Thursday, December 27, 2007

Property Buying Guide for NRIs

Planning to buy property in your home country? Things are not tough anymore.

1. Indian Citizen – Foreign Passport Holder - PIO Card– Property buying eligibility

If you are of an Indian Origin and holding an Indian Passport then you are entitled to buy any property. If you are an overseas passport holder like a US Passport or a British Passport Holder, then you need to have a PIO Card, or a Person of Indian Origin Card. This can be applied at the Indian Embassy or Consulate in your country where are you residing or you could enquire with them for further details. Even, if you have your fathers or mothers’ passport or birth certificate or any other proof of their being Indian Citizen, then it is ok. It is essential although, to carry that proof with you.

2. Government Permissions

Person or Persons of Indian Origin need not require any approval by the Government of India to buy immovable properties.

3. Repatriation

If you are buying the property through your NRE accounts, then you could repatriate your sale proceeds and rental income to your foreign account after deduction of Income Tax and Capital Gains on the Sale proceeds as applicable.

4. NRE/NRO Accounts

Please ensure that before you are coming to Mumbai, you should have an NRE and NRO Bank Account set up in India. NRE accounts are used for pay outs. In your NRO accounts you can deposit and from there you could transfer the funds to your NRE for repatriation as required.

5. Buying Processes

If you are an NRI, you should ideally remit funds from your bank to the Indian bank where your NRE Account is set up to buy a property. If you buy the property through the NRE account, then the source of funds is not required to be disclosed usually to any one as this is your inwards remittance. Please remit at least INR 500,000/- to 10,00,000/- in your bank accounts to India prior to your leaving your country where you are based. This will act as placing the down payment of at least 10% with the builder/property owners, if you are buying a property of around Rs 1 Crore, this amount can be proportionately increased if you are looking at high value properties.

6. Power of Attorney (POA)

If you are settled outside India and come once if a couple of years, then for all practical purposes, you should give a specific power of attorney to some one here in Mumbai, so that in your absence, things like registration, possession, execution of agreement for sale, agreement of leave and license etc, can be taken care of with ease.

You could give a very specific POA to some one e.g. only for buying, or leasing, etc. you could fine tune the rights you would like to give out and clear that up.

7. Names in the Sale Deed

Please decide the names in which you need to have the property in.

8. Home Loan

If you are looking to buy your property with a home loan then it is even better, as you could save on a lot of down payment from your personal account. Usually, you could get a loan of around 85 to 90% of the property value. Your personal documents required for your home loan pre-approval only. Disbursement will happen only when you buy the property.

Documents required by salaried (Non Resident Indian)

A) Loan application form duly filled and signed. Two photographs of both the applicant and the co-applicant with signature on front and back.

B) Copy of passport. (Along with latest visa stamp and date of entry stamp), Proof of residence in India. (Electricity / Telephone bill / Ration card / Society maintenance bill / LIC Policy / Mobile bill / Utility bill like Gas Supply bill), Proof of residence in Abroad (Electricity / Telephone Bill / Mobile Bill / Utility Bill e.g. Gas Supply bill / Driving License), Copy of Identity card / Social Security card / Work permit (Hikama) Copy of credit card. Last six months bank statements of all the NRE / NRO account in India.

C) Last six months bank statements of bank account held abroad where salary is credited Copy of Contract / Employment Certificate Copy of Annual Salary Certificate specifying the mode of payment (If payment is fully or partly received in cash) Salary Slips for the immediately past 06 months.

D) Copies of Sanction Letter of Loans availed in India and abroad Self Declaration of Residential Status Initial Processing fees cheque of Rs 5612/-, this is charged by the Bank, we can do away with this for the time being and once you want to have the application approved you please send this to us.

E) Please note that all the above documents need to be certified by the Indian Embassy abroad. Documents relating to income / salary needs to be attested as true by your employer.

F) All documents in foreign language need to be translated in English.

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