NRIs can cash out of Indian real estate

November 20, 2006	(1 votes, average: 2 out of 5)  Loading ...
Print This Story   Email This Story Subscribe Newsletter

Non-resident Indians with wealth stuck in real estate in India have reason to rejoice. They can now not only cash out on the property they hold in India but have also been provided an incentive to invest in real estate.

This has been made possible by the Reserve Bank of India allowing NRIs to remit the proceeds from the sale of immovable property. The RBI has lifted the 10-year lock-in as a step towards further liberalisation of the capital account.

“The key impact will be that it will provide an exit route to NRI investors, who till now did not have the comfort level to invest in property here as they could not repatriate the gains on account of the lock-in condition. For North America-based NRIs, who may not wish to come back to India, this will provide an opportunity to invest and exit as and when they choose to,” said Anshuman Magazine, head (South Asia), at CB Richard Ellis, a real estate consulting company.

The remittance of sale proceeds of immovable property is, however, within the overall ceiling of $1 million per annum.

Barring a few premium properties in Delhi and Mumbai, the Rs 4.5 crore (Rs 45 million) cap would not be a hindrance in almost the entire Indian market for built-up homes and apartments, real estate analysts said.

Banks have been told to allow remittances out of balances in non-resident ordinary accounts, including sale proceeds of immovable property, provided the amount does not exceed $1 million per financial year.

The analysts said NRIs who already own property in India, especially inherited titles, would be able to sell and possibly avoid messy family disputes and litigation.

Some analysts said the $1 million cap could possibly be circumvented through co-ownership of properties. “You can buy floors in a building and register them in separate names. In this way, an investor can repatriate multiples of the $1 million cap,” a real estate expert added.

Source from Rediff News

News Published Under:   Non Resident Indian (NRI) |

Comments