US Citizen and OCI buying home in India

S

sapro

Registered Users (C)
Hi All,
I am a naturalized US Citizen and have my OCI issued 2 years back. I am planning to buy an Apartment in India. Can I buy without any issues?

The reason why I am asking is because as an OCI (Overseas Citizenship of India), I read somewhere that there are restrictions in buying certain agricultural properties.

Thanks in advance for the response. Sorry if this is a repeat question.
 
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sapro said:
Hi All,
I am a naturalized US Citizen and have my OCI issued 2 years back. I am planning to buy an Apartment in India. Can I buy without any issues?

The reason why I am asking is because as an OCI (Overseas Citizenship of India), I read somewhere that there are restrictions in buying certain agricultural properties.

Thanks in advance for the response. Sorry if this is a repeat question.
Click to expand...

The attached handbook might be able to answer your question.
 
Thanks akgarg. I read somewhere that we need to get permission from RBI. That is the reason I asked. Let me read this PDF doc.
 
sapro said:
Hi All,
I am a naturalized US Citizen and have my OCI issued 2 years back. I am planning to buy an Apartment in India. Can I buy without any issues?
--------------You can buy residential or commercial property. If you want to sell in future and want to bring the money back then make the payment through check from NRE account. even if you dont plan to sell better pay through NRE account. The reason why I am asking is because as an OCI (Overseas Citizenship of India), I read somewhere that there are restrictions in buying certain agricultural properties.
--------------------- OCI or NRI cant buy agricultural or plantation land. legally.
Thanks in advance for the response. Sorry if this is a repeat question.
Click to expand...
--------------------
 
ginnu said:
--------------You can buy residential or commercial property. If you want to sell in future and want to bring the money back then make the payment through check from NRE account. even if you dont plan to sell better pay through NRE account.
Click to expand...

Hi Ginnu,

Some questions...

Why is it advisable to pay through NRE account? Is it a precaution if GOI asks in future, "Where did the money originally come from?"

Or is there some other reason? Can you please tell?

Thanks.

RN
 
realnewbie said:
Hi Ginnu,

Some questions...

Why is it advisable to pay through NRE account? Is it a precaution if GOI asks in future, "Where did the money originally come from?"

Or is there some other reason? Can you please tell?

Thanks.

RN
Click to expand...

If you pay the money from NRE account then you paid tax on that money in US. Suppose if you buy the property with 100000from NRE account and later you sell the property for 200000 then the100000 you paid from NRE account then you don’t have to pay any tax on 100000 to government of India and on extra earning of 100000 you will pay capital gains. You should talk to CA before you pay the money in India to buy property. When you pay 100000 to buy keep the copy of check or letter from bank that 100000 were paid by XYZ to ABC from NRE account. You should also fill up form (I forget the form number you can check RBI site) and send that form to RBI Bombay with in 90 days of the registration of the property so that RBI has record and in future you can repartee that 100000 without paying any tax. For extra earning of 100000 you can deduct property tax, maintenance tax, and repair. Talk to CA.
 
Is there any Naturalized US Citizen and OCI holder who purchased an Apartment or a Condo in India?

As ginnu has mentioned below, does anybody has the RBI form to filled up and send to RBI Bombay within 90 days of the registration of the property?

I read two PDF files related to NRI handbook and none of them mentions about filling the form and sending to RBI within 90 days of purchase.

Please see Page 11 -- Sec.7B comments (C) or anywhere in the attached PDF file.

Thanks in advance for the response.
 
I bought a house ( independent, not apartment but i don't see the difference from RBI point ) The forms were handled by the real estate agent.
 
sapro said:
Is there any Naturalized US Citizen and OCI holder who purchased an Apartment or a Condo in India?

As ginnu has mentioned below, does anybody has the RBI form to filled up and send to RBI Bombay within 90 days of the registration of the property?

I read two PDF files related to NRI handbook and none of them mentions about filling the form and sending to RBI within 90 days of purchase.

Please see Page 11 -- Sec.7B comments (C) or anywhere in the attached PDF file.

Thanks in advance for the response.
Click to expand...

http://www.indianground.com/nri/nri_section_of_rbi.aspx
Form IPI 7Q10.: Can foreign citizens of Indian origin acquire commercial properties in India?
Ans.: Yes. Under the general permission granted by Reserve Bank properties other than agricultural land/farm house/plantation property can be acquired by foreign citizens of Indian origin provided the purchase consideration is met either out of inward remittances in foreign exchange through normal banking channels or out of funds from the purchasers' NRE/FCNR accounts maintained with banks in India and a declaration is submitted to the Central Office of Reserve Bank in form IPI 7 within a period of 90 days from the date of purchase of the property/final payment of purchase consideration.

****Your Agent or CA may be having the form or google for RBI form IPI 7 .
 
ginnu said:
If you pay the money from NRE account then you paid tax on that money in US. Suppose if you buy the property with 100000from NRE account and later you sell the property for 200000 then the100000 you paid from NRE account then you don’t have to pay any tax on 100000 to government of India and on extra earning of 100000 you will pay capital gains. You should talk to CA before you pay the money in India to buy property. When you pay 100000 to buy keep the copy of check or letter from bank that 100000 were paid by XYZ to ABC from NRE account. You should also fill up form (I forget the form number you can check RBI site) and send that form to RBI Bombay with in 90 days of the registration of the property so that RBI has record and in future you can repartee that 100000 without paying any tax. For extra earning of 100000 you can deduct property tax, maintenance tax, and repair. Talk to CA.
Click to expand...

Ginnu,

Thanks for your response, and also for providing other useful information.

Regards.

RN
 
Hi All,
I am a naturalized US Citizen and have my OCI issued 2 years back as given above. My NRE acct opening is in progress and I want to buy a home in India. My parents are willing to pay about 30% of the home value in Indian rupees to the builder locally. Is that OK? My plan is to pay the remaining 70% mortgage through my NRE acct on a monthly basis or however it may be by obtaining a Home Loan in India.

If I do this, can I still claim ownership of the property once the loan is fully paid off? The reason why I am asking is because I have NOT paid the 100% completely with my own money.

Can somebody who has good knowledge about this please respond?

Thanks.
 
sapro said:
Hi All,
I am a naturalized US Citizen and have my OCI issued 2 years back as given above. My NRE acct opening is in progress and I want to buy a home in India.


My parents are willing to pay about 30% of the home value in Indian rupees to the builder locally. Is that OK?
---------------------I think that is black that builder is asking. your parents can pay.

My plan is to pay the remaining 70% mortgage through my NRE acct on a monthly basis or however it may be by obtaining a Home Loan in India.
--------------------70% should be from your NRE account or from the loan that you are going to take from Bank and loan to bank you should pay from NRE account.If I do this, can I still claim ownership of the property once the loan is fully paid off?
-------------------- If you are going to buy home from builder and the registration of home/flat is registered on your name then the home belongs to you. Once you book the home all the payment receipt from builder should be on your name and agreement from builder should be on your name. Registration is done by sub-registrar by paying registration and stamp duty.
The reason why I am asking is because I have NOT paid the 100% completely with my own money.

Can somebody who has good knowledge about this please respond?

Thanks.
Click to expand...
------------------------------
 
Thank you ginnu. If I take a Joint Home Loan in India along with my wife who is a GC holder (not a US citizen yet) to buy this apartment in India,can I still claim ownership of the home if I buy the home jointly along with my wife?

Thanks in advance.
 
sapro said:
Thank you ginnu. If I take a Joint Home Loan in India along with my wife who is a GC holder (not a US citizen yet) to buy this apartment in India,can I still claim ownership of the home if I buy the home jointly along with my wife?

------------------if you take Joint home loan then bank will need Agreement of sale on both the names and registration of flat/home should be on both names.

Thanks in advance.
Click to expand...
--------------- You keep on posting in instalments. dont know if you want to buy a plot or Flat in under construction building. if that is under construction
by builder then will need all the legal papers from the builder to make sure that builder has permission to build the building and will need building plan sanction of local municipality, Commencement certificate, architect map and bank will verify all the papers from builder to make sure builder will complete the building or has all the Government permissions and will dig in past history of builder. Bank dont want to take any risk and that is good for you.

in what city, state you are buying under construction??
 
Thanks for your response ginnu.
I am trying to buy an apartment with 3 floors (4 homes in each floor). City: Chennai ; State: Tamil Nadu.
 
sapro said:
Thanks for your response ginnu.
I am trying to buy an apartment with 3 floors (4 homes in each floor). City: Chennai ; State: Tamil Nadu.
Click to expand...

You are buying 3 floors and 4flats on each floor. It means you are buying 12 flats/homes in one building.
I don’t know the rates for Chennai but it seems to be big amount to buy 12 flats. If one flat is about 1000SQ feet then 12 flats are going to be 12000 SQ Feet.
Bank is going to verify your and your wife income if you are taking loan from Bank and some banks give loan only for 1 or 2 flats.
As you said earlier that 30% will be from your father or parents it seems to me that builder is asking that 30%as black. For example if the cost of property is 100000 and your father gives builder 30000 then you are only going to pay 70000 from NRE account and for bank the cost of flat is going to be only 70000. Bank will give loan for 70000 only and bank will ask your share and bank may give 75% or 80% loan for 70000 only. The stamp duty will be for 70000 or according to value of property according to stamp duty in Chennai and registration fee will be extra and parking charges may be extra .

Your father may not be able to get the property registered on your and your wife name if you gave power of attorney that was signed by you before Notary Public in India. If you gave the power of attorney and that power of attorney was registered with SUB-Registrar then that power of attorney is valid for registration as that power of attorney has your photograph and your father photogaph. If you and your wife send power of attorney from US and singed by Indian consulate or Indian embassy then that power of attorney is not valid till the stamp department stamp the power of attorney in India that is called adjudication. you and your wife will also need PAN Card(NRI can get PAN Card and they mail the PAN card to US and charge about 800 rupees, If PAN Card is made in India with India address then one has to pay less than 100 RS). At the time of Registration Sub-Registrar will ask your and your wife PAN Card number if the value of property is above 5 Lac.
Before buying the property from builder hire a lawyer he may charge 5000 or 7000 and he will get you “search report” of that property and lawyer will find if the land belongs to developer and has not been mortgaged and has all the government sanctions and he can also draft agreement when pay the booking amount to builder as builder may have not clear clause in agreement. Your lawyer can ask the builder to add the clause that is in your interest and get that agreement legally registered with register so that it becomes binding agreement for builder and you. Agreement will also have clauses or steps of installments to be paid to builder according to construction of the building.
 
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