WHO CAN INVEST IN REAL ESTATE?
ü Any person who is Indian Citizen residing in India
can invest/acquire/ transfer real estate without any permission from the
Reserve Bank of India.
ü All persons, whether resident in India or outside
India, who are citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China,
Iran, Nepal or Bhutan require prior permission of the Reserve Bank for
acquiring or transferring any immovable property in India.
ü A person resident outside India, who has been
permitted by the Reserve Bank to establish a branch or office or place of
business in India (excluding a Liaison Office) in order to acquire immovable
property in India which is necessary for or incidental to the activity.
However, in such cases a declaration, in prescribed form is required to be
filed with the Reserve Bank, within 90 days of the acquisition of immovable
property.
ü An Indian citizen resident outside India does not
require any permission to transfer any immovable property, to a citizen of
India who is resident in India.
ü An Indian citizen resident outside India does not
require any permission to transfer any immovable property:
o
is a citizen of India
resident outside India;
o
is a person of Indian origin
resident outside India.
ü A person of Indian origin resident outside India
does not require any permission to acquire any immovable property other than
agricultural land/farm house/plantation property in India by purchase, from out
of funds:
o
Received in India by way of
inward remittance through banking channel from any place outside India.
o
Held in any non-resident
account maintained in accordance with the provisions of the Act and the
regulations made by the Reserve Bank under the Act.
ü A person of Indian origin resident outside India
does not require any permission to acquire any immovable property in India
other than agricultural land/farm house/plantation property by way of gift from
a person resident in India or from a person resident outside India who is a
citizen of India or from a person of Indian origin resident outside India.
ü A person of Indian origin resident outside India
does not require any permission to acquire any immovable property in India by
way of inheritance from a person resident outside India who had acquired such
property in accordance with the provisions of the foreign exchange law in force
at the time of acquisition by him or the provisions of these Regulations or
from a person resident in India.
ü A person of Indian origin resident outside India
does not require any permission to transfer any immovable property in India
other than agricultural land/farm house/plantation property, by way of sale to
a person resident in India.
ü A person of Indian origin resident outside India
does not require any permission to transfer agricultural land/farm
house/plantation property in India, by way of gift or sale to a person resident
in India who is a citizen of India.
ü A person of Indian origin resident outside India
does not require any permission to transfer residential or commercial property
in India by way of gift to a person resident in India or to person resident
outside India who is a citizen of India or to a person of India origin resident
outside India.
ü Repatriation outside India, including credit to
RFC, NRE or FCNR account, of sale proceeds of any immovable property situated
in India, requires prior permission of the Reserve Bank except in circumstances
stated in paragraph below.
ü The event of sale of immovable property, other
than agricultural land/farm house/plantation property in India by a person
resident outside India, who is a citizen of India, or a person of Indian
origin, the authorized dealer may allow repatriation of the sale proceeds
outside India, provided all the following conditions are satisfied.
ü The immovable property was acquired by the seller
in accordance with the provisions of the Exchange Control Rules/Regulations/Law
in force at the time of acquisition, or the provisions of the Regulations
framed under the Foreign Exchange Management Act, 1999.
ü The sale takes place after three years from the
date of acquisition of such immovable property or from the date of payment of
final installment of consideration for its acquisition, whichever is later.
ü The amount to be repatriated does not exceed:
o
The amount paid for
acquisition of the immovable property in foreign exchange received through
normal banking channels or out of funds held in foreign currency non-resident
account.
o
The foreign currency
equivalent, as on the date of payment, of the amount paid where such payment
was made from the funds held in non-resident external account for acquisition
of the property.
o
In the case of residential
property, the repatriation of sale proceeds is restricted to not more than two
such properties.
ü All requests for acquisition of agricultural
land/plantation/ property/farm house by any person resident outside India or
foreign nationals may be made to the Chief General Manager, Reserve Bank of
India, Central Office, Exchange Control, Department, Foreign Investment
Division (III), Mumbai.
ü The NRIs/PIOs can freely rent out their
immovable property in India without seeking any permission from the Reserve
Bank. The rental income being a current account transaction is freely
reportable outside India.
Prohibition on Direct Investment outside India
No Indian party shall make
any direct investment in a foreign entity engaged in "real estate business" or
banking business except after taking prior permission from RBI.
‘Real estate business’
means buying and selling of real estate or trading in Transferable Development
Rights (TDRs) but does not include development of townships, construction of
residential/commercial premises, roads or bridges.
(Notification No. FEMA 120/
RB-2004 dated: July 7, 2004)
