Buying property in India as an NRI is more complicated than locals make it sound and simpler than NRI-specialist brokers want you to believe. Here's the practical reality.
Can NRIs Buy Property in India?
Yes — with restrictions. Under FEMA (Foreign Exchange Management Act), NRIs can freely buy:
NRIs cannot buy:
Joint purchase is allowed with another NRI, but not with a person resident in India who is not a relative.
Funding the Purchase
**Using NRE account funds:** NRE accounts hold your foreign earnings converted to INR. These funds are fully repatriable — you can send the money back abroad. Home loans funded by NRE account repayments can later be repatriated.
**Using NRO account funds:** NRO accounts hold Indian-source income. Repatriation is limited (up to $1 million per financial year with CA certification). Property bought using NRO funds can be sold, but repatriation of proceeds is more restricted.
**Home loans for NRIs:** Indian banks offer home loans to NRIs. Eligibility is similar to resident Indians plus proof of foreign income and employment. HDFC, SBI, ICICI, and Axis all have NRI home loan products. Loan-to-value is typically 75–80%. The challenge: EMI must come from an Indian account — NRE or NRO — not directly from your foreign bank.
The Power of Attorney Issue
Most NRIs can't be physically present for every step. A registered POA (Power of Attorney) authorises a trusted person in India to sign documents on your behalf.
**Critical:** The POA must be notarised in your country of residence AND attested by the Indian Embassy/Consulate. Skipping the consulate attestation makes the POA invalid in India. Many NRIs get burned here.
If your relative has an unattested POA for your property transaction, it's not legally valid. Get this right.
Builder Credibility: The Most Important Due Diligence
India's real estate sector has a long history of project delays, fund diversion, and builder insolvency. Before buying from any builder:
1. **Check RERA registration** — all new projects above a certain size must be registered with RERA (Real Estate Regulatory Authority) in that state. Find the project on your state's RERA portal and check status.
2. **Check for litigation** — search the builder's name in MCA21 (Ministry of Corporate Affairs) database and the relevant High Court case search. Existing disputes are public.
3. **Verify title documents** — engage a local property advocate for title search. Cost: ₹5,000–15,000. Non-negotiable for any purchase.
4. **Prefer ready-to-move or near-completion** — off-plan purchases are higher risk. Buying a flat that's 90% complete is far safer than trusting a builder's completion timeline 3 years out.
Tax Considerations
**TDS on NRI property purchase:** If you're buying from a resident Indian, no TDS issue. If buying from another NRI or if the seller is an NRI, TDS applies at 20–30%. Your responsibility as the buyer to deduct and deposit.
**Capital gains on sale:** When you eventually sell, short-term capital gains (held <2 years) are taxed at your applicable slab. Long-term gains (>2 years) are taxed at 12.5% without indexation benefit. Index funds often outperform real estate on post-tax returns — factor this into your decision.
**Rental income:** Taxable in India. NRO account treatment applies. You must file an ITR in India if you earn rental income.
Common NRI Property Mistakes
Our [NRI Tax Calculator](/tools/nri-tax-calculator) can help you estimate tax obligations on property transactions.