Foreign owned property in Goa, (Part One)

dzibead

Yep, need not be a "genetic" Indian to be a PIO. I'll look up the law for you later, but I gotta run now!

Nick-H

...married to an Indian citizen, or to someone who themselves qualifies as a PIO, is the simplest one.

There are quite a few of those that are "PIO"s in the PIO Card sense of the word. I expect to become one myself soon.

dzibead

Here's "Person of Indian Origin" info I was too rushed to look up the other day:

Under Indian law, a "Person of Indian Origin" is defined as a citizen of a foreign country – but NOT Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal or Bhutan! -- who (1) at any time held an Indian passport; or (2) was born in and was a permanent resident in India (as India was defined in the Government of India Act,1935 or in any other territory that later become part of India) or who has at least one parent or grandparent or great-grandparent who was born in and permanently resided in India as India is defined above and provided that they were not at any time a citizen of any of the “prohibited” countries listed above; or (3) the spouse of an Indian citizen or a person of Indian origin as defined above. A person who is a citizen of one of the "prohibited" countries can't be a PIO even if he or she otherwise qualifies.

So, for example, a U.K. citizen with a Raj-era parent, grandparent, or great-grandparent who was born in and permanently resided in India could qualify as a PIO. I know of at least one such person who is actually a member here who has done so. Therefore, the legal definition of Person of Indian Origin doesn’t depend on ethnicity or being “genetically” Indian, even though most Persons of Indian Origin are, in fact, ethnically or "genetically" Indian.

bellcrank

Regulation 2c of FEMA defines

"A “Person of Indian origin" ( PIO ) in context to these regulations is defined as an individual.

1. who at any time held an Indian passport, or

2. who himself, or whose father or grandfather was a citizen of India

(excluding citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal or Bhutan.) "

This for a start differs from dzibeads definition above as it does not include the spouse

A spouse of non-Indian origin married to a PIO (under FEMA definition) may hold a PIO card by virtue of marriage and eligibilty under Indian Law, but does not qualify under FEMA to purchase property. I found out at the last minute the hard way!

So there are atleast two official deinitions of PIO under Indian Law, Any advance?

Interestingly this conflicts with advice from various embassy and consular sites which list one of the benefits of holding a PIO card as:

"(iii) Parity with Non-Resident Indians in respect of facilities available to the latter in economic, financial, educational fields, etc. These facilities will include:-

(a) Acquisition, holding, transfer and disposal of immovable properties in India except of agricultural/plantation properties;"

Clearly not true in all cases.

Nick-H

Thank you for that, Bellcrank.

As someone who was relying on future possession of a PIO card (married to an Indian Citizen) to allow me to purchase land in my own name I should be very interested to hear more of your experience....

<a few minutes later>

Just saw your post on the other ...err, one of the other Goa property threads.

kavindra

Just looking at the Indian Embassy website - apparently there are two different type of PIO categories:

1. PIO Cards issued earlier as per PIO Card Scheme (1999)
2. Cards issued under the PIO Card Scheme, 2002

Not totally clear as to what the specific differences are, but http://www.indianembassy.org/policy/...ction_PIO.html
does list them separately. But, in either case - there do not appear to be different classes for those who got it because their spouse was a PIO versus those that qualified on the basic grounds. So, I too am keen (on behalf of my wife) on finding out the limitations on property acquisition rights.

Also, slightly off topic (as we already are), is there a greater clarity on the OCI status. I do qualify, but have not pursued it not knowing the benefits but having read something on IM that it results in forfeiture of the consular access previledges...

Nick-H

I think cost and validity period are the major differences?

himadventures

So good views here...well, we are INDIANS and our law is as confused as we are. I am sure some day this experimentation will end and we will be having some clear policy making *policy*.

GOA and land mafia is well known to everyone and we all knows that polliticians are involved in all this hi-fo game.

Now-onone hand you get millions from NON-INDIANS and now you are making a road how to kick them out....great !

NO...shortening of TOURIST VISA is foolishness and if GOVT. do this..once again it proves that DELHI[ PARILIAMENT] IS ALWAYS FULL OF FOOLS.

I am sure that peoplewho had invested money will not be cheated and kicked out !

IM is always there for a cause...I beleive !!

Seabass2006

Hi im new to this forum, which is very informative.

Im thinking of buying a property in Goa.

My developer has said that setting up a company would be sufficient for me to purchase a property. However after reading your postings this does not appear to be the case.

If I form a company to let out the property as a holiday home and maybe employ a local person for maintenace and houskeeping purposes would this be acceptable.

Thanks

dribyar

To be eligible to buy a home in India, a foreign national of non-Indian origin is required to reside in the country for 183 days in a tax year before he or she can purchase the property on a freehold basis. Many travelers from the UK come to Goa on 180-day tourist visas. To enable them to acquire a home, they sign a lease-contract that enables them to enjoy the use and possession of a home in Goa in the interim (i.e., until they qualify for the freehold in the manner described below), which they otherwise would not be able to do because of their 180-day visa.
On the strength of their lease-contract as proof that they have a home in Goa, many of them have then obtained longer-term visas (i.e. of more than six months duration) from Indian high commissions/consulates abroad, or six-month, non-tourist visas that can be extended in India. Some may travel to a neighboring country like Sri Lanka or Nepal to renew their Indian visa and return to India thereafter. This enables them to fulfill the residence criterion, i.e., to stay for a 183-day period in any particular year and thereby qualify for freehold ownership.

The lease contract has a duration of 58 months (approx. five years) and is renewed for additional 58-month periods, as necessary or until such time the foreign national is able to qualify for the freehold. As soon as he or she does so, the lease-contract is converted at no extra cost into a freehold (purchase) deed, which is then registered in the local property registry office.
The lease arrangement is convenient for many since most travelers are initially issued only 180-day visas. In any case, they usually spend only a few weeks each year in the initial stages. Most of them intend to spend longer periods in future when they will use their home in Goa for their retirement years. Therefore, they plan to qualify for the freehold electively when it is convenient for them to spend the six-month period in India and / or when they are ready to retire. The period of residence need not be continuous, but has to add up to 183 days in any tax year (April to March of the following calendar year).

The reason that the lease contract has a duration of under five years is because the regulations prescribe that any lease arrangement of 60 months or more requires the lessee to fulfill the residency requirement.
Another aspect of Indian property regulations is that a foreign national is not permitted to repatriate the proceeds of eventual sale of the property. This legislation is probably intended to discourage speculative trading in real-estate by overseas investors. Hence, a foreign national based in England, for example, who sends Pounds to India for purchase of a villa or apartment, can sell his/her home at some future date if they wish. However, their bankers in India are not allowed to remit the sale price in Pounds back to the country of origin of the seller. The sale proceeds have to be credited to a local bank account of the seller and can be used in any manner as he or she wishes, including the acquisition of another home in Goa. Capital-gains tax is payable on the profit that the seller will make. The tax rate is 20% of the gain if the property has been held by the owner for more than 3 years and approx. 30% of the gain if the seller sells before 3 years of purchase
You need to be a RESIDENT to BUY a property (which means get your deeds). If you are not a RESIDENT then you still own the property on a leasehold as has already been mentioned. What is a RESIDENT. They must be in India for a period of 182 days in the proceeding financial year AND prove their intention to stay in India. BOTH criteria MUST be fulfilled, not just the 182 day bit. Can people please take note of this as it seems to be overlooked by many. The RBI does not stipulate how you can prove your intention to stay but basic employment, having a RUNNING business or selling everything in your home country and moving to Goa should suffice.
.

People have been advised by solicitors to buy property under a business name, dont do it unless you are aware of the law. The buisiness should be trading and the property must be used in connection with the business. You also have to submit information to the RBI within 90 days of purchase if you wish to buy this way. Recent visitors to Goa have seen stories on the Herald and Navind Times that they are stopping foreigners buying. That is not the case they are just cracking down on those that have cut corners and done it illegally in the past. If you do everything by the RBI rules you are fine.
Hope this helps.

GoanCanuck

Very sound advice. Should be made a sticky.

Nick-H

Indeed, an excellent and clear roundup. Should be earmarked for inclusion in an artice or a FAQ.

Welcome to IndiaMike, dribyar, and thank you for putting so much into your first post.

Seabass2006

So is there no way to send your money back to the UK if you decide to sell your property.

Can you pass the property onto your family as an inheritance?

Thanks

Nick-H

I think you can repatriate at least the amount that you brought here. Maybe you can't take the profit out.

Check out the Reserve Bank of India stuff on this

dribyar

To the best of my knowledge, Any will made in the UK is valid in India.