What are the Benefits for NRI Real Estate Investment via Foreign Funds ?
a. Ease of Transaction
- NRE/NRO accounts simplify fund transfers and real estate investment processes. NRIs can directly remit money into these accounts and use it for property purchases.
- Authorized banking channels ensure transparency and compliance with FEMA regulations.
b. Repatriation Flexibility
- NRIs can repatriate the principal investment amount and capital gains, making it easy to liquidate assets when needed.
- FEMA guidelines allow repatriation for up to two residential properties and one commercial property.
c. Participation in India’s Growth Story
- India’s urbanization and economic growth present lucrative real estate investment opportunities in Tier-I and Tier-II cities.
- The government’s focus on infrastructure, smart cities, and housing for all increases the value of real estate investments.
d. Tax Efficiency
- NRIs benefit from tax advantages under DTAA and exemptions on long-term capital gains if reinvested in certain assets.
- Rental income earned from real estate is taxable but repatriation is allowed post-tax payment, ensuring compliance.
e. High Rental Yields
- Rental yields from residential properties average 2-4%, while commercial properties can yield 6-10% annually.
- Properties in IT hubs and metro cities often experience consistent demand, ensuring steady rental income.
f. Premium Investment Opportunities
- NRIs can access luxury projects, high-growth corridors (e.g., Dwarka Expressway, Outer Ring Road in Bangalore), and pre-launch offers that promise higher returns on investment.