How to Invest in Property in India
The Indian property market represents a high-growth asset class attractive both to domestic and international investors alike. The growth in Indian population is likely to result in even higher demand for housing, driving up the price of the real estate.
However, the Indian property market is heavily regulated, and foreigners are intentionally kept out of the market. Non-Indian residents and non-nationals have to live at least 183 days in India in one financial year to be eligible to buy property in the country. Because tourist visas limit foreigners' stay in the country to 180 days, it becomes almost impossible for them to buy Indian real estate. At the same time, people of Indian origin can invest in the Indian property market without such restrictions.
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Instructions
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Make sure you are eligible to invest in India's property market. To be eligible you either have to be Indian resident (live in the country without leaving it for more than 183 days), have an Indian passport or be a person of Indian origin (up to four generations removed).
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Find the property you are interested in and negotiate the price. Basically, there are two most popular types of investment properties in the country: city dwellings and leisure housing. City dwellings refer to apartments and houses in big cities like Mumbai or Delhi, while leisure dwellings are holiday homes in Indian resorts such as Goa.
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Once you agree on the price, an attorney should draw up an agreement of sale. Then you should typically pay a deposit of 10 to 20 percent of the price of the house, while your lawyer makes due diligence on the house, making sure it has no financial liabilities and that the papers are fine.
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Stamp the sale agreement at the Stamp Duty office, and pay the stamp duty. Stamp duties vary across India. For example, in Bangalore the rate is between 4 and 8 percent, while Mumbai's is the most expensive at 10 percent. The cost of agents and legal fees add up to another 7 to 10 percent, but buying a property without an agent is almost impossible, as there are piles of paperwork involved and you have to register your sale in a number of state offices (e.g., Sub-Registrar of Assurance), a cumbersome process that can take as long as 70 days or longer. Your agent will do all that for you.
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