NRIs Can Also Buy Residential Plots

Indians living abroad often desire to build their own home in their native country. For those residing within the country, building a home in any location is straightforward. However, if they live abroad, buying a plot and building a house involves various legal procedures. 

Many families have members working abroad. When they wish to buy a house or a plot for the welfare and savings of their family, it is essential to follow certain legal procedures.

Key Customer Base: NRIs Can Also Buy Residential Plots

Financial institutions have simplified procedures for NRIs (Non-Resident Indians) who wish to buy plots or build houses in India. These institutions consider NRIs as key customers, recognizing that NRIs have the economic capability to repay home loans on time.

Bank Loans: NRIs Can Also Buy Residential Plots

When NRIs apply for a home loan or to buy a plot, they can get up to 80% of the value of the plot or house as a loan. They can repay the loan from their country of residence through NRO (Non-Resident Ordinary) or NRE (Non-Resident External) bank accounts. If they already earn income in India through rent or dividends, they can use that income to repay the loan directly.

Taxes and Benefits:

When obtaining a bank loan, repayments for both principal and interest must be made through a bank account. When registering a house or plot, NRIs are entitled to certain tax benefits along with the prescribed fees and taxes. 

NRIs are exempt from paying tax on the interest amount paid for home loans. However, when selling the purchased house or plot, they must pay 'Capital Gains' tax under the Income Tax Act.

What Can Be Purchased?

1. Apart from agricultural land, plantation property, and farmhouse, NRIs can purchase other immovable properties.

2. NRIs can receive immovable properties in India as gifts from resident Indian citizens, other NRIs, or people of Indian origin residing abroad.

3. NRIs are allowed to inherit ancestral properties in India.

4. They can sell their immovable properties in India as per their preference to resident Indians.

5. NRIs can gift or sell their agricultural lands, farmhouses, and properties related to farming to residents in India.

6. NRIs can gift or sell their own house or vacant plot in India to other NRIs or persons of Indian origin residing abroad.