Buying property in India from abroad: the honest, step-by-step version

Most people who call us from abroad have already done a fair bit of homework. They've watched the walkthrough videos, compared a dozen projects on their phone during the commute, and asked a cousin to "just go and have a look." What they usually want from us isn't more information. It's the order of things. What comes first, what can wait, and where the traps are.

So here it is, the way we'd explain it across a table. No gloss, no brochure language. Just the steps, in sequence, with the bits people tend to learn the hard way.

First, are you actually allowed to buy?

Almost certainly yes, but it's worth being precise. Under FEMA (the Foreign Exchange Management Act), three groups can buy property in India:

• NRIs - Indian citizens living outside India.
• OCI cardholders - foreign citizens of Indian origin. The old PIO card was merged into OCI back in 2015, so if you still have a PIO card, check its status before you rely on it.
• Your spouse, if they're a foreign national, can hold one property jointly with you, as long as your marriage is registered and has lasted at least two years. A small rule, but people do miss it.

You can buy as many residential and commercial properties as you like. Flats, villas, builder floors, shops, office space - all fine.

What you can't buy is agricultural land, plantation property or farmhouses. This catches people out more than you'd think, because a "farmhouse plot" on the edge of a city can look very tempting on a video call. The one exception is inheritance: if your father leaves you his land in the village, you can inherit it. You just can't go out and purchase it.

If a seller tells you a farmhouse is "fine for NRIs, everyone does it," that's your cue to stop, not to sign.

Decide what you're really buying for

This sounds like a soft step. It isn't. The answer changes everything that follows.

A family in Dubai planning to move back in five years needs a different home from a software engineer in Toronto who wants a steady rental and has no plans to return. And someone whose parents live in Lucknow, and who wants a ground-floor place near a good hospital for them, has a third set of priorities altogether.

Be honest with yourself about which one you are:

• Your own future home - layout, schools, the feel of the neighbourhood matter most.
• Rental income - tenant demand, maintenance costs and how easy it is to manage from abroad matter most.
• A home for family - access, safety, nearby hospitals and someone trustworthy close by.
• Long-term appreciation - location, developer track record and infrastructure that's actually being built, not just announced.

Write it down. When a slick project tempts you later, that note will save you from buying the wrong thing for the right price.

Shortlisting without losing your weekends

From abroad, the shortlist is where you do most of your real work. We'd suggest keeping it to three or four projects. Any more and you start comparing swimming pools instead of fundamentals.

For each one, check:

1. RERA registration. Every eligible project must be registered with the state's RERA authority. Look it up yourself on the state RERA website. Note the registration number, the declared completion date and the quarterly progress updates.
2. The developer's past projects. Not the brochure list. The actual buildings. Were they delivered roughly on time? Do residents complain about leaks, lifts or maintenance?
3. Approvals. Building plan approval, environmental clearance where it applies, and for ready homes, the Occupancy Certificate.
4. The real price. Base price plus everything else - preferential location charges, parking, club membership, maintenance deposits, GST where it applies, stamp duty and registration. We cover these properly in our post on the fine print.

Site visit or video tour?

Here's our honest view. A video tour is very good for ruling things out. It's not great for ruling things in.

On a video call you'll see the sample flat, the view from the balcony and the lobby. You won't feel the traffic at 9 a.m., smell the drain behind the boundary wall, or notice that the "two minutes from the metro" walk involves crossing a highway.

So use video for the first cut. Then, for the final one or two, get someone physically there. Ideally that's you, on your next trip. If that's not possible, send someone whose judgement you trust and give them a list:

• Visit at two different times of day.
• Walk from the gate to the nearest main road and the nearest market.
• Talk to a security guard or a shopkeeper nearby. They know things brochures don't.
• Photograph the actual construction stage, not just the sample flat.

Booking: the point where excitement outruns paperwork

Once you've chosen, the developer will ask for a booking amount. This is usually a modest sum, but it's the moment people relax too early.

Before you pay anything:

• Get the draft agreement for sale and the payment plan in writing.
• Confirm the cancellation terms at the booking stage. What do you lose if you walk away in a month?
• Remember that under RERA, a developer can't take more than 10% of the cost as an advance before a written agreement for sale is registered.

Pay the booking amount through normal banking channels - a transfer from your NRE, NRO or FCNR account, or an inward remittance from abroad. Never cash. Keep the receipt. You'll want every one of these later, especially if you ever plan to take the sale money back out of India.

The agreement for sale

This is the document that really governs your purchase. Not the brochure, not the sales manager's WhatsApp messages. The agreement.

Read it slowly, or better still, have a property lawyer read it with you. Pay particular attention to the carpet area, the possession date, what happens if that date slips, what you get if you cancel, and the list of specifications. If something you were promised verbally isn't written there, assume it doesn't exist.

Once both sides are happy, the agreement is signed and registered at the sub-registrar's office. If you can't be in India for this, you'll need a power of attorney. Make it a specific one, limited to this transaction, not a general POA that lets someone do anything with your assets.

Paying as construction moves

For an under-construction home, payments usually follow a schedule - either tied to construction milestones or to calendar dates. Milestone-linked plans are generally kinder to buyers, because you pay as the building actually rises.

Before each payment, ask for a photo or site update, and check it against the RERA progress report. It takes ten minutes. It also tells the developer you're paying attention, which is no bad thing.

If you're taking a home loan, the bank will usually pay the developer directly at each stage. You'll pay EMIs from your NRE or NRO account.

Registration of the sale deed

For a ready property, or when an under-construction home is complete, the final step is the sale deed (or conveyance deed). This transfers ownership to you.

You'll pay stamp duty and registration fees at this stage. The rates are set by each state, sometimes with concessions for women buyers. They're calculated on the higher of the agreement value and the government's circle rate for that area. Don't try to under-declare the value to save on stamp duty. It creates tax problems later and it's not worth it.

Bring your PAN, passport (and OCI card, if you have one), photographs and address proof. You sign in front of the sub-registrar with two witnesses, and the signing itself is usually over faster than the wait outside.

Possession: don't rush the handover

When the developer calls to say your flat is ready, there's a temptation to just collect the keys. Slow down.

• Check the developer has the Occupancy Certificate for your tower. Without it, you shouldn't take possession.
• Do a proper snag inspection. Doors, windows, plumbing, electricals, tiling, dampness. Make a list and get it signed off.
• Collect the possession letter, all receipts and the original documents.
• Get the property mutated in your name in the local municipal records, and transfer the electricity and water connections.

Under RERA, if structural defects or poor workmanship show up within five years of possession, the developer has to fix them free of charge. Keep that in mind, and keep your snag list.

None of this is complicated on its own. It just needs doing in the right order, by someone who's paying attention. If you'd like a second pair of eyes on a shortlist or a draft agreement, an NRIVEST advisor is always happy to have that conversation.

Rules on property, tax and foreign exchange change from time to time. Please confirm the current position with a qualified CA or property lawyer before you act.