Are NRIs allowed to buy and own properties?
A good and viable question that has been going on rounds here. The control for this is under the leash of RBI. They have certain types of properties that anyone can buy while the rest requires mandates. There is the Foreign Exchange Management Act affectionately called as FEMA, which has all the guidelines regarding the type of property ownership for an NRI. NRIs and POIs (Person of Indian Origins) will fall under the FEMA act.
The types of properties that an NRI can invest are unfortunately limited to residential and commercial buildings. Though there is no upper limit in the number one can own. The NRI can buy as many residential or commercial buildings as they wish. The NRI need not seek any special permission nor are they required to communicate beforehand regarding the purchase. The RBI and income tax law states these guidelines. Even if they can’t come to India, all legal formalities can be executed using a valid power of attorney. But an NRI is not allowed to purchase agricultural and plantation properties in India. They cannot own farmhouses and if anyone wished to do so must approach the RBI. The RBI will give the nod after a detailed analysis. They are also allowed for joint ownerships with other Indians or NRI except for the properties they are not allowed to have ownership of. But what if I become an NRI later? How will my status change? Well they can also hold the ownership of properties that they have bought before becoming an NRI including farmlands, though they can’t own any agricultural land after their status changes to NRI. An NRI is also allowed to sell and gift his property as he pleases to any resident in India. But any of the previous farmland that they own under the provision mentioned above cannot be transferred.
You could also visit our other blog on NRI property purchase in India at https://jainhousing.com/nri-buying-property-in-india/