Real Estate in India

Real estate in India is an opportunity to invest in one of the fastest growing and most promising real estate markets in the world. India offers a wide range of real estate options, from luxury apartments in metropolitan areas to cozy homes in suburbs and resort areas.

In India, there are certain rules and restrictions for foreigners to purchase real estate properties. The Reserve Bank of India (RBI) under the Foreign Exchange Management Act (FEMA) regulates the terms and conditions for the purchase of real estate.

Persons of Indian origin (NRI/OCI/PIO): the most favorable conditions are for persons of Indian origin residing abroad. These include Non-Resident Indians (NRIs), OCI (Overseas Citizen of India) card holders and PIO (Person of Indian Origin) certificate holders. They can buy property in India from real estate developers, developers, locals or other NRIs/OCIs by paying for the transaction from their bank accounts or through international transfers. They also have access to mortgage loans from Indian banks. In addition, NRIs/OCIs can also receive properties as gifts from relatives who are residents of India or other NRIs/OCIs. The definition of relatives in this case is quite broad. They are also entitled to inherit property from both residents and non-residents of India who have complied with FEMA rules. A special feature is the right of NRIs/OCIs to inherit agricultural land, farm houses and plantations.

Foreign spouses of NRI/OCI: If the foreigner is married to an NRI or OCI for at least 2 years, the spouses can jointly purchase one apartment or house in India (other than agricultural land).

Foreigners residing outside India: foreigners who do not have Indian roots and reside abroad are not allowed to buy real estate in India. The only exception is if they have inherited property from an Indian resident. But they can transfer such inherited property to third parties only with the permission of RBI.

Foreigners living in India: for foreigners legally residing in India, there are more loyal rules for purchasing real estate. Citizens of countries like Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, Bhutan, Macau, Hong Kong, DPRK require prior permission from RBI for purchase. But they can rent for up to 5 years. People from other countries (USA, UK, Australia, etc.) residing in India are allowed to buy apartments, houses and other properties here without any special restrictions.

Thus, the rules for buying real estate in India for foreigners vary greatly depending on their citizenship, place of residence and ethnic origin. At the same time, the greatest privileges have persons of Indian origin living abroad.

Introduction and verbal agreement: in this step, the buyer and seller meet and agree on the terms and conditions of the sale. This is an important step, the parties discuss the price, payment terms, terms of transfer of ownership and other important aspects.

Document verification: at this stage, the buyer must confirm the existence and validity of the title to the property and the identity of the seller. This may include:

• Verification of the title documents such as the certificate of title and the contract of sale;
• Verifying the identity of the seller, including his passport, PAN card and other documents;
• Checking for any litigation or restrictions on the property.
• It is important to hire a lawyer to help you with document verification and make sure there are no legal discrepancies.

Payment of taxes: buyers should make sure that the seller has not defaulted on tax payments. This can be done by contacting the municipal authorities and requesting information on the property's tax payments.

Physical inspection: by hiring a surveyor, you can make sure that the dimensions are the same as what is stated in the documents. In addition, a physical inspection can also help identify any problems with the surrounding areas, route to the property, and utilities.

Checking No Objection Certificates: no objection certificates are issued to confirm that the building does not violate the conditions of any agency, organization or institute. It is important to check the No Objection certificates thoroughly before proceeding with the purchase.

RERA Compliance: If the property is under construction, be sure to check if it is registered with RERA (Real Estate Regulatory Authority). RERA regulates real estate developers and protects the rights of buyers.

Closing the deal: Once all the steps have been completed, you can close the deal. This includes signing the sale and purchase agreement, paying the purchase price and transferring the ownership.

Overall, the process of buying a property in India can take anywhere from 6 to 12 months. It is important to be patient and follow each step carefully to ensure that the transaction is safe and legally sound.

Purchasing a home in India involves a number of additional costs, the amount of which depends on the type of property and its location. Irrespective of the category of the property, buyers will inevitably have to pay the following fees:

• Stamp Duty - this tax is levied on any transfer of ownership of real estate. Its rate varies from 4% to 10% of the cost of housing, depending on the region.
• Registration fee - the amount of this payment also varies by state, but on average is about 1% of the price of the property.
• Legal fees - buyers should expect to pay an additional 1.5% of the value of the home for legal fees.

These fees are mandatory and are paid on top of the contract price when buying any property in India, be it an apartment, house, commercial premises or a plot of land. Experienced realtors recommend to find out the current rates in advance and take into account these costs when planning your budget for the purchase of housing.

India offers a wide range of residential real estate options. The most common are apartments and apartments - the favorite choice for the urban population. Their cost varies greatly depending on the location, meterage and class of the residential complex. Budget apartments in the economy segment will cost buyers 2000-6000 rupees per square foot (20-60 thousand rupees per square meter). Medium-price range properties cost Rp 6000-10000 per square foot (Rp 60-100 thousand per square meter). For elite housing premium and luxury segments will have to pay from 10000 rupees per square foot (from 100 thousand rupees per square meter).

For those who prefer a more spacious accommodation, independent houses or villas, popular in suburban areas and small towns, are suitable. Budget options of economy class can be found here at a price from 2 to 8 million rupees. Mid-price segment homes will cost buyers between Rs 8-25 million. For luxury villas of premium class ask from 25 million rupees.

In the commercial real estate market, office space in business districts of major cities is most in demand. Junior and economy segments are available here at prices of 6000-10000 rupees per square foot. Prestigious premium offices are offered from Rs 10000 per square foot.

Retail space is another popular sector of the commercial market. Street retail on busy shopping streets is priced at Rs 25000-100000 per square foot. More budget options can be found in shopping malls - here the prices are Rs. 10000-30000 per square foot.

For production and warehousing needs in the suburban areas of Indian cities are offered premises at prices from 2000 to 6000 rupees per square foot.

If we talk about land plots, in the nearest suburbs of megacities their cost starts from Rs. 2000 and can reach Rs. 10000 per square meter. In smaller cities, the price range for plots is Rs 500-3000 per square meter.

The cost of real estate can vary significantly depending on the state, city and even a particular neighborhood. Prestigious locations in megacities like Mumbai, Delhi or Bangalore are traditionally much more expensive than the Indian average.