Even a slow rise in prices of the properties during demonetization did not let the NRIs investment go down during the entire period. Thanks to the launches of policies like RERA that helped to sustain the Indian realty when other industries were scattering under the impact of cash-crunch.
On the other side, the positive perspective of the Indian economy have gained the faith of Global investors and managed to gravitate the inactive investors. Overall, today, India realty has become the most preferred destination for investment by the NRIs (Non-Resident Indians) and around $11.5billion investment in the realty by the NRIs have already been pegged by some projections.
Here are 5 reasons why NRIs still find the best bet in the Indian Real Estate
- Low Property Price
It is always a deal of benefits for NRIs when they buy a property in India. As property price in India is seen rising with pace as compared with properties in the West, it’s a great opportunity for the NRIs to invest here today to earn maximum benefits in a long time. With the announcement of Affordable Housing Scheme, to be launched by the year 2022, NRIs now have secure and sure-shot reason to invest in the realty here.
- Tax Benefits
NRIs can claim tax benefits on several matters. They are legally exempted from regular Indian resident. Next, under section 80C, they have benefits over tax deduction of 30% on principal or interest whilst repaying the home loan. Under the same section, NRIs can claim charges levied on registration and stamp duty for the purchased property. However, the income they earn from renting a property is taxable.
- Rental Income
As a part of investment benefits from Indian realty, NRIs plan to purchase a property and earn revenue by renting them off. They can credit their rented income in their NRE (National Resident Rupee) or NRO (Non-Resident Ordinary Rupee) account. In case none of these is available, they can get the rent credited directly to their account in the country where they are living.
Surely, the income earned through a rented property in India is taxable and the tax. i.e. 30% of the rent amount has to be deducted by the tenant. The NRI receives the TDS certificate for this deduction which is used to claim the Tax Returns and get the requisite amount refunded.
- Easy Policies
Certain policy restrictions levied with other assets such as equities and Mutual Funds in India pull back NRIs interest for investing in India. On the other side of the coin, Indian realty gives the ease to the policies for investing in Indian real estate market. These relieve include:
- NRIs do not require any special permission in order to purchase an immovable property in India.
- Since they live abroad, they are free to give the power of attorney for the property to be purchased to their friends or family member in order to complete the process of purchasing.
- RBI has issued general instructions to the banks and housing finance companies that are registered with National Housing, for NRIs’ home loan wherein they are easily availed with a home loan in India, in Indian currency along with tax exemption benefits, which is more than the regular residents of India comparatively.
- They are free to invest in any number of properties apart from agricultural lands for which they need to take special permission from the RBI.
5. Retirement Benefits
In 2007, India had launched a product for senior citizens that they called reverse mortgage wherein the senior citizens are given loan for staying in the home without asking them to pay monthly payments. The loan is issued by the Federal Housing Administration according to those guidelines; a senior citizen is allowed to take benefit of the reverse mortgage loan.
To disappointment to the Indians, the product wasn’t found much in demand and hence, is quite unpopular in India. Taking benefit of which, NRIs aged above 62 can take advantage of reverse mortgage loan for purchasing a property in India. Property so owned through reverse mortgage loan is non-taxable by the NRIs.
These five reasons above give NRIs valid points to invest in Indian Realty market – personal or commercial.