A guide to purchasing property in India

Planning to buy a home in India? Here's everything to know about the Indian property market and how you can make your purchase.

Xe Consumer APAC

19 de julho de 20216 min read

Purchasing a property in India

Buying a house is a dream for many people, but the process is not a very simple one. Whether you’re moving to India from abroad or you’re helping relatives buy a home, there are numerous factors to consider before buying a property in India.

We’ve put together a guide that will help you buy a house in India as stress-free as possible. Check out the cost of various properties in India, the legal requirements for buying a property there, and learn everything about the purchase procedure.

Can you buy property in India as an expat?

The first thing you need to know about purchasing property in India is that foreign nationals of non-Indian origin who live outside India are not allowed to buy immovable property in India. Foreign nationals who can’t satisfy the residency requirement of 183 days in a financial year can’t buy property in India.

However, this doesn’t mean that you can’t purchase property at all as a foreigner. If you are a legal resident in India (i.e., you live there legally for more than 183 days a year), you can get the approval of the Royal Bank of India to purchase a property.

This is because legal residents in India get rights just like the other residents. Keep in mind that this doesn’t apply to citizens of all countries, with Afghanistan, Pakistan, Sri Lanka, Bangladesh, China, Nepal, Iran and Bhutan being excluded.

What are the costs of properties in India?

The median price of a property in a metro area in India is Rs15 lakh (approximately $20,000 USD). If you’re looking to purchase a house in an underdeveloped rural area, you can be looking at prices as low as Rs2 lakh (approximately $2,500 USD).

Real estate in India is regarded as expensive when taking into account the price to income ratio. However, if you’re an expat, you may find that property in India can be an excellent investment. With the Indian economy showing a healthy growth rate in recent years, the real estate investment by foreigners has been increasing gradually.

How can I find a property to purchase in India?

There are numerous property websites you can choose from when searching for property to buy in India. IndiaProperty.com is one of the biggest of them and it makes it easy to search for the right property thanks to numerous filters that range from price and location to number of bedrooms.

Another great website where you can find thousands of residential and commercial properties in India is 99 Acres. On this website, you can browse properties by type, location, price, and more. It’s also easy to get in touch with the owner or the real estate agent managing the property to get the process started.

What are the legal requirements for buying property as an expat in India?

As mentioned above, you need to be an Indian citizen or resident in order to be able to purchase property in India. If you are a foreign national of Indian origin, though, which refers to a person whose parents or grandparents were born in India, you can also purchase property.

There are no other legal requirements to buy a property in India, as any person who meets the residency criteria and is over 18 years old can purchase property in India. There’s also no limit on the number of properties you can own in India.

What is the process of buying a property in India?

Like in many other countries, the process of buying a property in India is a complex one. Here is an overview of the main steps involved in purchasing Indian property:

  1. Introduction and verbal agreement — it’s customary for the buyer and seller to meet and agree on the terms, conditions and timelines of a sale.

  2. Document verification — the buyer needs to confirm the existence and validity of a property title and the identity of the seller. At this point, it’s important to hire a solicitor to make sure there are no legal discrepancies and to help you with the next steps.

  3. Payment of taxes — buyers should verify that the seller has not defaulted on tax payments. This can be done by contacting the municipal authorities.

  4. Physical survey — by hiring a surveyor to examine the property, you can make sure the measurements match the ones in the documents. Moreover, a physical survey can also help in identifying any issues related to surrounding areas, the route to the site and utilities.

  5. Examination of the no objection certificates — no objection certificates are issued to certify that a building doesn't breach the terms and conditions of any agency, organization, or institute. It's essential to check the no objection certificates carefully before proceeding with the purchase.

  6. Compliance under RERA — if the property is under construction, make sure you check whether it’s registered under RERA.

What are the costs associated with buying property in India?

The buying costs vary according to the type of property you intend to purchase in India. Here are the unavoidable costs that you’ll have to pay no matter what type of property you’re purchasing in India.

  • Stamp Duty — The rate varies from 4% to 10% according to the location of the property and is payable on all property transfers.

  • Registration Fee — The amount of this fee also varies depending on the location of the property, but you should expect it to be approximately 1% of the property value.

  • Legal Fees — You should expect to pay approximately 1.5% of the property value in legal fees.

How to send money to India for a property purchase

For a larger purchase (such as a property purchase), an international money transfer is the best way to make payments.

With Xe money transfers to India, you can easily send money in Indian Rupees to an escrow account from a bank account back home if you don’t have an Indian account.

International money transfers are quicker and more cost-effective than making payments to pay for property via your bank or with credit cards. With Xe, you can avoid not only bank fees but also foreign credit card transaction fees. What’s even better, you’ll get access to some of the most competitive exchange rates while being able to make transfers online 24/7—and Xe’s transfers will reach India within just a few minutes of confirmation.

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Buying property in India — the bottom line

Buying a property in India is exciting, but it’s important to do thorough research about the financial, legal, and practical implications of the property purchase.

To save money on your international payments for purchasing property in India, consider using Xe to send money to India at a competitive exchange rate. You can easily see the current exchange rates using our free currency converter and then move to complete the transaction, which only takes a couple of minutes in the app and on the site.

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