Tax as applicable under the IT Act.


What to watch out for when buying residential property in India?
While investing in real estate in India, there are several pitfalls one needs to watch out for in order to ensure the safety of their investment.

1. Property Title: The seller must have clear title of the property and the required authority to sell it especially in case of inherited house or a joint property.

2. NDC: There should be no outstanding civic authority dues or electricity/ water bills pending at the time of sale. A No Dues Certificate to this effect must be produced by the seller.

3. Bank Release Letter: In case the property had been mortgaged for a loan or provided as a direct/indirect collateral security for any loan, then the seller must be able to provide a release letter from the concerned bank stating that all outstanding loans have been settled and the documents have been released.

4. Permits: The stated house must have all the required approvals and permits from concerned civic authorities with regard to construction and layout.

5. Litigation: The house under consideration must be verified for any kind of pending litigation.

 
   
Parker Builders Pvt. Ltd.
Phone : +91-11-42459986 / 47804747 Email : info@theparkergroup.in
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