Empire Realty brings to you the convenience of availing housing loans. We have collaborated with esteemed institutions like ICICI Bank, HDFC, Axis, State Bank of India, etc. to make processing of loans easier for you.
Frequently Asked Questions
Acquisition of Immovable Property in India through purchase/ gift/ inheritance.
Who can purchase immovable property in India?
Under the general permission available, the following categories can purchase immovable property in India:
i) Non-Resident Indian (NRI)
ii) Person of Indian Origin (PIO)
The general permission, however, covers only purchase of residential and commercial property and is not available for purchase of agricultural land/ plantation property/ farm house in India.
Can NRI/PIO acquire agricultural land/ plantation property/ farm house in India?
Are any documents required to be filed with the Reserve Bank after the purchase?
No. An NRI / PIO who has purchased residential/ commercial property under general permission, is not required to file any documents/reports with the Reserve Bank.
How many residential / commercial properties can NRI/ PIO purchase under the general permission?
There are no restrictions on the number of residential/ commercial properties that can be purchased
Can a foreign national of non-Indian origin be a second holder to immovable property purchased by NRI / PIO?
Can a foreign national of non-Indian origin resident outside India purchase immovable property in India?
Can a foreign national who is a person resident in India purchase immovable property in India?
Yes. A foreign national resident in India who is a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan would require prior approval of the Reserve Bank.
Can a NRI/PIO acquire immovable property in India by way of gift? Can a foreign national acquire immovable property in India by way of gift?
(a) Yes, NRIs and PIOs can freely acquire immovable property by way of gift either from
i) a person resident in India; or
ii) an NRI; or
iii) a PIO.
However, the property can only be commercial or residential in nature. Agricultural land / plantation property/ farm house in India cannot be acquired by way of gift. (b) A foreign national of non-Indian origin resident outside India cannot acquire any immovable property in India by way of gift.
From whom can a non-resident person inherit immovable property?
A person resident outside India (i.e. NRI or PIO or foreign national of non-Indian origin) can inherit immovable property from
(a) a person resident in India
(b) a person resident outside India
However, the person from whom the property is inherited should have acquired the same in accordance with the foreign exchange law in force or FEMA regulations, applicable at the time of acquisition of the property.
Can a non-resident inherit immovable property in India?
Yes, a person resident outside India i.e.
i) an NRI;
ii) a PIO; and
iii) a foreign national of non-Indian origin can inherit and hold immovable property in India from a person who was resident in India.
However, a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan should seek prior approval of the Reserve Bank for inheriting immovable property in India.
Transfer of immovable property in India
Transfer by way of sale Can an NRI/ PIO/foreign national sell his residential / commercial property?
(a) NRI can sell property in India to
i) a person resident in India; or
ii) an NRI; or
(b) PIO can sell property in India to
i) a person resident in India; or
ii) an NRI; or
iii) a PIO – with the prior approval of the Reserve Bank
(c) Foreign national of non-Indian origin including a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan can sell property in India with prior approval of the Reserve Bank to
i) a person resident in India
ii) an NRI
iii) a PIO
Can a non-resident owning/ holding an agricultural land/ a plantation property/ a farm house in India sell the said property?
(a) NRI/ PIO may sell agricultural land/ plantation property/farm house to a person resident in India who is a citizen of India.
(b) Foreign national of non-Indian origin resident outside India would need prior approval of the Reserve Bank to sell agricultural land/plantation property/ farm house in India.
Transfer by way of gift Can a non-resident gift his residential/ commercial property?
(a) NRI/ PIO may gift residential/ commercial property to –
(i) person resident in India or
(ii) an NRI or
(b) A foreign national of non-Indian origin requires the prior approval of the Reserve Bank for gifting the residential/ commercial property.
Can an NRI/PIO/foreign national holding an agricultural land/a plantation property/farm house in India, gift the same?
(a) NRI/ PIO can gift an agricultural land/ a plantation property/ a farm house in India only to a person resident in India who is a citizen of India.
(b) A foreign national of non-Indian origin would require the prior approval of the Reserve Bank to gift an agricultural land/ a plantation property/ a farm house in India.
Transfer through mortgage. Can residential/ commercial property be mortgaged by NRI/ PIO?
i) NRI/ PIO can mortgage a residential/ commercial property to:
(a) An Authorised Dealer/ the housing finance institution in India without the approval of Reserve Bank
(b) A bank abroad, with the prior approval of the Reserve Bank.
ii) A foreign national of non-Indian origin can mortgage a residential/ commercial property only with prior approval of the Reserve Bank.
iii) A foreign company which has established a Branch Office or other place of business in accordance with FERA/FEMA regulations has general permission to mortgage the property with an Authorised Dealer in India.
Mode of payment for purchase of immovable property in India.
How can an NRI/ PIO make payment for purchase of residential/ commercial property in India?
Payment can be made by NRI/ PIO out of:
(a) funds remitted to India through normal banking channels or
(b) funds held in NRE/ FCNR (B)/ NRO account maintained in India
No payment can be made either by traveller’s cheque or by foreign currency notes or by other mode except those specifically mentioned above.
Is repatriation of application money for booking of flat/ payment made to the builder by NRI/ PIO allowed when the flat or plot is not allotted or the booking/ contract is cancelled?
The Authorised Dealers can allow NRIs / PIOs to credit refund of application/ earnest money/ purchase consideration made by the house building agencies/ seller on account of non-allotment of flat/ plot/ cancellation of bookings/ deals for purchase of residential, commercial property, together with interest, if any, net of income tax payable thereon, to NRE/FCNR account, provided, the original payment was made out of NRE/FCNR account of the account holder or remittance from outside India through normal banking channels and the Authorised Dealer is satisfied about the genuineness of the transaction.
Can NRI/ PIO avail of loan from an authorised dealer for acquiring flat/ house in India for his own residential use against the security of funds held in his NRE Fixed Deposit account/ FCNR (B) account? How the loan can be repaid?
Yes, such loans are permitted subject to the terms and conditions laid down in Schedules 1 and 2 to the Notification No. FEMA 5/2000-RB dated May 3, 2000 viz. Foreign Exchange Management (Deposit) Regulations, 2000, as amended from time to time. Banks cannot grant fresh loans or renew existing loans in excess of Rs. 100 lakhs against NRE and FCNR (B) deposits, either to the depositors or to third parties. The banks should also not undertake artificial slicing of the loan amount to circumvent the ceiling of Rs. 100 lakh.
Such loans can be repaid in the following manner:
(a) by way of inward remittance through normal banking channel or
(b) by debit to the NRE/ FCNR (B)/ NRO account of the NRI/ PIO or
(c) out of rental income from such property
(d) by the borrower’s close relatives, as defined in section 6 of the Companies Act, 1956, through their account in India by crediting the borrower’s loan account.
Can NRI/ PIO, avail of housing loan in Rupees from an Authorised Dealer or a Housing Finance Institution in India approved by the National Housing Bank for purchase of residential accommodation or for the purpose of repairs / renovation / improvement of residential accommodation? How can such loan be repaid?
Yes, NRI/PIO can avail of housing loan in Rupees from an Authorised Dealer or a Housing Finance Institution Such a loan can be repaid (a) by way of inward remittance through normal banking channel or (b) by debit to the NRE/ FCNR (B)/ NRO account of the NRI/ PIO or (c) out of rental income from such property; or (d) by the borrower’s close relatives, as defined in section 6 of the Companies Act, 1956, through their account in India by crediting the borrower’s loan account.
Can NRI/PIO avail of housing loan in Rupees from his employer in India?
(i) The loan shall be granted only for personal purposes including purchase of housing property in India;
(ii) The loan shall be granted in accordance with the lender’s Staff Welfare Scheme/Staff Housing Loan Scheme and subject to other terms and conditions applicable to its staff resident in India;
(iii) The lender shall credit the loan amount to the borrower’s NRO account in India or shall ensure credit to such account by specific indication on the payment instrument;
(iv) The loan agreement shall specify that the repayment of loan shall be by way of remittance from outside India or by debit to NRE/NRO/FCNR Account of the borrower and the lender shall not accept repayment by any other means.
Repatriation of sale proceeds of residential / commercial property purchased by NRI / PIO
Can NRI / PIO repatriate outside India the sale proceeds of immovable property held in India?
(a) In the event of sale of immovable property other than agricultural land / farm house / plantation property in India by a NRI / PIO, the Authorised Dealer may allow repatriation of the sale proceeds outside India.
(b) in case the property is acquired out of Rupee resources and/or the loan is repaid by close relatives in India (as defined in Section 6 of the Companies Act, 1956), the amount can be credited to the NRO account of the NRI/PIO. The amount of capital gains, if any, arising out of sale of the property can also be credited to the NRO account.
Can an NRI/PIO repatriate the proceeds in case the sale proceeds were deposited in the NRO account?
NRI/PIO may repatriate up to USD one million per financial year (April-March) from their NRO account which would also include the sale proceeds of immovable property. There is no lock in period for sale of immovable property and repatriation of sale proceeds outside India.
If a Rupee loan was taken by the NRI/ PIO from an Authorised Dealer or a Housing Finance Institution for purchase of residential property can the NRI / PIO repatriate the sale proceeds of such property?
Yes, Authorised Dealers have been authorised to allow repatriation of sale proceeds of residential accommodation purchased by NRIs/ PIOs out of funds raised by them by way of loans from the authorised dealers/ housing finance institutions to the extent such loan/s repaid by them are out of the foreign inward remittances received through normal banking channel or by debit to their NRE/FCNR accounts. The balance amount, if any, can be credited to their NRO account and the NRI/PIO may repatriate up to USD one million per financial year (April-March) subject to payment of applicable taxes from their NRO account balances which would also include the sale proceeds of the immovable property.
If the immovable property was acquired by way of gift by the NRI/PIO; can he repatriate abroad the funds from sale of such property?
The sale proceeds of immovable property acquired by way of gift should be credited to NRO account only. From the balance in the NRO account, NRI/PIO may remit up to USD one million, per financial year, subject to the satisfaction of Authorised Dealer and payment of applicable taxes.
If the immovable property was received as inheritance by the NRI/PIO can he repatriate the sale proceeds?
Yes, general permission is available to the NRIs/PIO to repatriate the sale proceeds of the immovable property inherited from a person resident in India.
Can NRI/ PIO rent out the residential/ commercial property purchased out of foreign exchange/ rupee funds?
Yes, NRI/PIO can rent out the property without the approval of the Reserve Bank. The rent received can be credited to NRO/ NRE account or remitted abroad. Powers have been delegated to the Authorised Dealers to allow repatriation of current income like rent, dividend, pension, interest, etc. of NRIs/PIO.
Can a person who had bought immovable property, when he was a resident, continue to hold such property even after becoming an NRI/PIO?
Yes, a person who had bought the residential/ commercial property/ agricultural land/ plantation property/ farm house in India when he was a resident, continue to hold the immovable property without the approval of the Reserve Bank even after becoming an NRI/PIO.
In which account can the sale proceeds of such immovable property be credited?
The sale proceeds may be credited to NRO account of the NRI/PIO.
What are the types of housing loans available?
Financial institutions offer various housing loans. Prominent among these are:
Home Loans -This is the basic housing loan for the purchase of a new home which covers cost of the flat and parking space ,deposits and charges, stamp duty and registration charges.
Home Improvement Loans – For implementing repair works and renovations in a home that has already been purchased by you. It is also called as “Top-up Loans” by certain banks and home Finance Companies.
Home Construction Loans – For the construction of a new house.
Home Extension Loans – For expanding or extending an existing house.
Land Purchase Loans – For both home construction or investment purposes.
Bridge Loans – For people who wish to sell the existing house and purchase another and need finance for the new house, until a buyer is found for the old house.
Balance Transfer – To pay off an existing housing loan and avail of the option of a loan with a lower rate of interest.
Refinance Loans – To pay off the debt you have incurred from private sources such as relatives and friends, for the purchase of your present house.
Loans To NRI’s – As per requirements of NRI’s who want to buy a house in India
Who can apply for a housing loan?
Any person, including Non Resident Indians, with a steady source of income can borrow funds for financing the cost of a flat from housing finance companies and banks.
Can a Non Resident Indian avail of housing loans?
Yes. Repayment of loan should be made within a period not exceeding 20 years out of inward remittances or out of funds held in the borrower’s NRE/FCNR/NRO accounts.
How much can a person borrow?
Loans are generally disbursed up to a maximum of 85% of the cost of the flat. The balance 15% cost of the flat is to be funded by the flat purchaser from his own contribution. Some banks can fund upto 90% of the cost of flat.
What are the documents required at the time of making an Application for a housing loan?
Financial institutions offer various housing loans. Prominent among these are:
Latest 3 months salary slips (proof of income for salaried individuals)
Proof of age
Photo Identity papers
Proof of residence
Bank statements for the previous six months
For self employed, certified copies of balance sheet, profit and loss statement and tax challans / tax returns for the previous 3 years
For private limited companies, the Articles of Association, partnership deed and details about the firm.
For NRI’s Latest salary certificate specifying, Name (as it appears in the passport), Date of joining, Passport Number, Designation, Perquisites and salary, Photocopy of labour card/identity card, Photocopy of valid resident visa stamped on the passport, Photocopy of monthly statement of local bank account, Statement of NRI/NRO a/c, credit bureau report (CBR) if applicable, Property related documents.
How does Thakker Lifespaces assist a flat purchaser for procuring Housing Finance?
All projects at Thakker Lifespaces are pre-approved for grant of home loans by leading housing finance companies and banks. Thakker Lifespaces liaises with the all leading Housing Finance Institutions/ Banks for processing the loan, documentation and disbursement of loans.
What is an EMI?
Equated Monthly Installment.
Equated Monthly Installment (“EMI”) is the amount comprising a portion of the interest and the principal loan amount which is payable by a borrower to the lender every month.
How is the rate of interest calculated in India?
Interest rates vary from time to time and from institution to institution. The interest is calculated either on a daily reducing, monthly reducing or yearly reducing balances.
What is a fixed rate housing loan?
A fixed-rate housing loan is a loan where the rate of interest is constant through the entire term of the loan period.
What is a floating interest rate housing loan?
Floating interest rate loan is a loan where the interest rate payable is linked to the market conditions such as the bank’s retail prime-lending rate (PLR). It rises and falls with the bank rate variance. Hence a borrower bears the risk of interest rate fluctuations. Floating interest rates offered are usually lower than the fixed interest rates.
What is the difference between monthly reducing interest rate and yearly reducing interest rate?
In a monthly reducing interest system the principal on which interest is paid reduces every month as EMI is paid. In the annual reducing system the principal is reduced at the end of the year, and the borrower pays interest on a certain portion of the principal, which is actually paid back to the lender. The EMI for the monthly reducing system is effectively lesser than the yearly reducing system of calculating interest.
What are the repayment period options?
Repayment period options range generally from 5 to 20 years
What are the charges for availing a housing loan?
Fees – payable to the lender on applying for a loan and is either a fixed amount not linked to the loan or may also be a percentage of the loan amount. Prepayment Charges -between 1% and 2% of the amount being pre paid is charged by some institutions when a loan is paid back before the end of the agreed duration. Stamp Duty and Registration fee on a deed of mortgage.
Miscellaneous Costs – such as administrative costs, legal documentation charges, technical consultant charges.
What security is required for a housing loan?
The flat purchased is the primary security and is mortgaged to the lending institution till the entire loan amount is repaid. Additional security such as life insurance policies, shares, bonds, fixed deposit receipts, national savings certificates can also be offered as collateral security as per the requirements of the institution from case to case basis.
Do lending companies require guarantors?
Yes. Many lending companies require guarantors however it may differ from case to case and Bank to Bank but it may not be mandatory.
What is the time required for disbursement of loans?
Usually loans are disbursed after compliance of all Credit of the Borrower, Legal and Technical aspects by the lending Institutions for the bought property and only after Borrowers Contribution is paid towards the purchase of the said property and proof of it is provided to the lending Institution..
What is the time required for approval of a loan application?
About 15 – 20 days
Do institutions accept joint loan applications?
Do lending institutions offer special schemes/incentives/offers for housing finance?
Sometimes lending institutions offer special schemes / incentives/offers for a specified period or under a special scheme. Incentives could be any of the following:
Free accident insurance
Waiver of pre payment charges
Waiver of processing fee
Which sources, other than housing finance companies, can give loans for purchasing a property?
A loan for purchasing a property can be availed from the following sources:
Housing Finance Companies