Real Estate in India - the Buying Process

If you are just beginning your research you probably want to get a feel for what what buying some real estate in India involves.

It is not easy for a foreigner to buy real estate in India. Foreigners have to have been resident in India for 183 days and need permission to buy real estate from the Reserve Bank of India (RBI). If you visit India as a tourist you will only be granted a stay of a maximum 180 days. The exception comes if you are a non-resident Indian (NRI), this type of person may have Indian descent or be an Indian citizen living in another country.

Investors from other countries are sometimes able to buy property on a 5 year lease. These people then apply for residency within these 5 years and hope to be able to satisfy the requirements.

The Government of India seems to be keen to stop people using a way around property laws by declaring that they are a company, buying property as a company and then using it for residential purposes. You now have to prove your business activites if you buy property as a company.

If you are foreign and you are lucky enough to obtain permission to buy a property then the process is quite easy compared with some other countries.

As always using due diligence is important, do your research, talk to as many people who know about the property you are buying and the area you are buying it in as you can. Make sure you hire a reputable independent lawyer to oversee everything.

When you have found your property at a price that has been agreed by both yourself and the seller, the lawyer will create an agreement of sale. On the signing of this agreement, between 10% and 20% deposit is paid to the seller. The lawyer will then make further checks, title deeds will be handed over and the registration of deeds is done.

The cost of stamp duty varies according to where you buy your property, but it can be between 4% and 10%. To register the property you will have to pay a further fee of 1%.

Plan for everything involved in the purchase of real estate in India to take about 3 months from start to finish and always allow a little more time just in case.