Read this before you buy a property in India

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Contrary to popular belief, NRIs are not allowed to buy all types of properties as resident Indians can. There are Reserve Bank of India guidelines and Foreign Exchange regulations that restrict NRIs from buying certain types of properties.

If you are an NRI, you cannot purchase any agricultural land, farm house or plantation property. You can have ownership of such property only if they’ve been inherited (received as an heir at the death of the previous holder).

However you can own both residential as well as commercial properties in India and there is no restriction on the number of properties you can buy.

The Reserve Bank of India website has detailed explantations on each type of property transaction. In order to simplify and make it easier to understand, here is a table we have compiled for NRIs:

Type of PropertyPurchaseReceive as giftInheritSellGift to others
Residential PropertyYesYesYesYesYes
Commercial PropertyYesYesYesYesYes
Agricultural LandNoNoYesYesYes
Plantation PropertyNoNoYesYesYes
Farm HouseNoNoYesYesYes

Check the property deed

Eventhough your proposed property may look like a housing plot, check the property deeds carefully to see if it has been identified in the past as an agricultural land, farm house or plantation property.

Checking the past property documents (at least for last 20-25 years) with the help of an expert is good to avoid future issues.

Even when you book or buy an apartment (flat) it is a must to check the past property documents.

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Payments

Payment can be made by NRI out of:

  • funds remitted to India through normal banking channels OR
  • funds held in NRE / FCNR (B) / NRO account maintained in India.

No payment can be made either by traveller’s cheque or by foreign currency notes or by other mode except those specifically mentioned above.

28 Comments

  1. Dear Sir,
    I am an OCI born in India, lived until 33 years of my age working with my Father in my own farm land.
    I came to Australia when I was 35 year old and became citizen here. since I come from a farming family my Father who is a farmer wants to buy a farm land for me and he wanted it to give it to me, he also wants me to provide fund for it. How can I have this land when he buys it? or is there anyway that my Father can lawfully give this land to me after buying. How do I fund him? means through my NRI cheque?
    Thank you for your legal advise and support in this matter.Kind Regards. John

  2. Dear sir,
    iam residing qatar in 3 years i plan to buy residential apartment in tamilnadu around 25 lakhs ,is it possible to buy a property in india in the name of myself without am going to tamilnadu
    plz guide me

  3. I am a NRI and I have an agricultural property in my name inherited from my father. I like to sell it off and like to purchase an agriculture land only at a different suitable place from the same fund received on sale at my name, is it possible? Or can I purchase this land on my son’s name ( by using the same sale proceeds ) who is already a resident in India?

  4. Very useful post. Few points I can add here is to check the payment schedule upfront so you know when do you need to pay to the builder.

    If you cannot visit India, you need to have someone in India do formalities (with bank/builder) on your behalf for which you need to issue Power of Attorney accordingly.

  5. Ali Mohamed on

    HI Sir i am NRI Living in UAE i want to buy home to my wife name payment though my NRE A/c because of every 2 years once only i can come to INDIA its legal based on new binamy act 2016 please clarify

  6. Hi I’m trying to sell a 2BHK in Pune. Excellent condition, great building and location.
    1200 sq ft, abundant sunlight, spacious, in heart of Baner – commercial district in Pune. Terrace floor, gated community, modern building. Available for sale by owner. Please contact K. Ashok 98230-75222.

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