Why NRIs are Investing in Real Estate
NRIs investing in Indian assets is a common thing in the Indian economy. And NRIs investing in real estate has been one of the most popular ways of investment. Non-resident Indians purchase a property primarily to invest in or for renting it out. Anyone with an Indian passport can buy property in India.
Because of the pandemic and the lockdown imposed by it, real estate prices in top cities in India have decreased up to 9%. And the property searches have dipped 27% in the 2020-2021 financial year. The pandemic also forced many NRIs back to India, leaving them to buy a home for themselves. There is a lot of optimism among NRI buyers with introducing the Real Estate Regulation Act (RERA), which safeguards the interests of buyers by creating a considerable grievance redressal system. Builders can no longer siphon away funds from an announced project and will be answerable for delays, misleading advertisements and poor construction quality.
Investing in real estate can give NRIs a plethora of opportunities. It can give NRIs the benefit of high returns with low capital investment. It can provide them with a secure place to live if they decide to settle in India after retirement. By introducing RERA or The Real Estate (Regulation and Development) Act to the real estate industry by the Indian government, it has ensured transparency and accountability. It has become easier for NRIs to invest in real estate.
NRIs can purchase many properties in both the residential and commercial sectors. Land in the agriculture sector is out of bounds, like farmhouses and plantation land, unless they inherited it.
Low Interest Rates on Home Loans
If you are thinking of taking a home loan, there is a very low-interest rate on home loans right now. Banks are offering interest rates as low as 6.5% on home loans. NRIs can avail loans of upto 80% on the property value. It is better if you use the NRE (non-residential external) account when applying for a loan. The NRE account will be beneficial as this will allow you to repatriate the capital invested in the property when you sell it off. NRIs can also directly transfer the money to the seller’s bank account with no middle-man.
Tax Treatment of the Gains
NRIs are liable to pay taxes on the rising capital gains in India. If you’ve owned the property for over 3 years, it is treated as a long-term capital asset and gets an indexation benefit with taxation at 20%. The income tax also allows some tax deductions under section 80C to 80TTA. NRIs can use this to reduce their tax burden, too.
The pandemic has opened a lot of promising opportunities for NRIs to invest in real estate in India. Reduced pricing of properties and low-interest rates on home loans can be very beneficial for NRIs to consider investing in homes.
Ark Real Estate & Infra offers some of the best luxury homes and properties for both industrial and residential use. Projects in prime locations in major cities like Hyderabad and Bengaluru provide access to the best the cities can offer. With best in class amenities, Ark Real Estate & Infra offers quality and standard of living which will attract non-residential and residential Indians alike.