Expats buying real estate

hadi10

Anybody having experience in buying real estate as an expat in the country?

the irish indian

Thier are hundreds of emerging horror stories out there at present.
Basically if you are not a Person of Indian Origin then dont buy property in India.
The best you can hope for is a 5 year rolling lease from developers like Acron but this means you end up paying a Freehold Price for a Leasehold Property.

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Dr. Gajaprishthakara

hi hadi,

please do a search on this site and you will find a lot of information. once you have read it, if you have a specific question, please post it.

Dr. Gajaprishthakara

the most relevant threads are:
Foreign owned property in Goa, (part one and Two)

Nick-H

I notice the OP's location is Chennai, so maybe they are are not yet another Goa Buyer.

But the law is national, so if the OP is not familiar with the basic hurdles (number one: you can't ) then he should certainly read the Goa property threads to begin with

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TrinTrin

I'm here buying land (as an expat) through an Indian company owned offshore. It is a nightmare indeed. :-)

capt_mahajan

Its a nightmare even for those born and brought up in India... so expats need to tread with greater caution.

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hadi10

The way of how TrinTrin is doing it sounds interesting. Can you describe how you set this up?

I have investigated more now and received the information from Indian tax advisors, that
a) Foreigners with a resident permit (I have, I have) can buy property
b) The foreigner can incorporate a local company and buy it through that.

Any views?

TrinTrin

Well first off

1. Foreigners can't speculate on land. You have to develop it. If the government decides you are speculating they can destroy you.

2. Any company you incoporate to develop land has to be capitalized to 10 million dollars within 6 months of incorporation or acquisition. So unless you have 10 million dollars ready to put in the country you are not welcome. If you don't do this the government can destroy you.

One small loophole is finding a trusted Indian and giving him 15 percent of your shares. Then you only need to capitalize 5 mill. Although even if you do that, the Indian government can decide to destroy you.

3. When it comes to developing you'll need to develop a minimum of 50,000 square meters which in an optimal FSI is really around 45 acres within 5 years (maybe its 3) or else the government can destroy you. Look up something called, "Press Note 2" compliance.

4. Any money you put in the country is basically trapped here for the better part of a decade and if the RBI decides you did anything wrong it is there indefinitely or possibly they bar you from India and then destroy you.

It's my job to do this so I can say that there is little incentive for a foreigner to legitimately come in and buy land. You are much better doing as the Russians do in Goa - paying politicians bribes - but be careful involving politicians because the wrong one will destroy you.

Nick-H

Very wrong. So wrong, you should sack the advisors at once. If they don't know the difference between the FEMA definition of 'residence' and a 'resident's permit' they are ignorant and incompetent --- at least on this subject. Really.
Not exactly wrong, but so incomplete as to be as good as. Sack those guys.

Are you talking buying a house/single residential plot? That is a different order of proposition to TrinTrin's business.

If you are talking about residential, please read our Foreign-owned Property in Goa threads. You'll find out about FEMA and stuff like companies there, though you probably won't like what you read.

goangoangone

The point not to be missed here is that whatever you do,
they can destroy you.

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Blue Topaz

Nick,

What is the difference between the FEMA definition of residence and a residence permit? (Please please don't make me read those two threads on buying in Goa as I go cross-eyed after about 10 pages!).

Interestingly, our residence visa's are being processed at the minute and our company HR Manager said that we could buy property (as in house / bungalow / apartment) if we wanted to after a qualifying period... We are UK nationals with no Indian Origin at all.

Is he wrong to say that do you think?

Blue Topaz

Nick-H

He may not be wrong, it may be possible to fulfill the FEMA residency requirement under an employment visa. That would take further research and enquiry. Unless you are going to work for a lawyer, bear in mind that people are usually not well-informed about such requirements in their own countries: I couldn't tell you a fraction of the UK stuff on this, compared to what I've come to know about India. I'm British: why would I ever need to know it? Of course, your HR man might be an IndiaMike member, in which case he could be pretty-well informed!

There is no 'residency' visa; it sounds like you will be having employment visa (or if only one partner is working, one emplyment and one 'X' visa).

The definitions of residency are different for FEMA, for Tax and for Immigration. Essentially they are unrelated and independent of each other. Your Registration Certificate/Resident's Permit is more for them to keep track of you than anything else, although it will make it possible for you to get driving licenses, buy cars, and some other stuff (I don't think anyione has even seen an actual statement of what itmight entitle you to!).