Inherent Investment Potential With a population approaching the billion marks by the turn of the century, real estate in the Indian sub-continent has obvious potential for growth. While the idyllic Indian village life has an emotional appeal, the discerning investor knows the importance of easy accessibility to schools, hospitals, shops, offices, entertainment centers and airports. A real estate investment has far higher value in the major towns and cities of India. A wise investment here can benefit from the historic movement of population to urban centers.
A process of economic liberalization has also encouraged NRI investments into real estate with the advantage of repatriation of the capital invested and even the rental proceeds under the circumstances prescribed by RBI. Reserve Bank has granted general permission to certain financial institutions providing housing finance e.g. HDFC, LIC Housing Finance Ltd., etc., and authorized dealers to grant housing loans to non-resident Indian nationals for acquisition of a house/flat for self-occupation subject to certain conditions. The purpose of the loan, margin money and the quantum of loan will be at par with those applicable to housing loans to residents.
Repayment of loan should be made within a period not exceeding 15 years out of inward remittance or out of funds held in the investor’s NRE / FCNR / NRO accounts. Reserve Bank permits Indian firms/companies to grant housing loans to their employees deputed abroad and holding Indian passports subject to certain conditions. Reserve Bank has granted general permission to foreign citizen of Indian Origin to acquire or dispose of properties up to two houses by way of gift from or to a relative who may be an Indian Citizen or a person of Indian origin whether resident in India or not, subject to compliance with applicable tax laws. Reserve Bank has granted general permission for letting out any immovable property in India. The rental income or proceeds of any investment of such income are eligible for repatriation. Reserve Bank has granted general permission for sale of such property.