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Good News for NRIs Investing in the Indian Property Market

5 reforms for nri real estate investment
16 Jun, 2017, 05:30AM UTC by Jaydip Mehta

Having your roots firmly anchored back home offers you peace of mind and a sense of affinity. The Indian property market is alluring for those who intend to have their roots in the country. Let us gauge few reasons, you want to invest in properties in India:

Your reasons could be more, but your apprehensions before investing would be no less.

Some of the common concerns that you may have are:

  • Lack of information about the seller and the current market
  • The opaque nature of the business dealings
  • The absence of the concept of due diligence
  • No legal recourse and ill-timed completion and delivery of projects
  • Extremely cumbersome follow-up procedure with the developers in case of an unfinished project

These concerns turn out to be the most demotivating factors holding you back from investing in this country. You might be asking what the Government has done to address these concerns. Is it a good decision to make an investment after the policy changes such as RERA, GST, etc.?

 

5 good news for NRI investment in property

 

To answer all your questions, we have one good news. The government has largely addressed almost all the above-mentioned concerns with the help of key policy changes in 2016. To all NRI investors who have a close eye on the Indian real estate sector, you can now expect to have a concern-free dealing after the implementation of policy changes in RERA, GST, REIT, and the Benami Transaction Act.

Read More: Future of Indian real estate

RERA makes sure that regulations are implemented in this highly unregulated market. You as a buyer will be protected and offered higher transparency. This act will also put accountability on the developers when it comes to financial disclosure and on-time project development. They will also be responsible for good corporate governance practices.

GST  The biggest tax reform in Indian history, aims to eliminate the difference existing in indirect taxation across the different states of India. This reform promises to provide higher clarity on tax-credits for RE transaction. In addition, the allowance of input credit is all set to reduce the property prices.

The Benami Act brings forth an operative system allowing the prohibition of all Benami transactions. The amended act empowers the identified authorities to temporarily attach all Benami properties. The authorities can eventually confiscate those properties. Moreover, if anyone is declared guilty of a Benami transaction by a competent court, the person shall be subject to severe imprisonment for upto 7 years. The person may also be liable to pay a fine amounting to about 25% of the fair market value of the property in question.

REIT comes with the benefit of smaller budget investments. REIT opens up a platform for investors, bigger and smaller budget, to make safe and easy investments. An investor can now start with a nominal sum of Rs. 2 lakh only. This is bound to have a huge impact on the real estate market of India.

Demonetization left a deep impact on the liquidity. It definitely opened up avenues for NRI investors to negotiate prices in the real estate sector during this liquidity crunch.

Read More: Things to know before investing in Properties in India

All this put together, this is definitely the best time to invest in your country. With an upsurge in investment sentiment due to the fresh policies introduced by the Government of India, NRIs must look forward to a more transparent, simplified and regulated property deal in the country. The assuasive FEMA policies and relaxed RBI regulations in terms of buying and selling property by NRIs, it is time to drive your interest in the property market of India.

Read more why you need a consultant for property dealing in India

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