Introduction
The love for one's motherland is a sentiment deeply ingrained in the hearts of NRIs (Non-Residential Indians). Although many NRIs sell their personal and ancestral properties to settle abroad, their attachment to their homeland often grows over time. This nostalgia and emotional connection drive them to consider investing in a property in India, which they can use as a home during their visits. Additionally, NRIs are also keen on exploring investment opportunities that offer high returns. However, choosing the right property and managing it remotely can be challenging, which is why the services of a Property Management Consultant may be required.
Moreover, NRIs may also consider purchasing a 2 BHK flat in Thane for their family members or parents residing in India. This not only provides a comfortable place for their loved ones to stay but also serves as accommodation for the NRIs when they visit. It's important to note that NRIs do not require permission to buy land in India, but there are restrictions on purchasing agricultural plots, farms, or plantations. In this guide, we will explore the benefits of investing in under construction projects in Thane and provide a checklist of considerations for NRIs planning to make such investments.
1. Benefits of Investing in Under Construction Projects in Thane:
Investing in under construction projects in Thane offers the potential for regular rental income. With the rising demand for housing in Thane due to its proximity to business centers and improving infrastructure, NRIs can benefit from a steady flow of rental returns.
2. Equal Treatment by the Government:
The Indian government recognizes NRI/OCI/PIO investments on par with those of residents. This provides NRIs with a level playing field when it comes to property ownership and associated rights.
3. Limited Availability of NRI-Focused Projects:
Only a few developers cater specifically to NRIs, offering projects tailored to their requirements. These projects often come with additional benefits and services to attract NRI investors.
4. High-Return Investment Opportunity:
Thane is experiencing an increased demand for office spaces from multinational corporations and startups. This creates a lucrative investment opportunity for NRIs looking for high returns. The recent policy reforms and economic growth in India, coupled with the depreciation of the Indian rupee, further enhance the potential returns on investments for foreign investors.
5. Emotional Connection and Future Plans:
Many NRIs, driven by an emotional connection to their homeland or the desire to return in the future, choose to invest in India. Investing in under construction projects in Thane allows them to fulfill this emotional quotient while also benefiting their relatives or future plans of returning to India.
Considerations Before Buying Under Construction Projects in Thane:
1. Property Type:
NRIs are allowed to purchase both residential and commercial properties in India, except for agricultural land, farmhouses, or plantation estates. If an NRI wishes to buy agricultural land, authorization from the Reserve Bank of India is required. Additionally, NRIs can purchase multiple properties in India without any restrictions. In case an NRI is unable to travel to India for the property purchase, they can appoint a legal power of attorney to act on their behalf.
2. Taxation and Benefits:
When an NRI acquires a property in India, tax deducted at source (TDS) is calculated at rates of 20.6% for long-term capital gains and 30.95% for short-term capital gains. However, the final taxation rate for NRIs is the same as that for resident Indians. If an NRI falls into a lower tax bracket, they can claim a TDS refund by filing their income tax return.
NRIs are eligible for many tax breaks available to Indian buyers. If they sell the property within three years, the proceeds will be taxed as short-term capital gains. However, if they sell the property after three years, they can reinvest the money in another under construction property in Thane to reduce the long-term capital gains tax liability.
3. Power of Attorney (PoA):
It is recommended for NRIs to grant a power of attorney in the name of the builder or a trusted associate when purchasing under construction projects in Thane. This helps safeguard their investment during the development phase. Seeking assistance from a lawyer in this matter ensures the validity and authenticity of the power of attorney document.
As NRIs reside abroad, they have the option of granting a power of attorney to their friends or family members to complete the property acquisition process in India. The powers granted can be general or specific, depending on the rights and responsibilities the NRI wishes to delegate.
4. Finance and Funding:
When purchasing new projects in Thane, NRIs must use Indian currency and transact through local banks. NRIs planning to buy property in India must have an NRI account with an authorized Indian bank. Documentation and eligibility requirements vary for NRIs seeking property loans. Financial institutions offer NRI home loan plans, but NRIs are typically required to invest at least 20% of the property's value from their own funds. The remaining 80% can be borrowed from the bank.
As all transactions must be conducted through Indian banks, NRIs must use their NRO/NRE accounts for remittances. They can provide post-dated cheques or use Electronic Clearance Service (ECS) from their NRO, NRE, or FCNR accounts.
Before approaching a bank for funding, NRIs should ensure that their documentation is in order and seek professional legal advice. They should obtain a certificate from the seller confirming that the property is free from liens. Additionally, if the property is jointly owned or inherited, the title deed must be clear of any disputes or claims. NRIs must also ensure that there are no outstanding debts or dues to any authorities.
5. Registration Documents:
To register the sale deed, NRIs need to provide proof of their current address, such as utility bills, along with passport-sized photographs. Identification proof documents, such as passports and PAN cards, are also required.
The following documents are necessary for NRIs, PIOs, or OCIs purchasing under construction projects in Thane:
- NRI Passport
- Copy of Visa
- Passport Size Photographs
- PAN Card (Permanent Account Number)
- Address Proof
- OCI or PIO Card (Person of Indian Origin)
Additional documentation for salaried individuals includes:
- Copy of the appointment letter
- Bank statements for the preceding six months
Additional documentation for self-employed individuals includes:
- Income proof
- Copy of the business's certificate of incorporation
- Deed of partnership (if applicable)
- Bank statements in the applicant's name for the last six months
- Bank statements for the preceding six months in the business's name
- Proof of office address
Conclusion
Investing in under construction projects in Thane provides NRIs with an excellent opportunity to fulfill their emotional connection to India while potentially gaining high returns on their investments. By following the considerations outlined in this guide, NRIs can navigate the property buying process smoothly. It is crucial to choose a power of attorney wisely, ensure compliance with RERA regulations, conduct thorough research, and seek professional advice when necessary. By doing so, NRIs can make informed decisions and maximize their investment potential in under construction projects in Thane.
Also read: Unlock the Secrets to Finding Your Dream Property in Thane: 15 Key Factors to Consider
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