In the last few years, Hyderabad has flourished in terms of real estate, commerce, retail and infrastructure. Undoubtedly, it is one of the most preferred Indian cities to stay in whether you are working for one of the top MNCs or want to set up your own business. According to a report by The Economic Times, in between 2013-2014 and 2017, the real estate business in Hyderabad has boomed while the other metro cities have faced a saturation in this.
What is driving a real estate boom in Hyderabad?
Hyderabad is indeed a global city with residents staying here from all over the world. The Government has pushed the bar taking initiatives and dynamic measures to implement a variety of laws that improve the ease of doing business. The TS-iPASS (‘Telangana State Industrial Project Approval and Self-Certification System’) has been passed by the Government to introduce a business-friendly environment in Hyderabad that will attract many world-class companies to choose Hyderabad as an investment destination. Global blue-chip companies like Google, Amazon, Deloitte, Capgemini, Microsoft, Apple, Accenture, Kantar and Indian heavyweights like TCS, Infosys and Wipro have their base in Hyderabad that they are constantly expanding. Employees from all over the world are migrating to Hyderabad on a regular basis and due to the city’s infrastructure, rich culture, standard of living and a happening social life; Hyderabad is considered as one of the best cities to live in.
Also Read: Factors to consider when buying a property
Due to these reasons and many, Hyderabad is gradually emerging as the top choice for realty investment by locals and NRIs alike. A research survey has shown that in the past couple of years more NRIs are lining up to buy properties in and around the city. The city has also experienced a real estate boom leaving behind, Delhi, Mumbai or Bangalore.
What guidelines should NRIs follow when buying a property in Hyderabad?
Real Estate properties in Hyderabad are in equally higher demand by the NRIs as by the locals. Even if the NRIs are not looking for settling down in Hyderabad, they might want to buy a property for investment purpose.
However, NRIs can invest in any realty sector except for farmhouses, agricultural lands and plantations. They can even get a home loan for the purpose. It is called an NRI Home loan. There are no special guidelines that NRIs have to follow to buy a property in Hyderabad. It is mostly the same as in the rest of India:
1. Regulatory Act
The RBI has made it easy for NRIs to invest in real estate in India. If you have an Indian passport, you eligible to make a real estate investment (residential or commercial) without any prior permissions. The NRI property investment rules are made easy to attract more foreign investment.
2. Documents required for NRI to buy property
Buying property in India has been made easy for the NRIs as they are not required to show too many documents. The essential required documents are:
- A valid passport
- PAN Card
- Address Proof
- A recent photograph
3. Can NRIs buy property in India without an Aadhar Card?
With the Aadhar Card gaining importance and being an essential proof for all legal and government documentation work, it is often a question among NRIs whether it is mandatory for them to have an Aadhar card in case they want to buy a property in India.
As per the Aadhaar Act, 2016, all non-residents are not entitled to an Aadhar card and hence they can give it a pass when buying a property in India. NRIs need to submit only the above-mentioned documents.
4. Type of property for investment
An NRI can invest in any type of property, be it an apartment in a gated community, a villa, an independent house, a commercial complex as per their need. However, there is a restriction to make foreign investment in agricultural lands, plantations or a farmhouse. But such properties can be allowed only if given as a gift to the NRI.
Also Read: Advantages of living in a Gated Community
5. Financial Stipulations, Transactions and Fundings
- You must be financially capable as an NRI when planning to buy a property in India. Most banks are strict that an NRI’s income must be $2000 (1,41,960.00 INR) per month. However, the income limit varies from bank to bank.
- Transactions must be carried out through Indian Banking channels and the loan amount should be repaid through Non-Resident External (NRE) or Non-Resident Ordinary (NRO) account cheques. You can also issue a post-dated cheque or ECS through your NRE/NRO/FCNR (Foreign Currency Non-Resident) account.
- If you are looking for investment funding in the form of loans, make sure that you have clean paperwork. However, you must pay 20% of your investment value from your own savings and can avail the rest 80% as a loan. But you are allowed to take a maximum of 80% funding only.
- Before applying for a bank loan, all your paperwork must be clean and verified by a lawyer. Make sure to take a no-dues certificate from your seller. Also, ensure that you have no dues or pending bills with any authorities.
6. Tenure of Loan
An NRI Home Loan term varies from that of a resident Indian. Maximum tenure for a Home Loan or Home Improvement loan is 20 years while Land loan or Home equity loan is 10 years. However, the maximum loan tenure varies from one bank to another.
7. Power of Attorney
Being an NRI real estate property buyer, if you are purchasing an under-construction property, you must have a trusted associate or a confidante whom you must give the power of attorney to. Alternatively, you can also give power of attorney to your builder. So make sure the paper works are done accordingly and words chosen appropriately in the presence of a lawyer so as to avoid any chances of forgery and keep your investment safe.
8. Tax Implications for NRIs buying property
NRIs purchasing a property can claim tax benefits upto 1 Lakh under section 80C of the Income Tax Act, 1961. If you are selling the property within three years of purchasing, it is considered a short-term capital gain and the earnings from the selling are taxable. But if you are selling it after three years, you can benefit by reducing the long-term capital gains and investing in another property.
There are a number of reputed builders in Hyderabad who assist the NRI customers with the purchase, paper works like agreement documents or sales deed and the registration process. Make sure you check with some of the best builders in Hyderabad before zeroing in on a real estate project.