1. Who is a non-resident Indian (NRI)?

An Indian Citizen who stays abroad for employment/carrying on business or vacation outside India or stays abroad under circumstances indicating an intention for an uncertain duration of stay abroad is a non-resident. (Persons posted in U. N. Organizations and officials deputed abroad by Central/state Government and Public Sector undertakings on temporary assignments are also treated as non-residents). Non-resident foreign citizen of Indian Origin are treated on par with non-residential Indian Citizen (NRI’s) for the purpose of certain facilities.

 2. Who is a person of Indian Origin?

For the purpose of availing of the facilities of opening and maintenance of bank accounts and investments in shares/securities in India.

A foreign citizen (other than a citizen of Pakistan or Bangladesh) is deemed to be of Indian Origin, if, he, at any time, held and Indian Passport, or he or either of his parents or any of his grand parents was citizen of India by virtue of the Constitution of India or Citizenship Act, 1955 (57 of 1955).

Note: A spouse (not being citizen of Pakistan or Bangladesh) of and Indian citizen or of a person if Indian Origin is also treated as a person of Indian origin for the above purposes provided the bank accounts are opened or investments in shares/securities in India are made by such persons only jointly with their NRI spouses.

For investments in immovable properties.
A foreign citizen (other than a citizen of Pakistan, Bangladesh, Afghanistan, Bhutan, Sri Lanka or Nepal), is deemed to be of the Indian Origin if he held and Indian Passport at any time, or he or his father or parental grand-father was a citizen of India by virtue of the (Constitution of India or the Citizenship Act, 1955(57 of 1955).

 3. Do non-resident Indian citizen require permission of Reserve Bank to acquire   residential/commercial property in India?

No.

 4. Do foreign citizens of Indian Origin require permission of Reserve Bank to purchase immovable property in India for their residential purpose?

Reserve Bank has granted general permission to foreign citizens of Indian Origin, whether resident in India or abroad, to purchase immovable property in India for their bonafide residential purpose. They ate, therefore, not required to obtain permission of Reserve Bank.

 5. In what manner the purchase consideration for the residential immovable property should be paid by foreign citizen of Indian Origin under the general permission?

The purchase consideration should be met either out of inward remittances in foreign exchange through normal banking channels or out of funds from NRE/FCNR accounts maintained with banks in India.

 6. What are the formalities required to be completed by foreign citizen of Indian Origin for purchasing residential immovable property in India under the general permission?

They are required to file a declaration in form IPI 7 with the Central Office of Reserve Bank at Mumbai within a period of 90 days from the date of purchase of immovable property or final payment of purchase consideration along with a certified copy of the document evidencing the transactions and bank certificate regarding the consideration paid.

 7. Does such property can be sold without the permission of Reserve Bank?

Yes, Reserve Bank has granted general permission for sale of such property. However whether the property is purchased by another foreign citizen of Indian Origin, funds towards the purchase consideration should either be remitted to India or paid out of balance in NRE/FCNR accounts.

 8. Can sale proceeds of such property if and when sold be remitted out of India?

In respect of residential properties purchased on or after 26^th May 1993, Reserve Bank considers applications for repatriation of sale proceeds up to the consideration amount remitted in foreign exchange for the acquisition of the property for two such properties. The balance amount of sale proceeds if any or sale proceeds in respect of properties purchased prior to 26^th May 1993, will have to be credited to the ordinary non-resident rupee account of the owner of the property.

 9. Are any conditions required to be fulfilled if repatriation of sale proceeds is desired?

Applications for repatriation of sale proceeds are considered provided the sale takes place after three years from the date of final purchase deed from the date of payment of final installment of consideration amount, whichever is later.

 10. What is the procedure for seeking such repatriation?

Applications for necessary permission for remittabnce of sale proceeds should be made inform IPI 8 to the Central Office of Reserve Bank at Mumbai within 90 days of the sale of the property.

 11. Can foreign citizen of Indian Origin acquire or dispose of residential property by way of gift?

Yes. Reserve Bank has granted general permission to foreign citizen of Indian Origin to acquire or dispose of properties up to two houses by way of gift from or to a relative who may be an Indian Citizen or a person of Indian origin whether resident in India or not, subject to compliance with applicable tax laws.

 12. Can immovable property held in India, be transferred by way of gift to relatives/registered charitable trusts/organizations in India?

Yes. General permission has been granted by Reserve Bank to non-resident persons(foreign citizen) of Indian Origin to transfer by way of gift immovable property held by them in India to relatives and charitable trust/organizations subject to the conditions that the provisions of any other law, including Foreign Contribution (Regulation) Act, 1976, as applicable, are duly complied with.

 13. Can foreign citizen of Indian Origin acquire commercial properties in India?

Yes. Under the general permission granted by Reserve Bank properties other than agricultural land/farm house/plantation property can be acquired by foreign citizen of Indian Origin provided the purchase consideration is met either out of inward remittance in foreign exchange through normal banking channels or out of funds from the purchaser’s NRE/FCNR accounts maitained with banks in India and a declaration is submitted to the Central Office of Reserve Bank in Form IPI 7 within a period of 90 days from the date of purchase of the property/final payment of purchase consideration.

 14. Can they dispose of such property?

Yes.

 15. Can sale proceeds of such property be remitted out of India?

Yes. Repatriation of original investment in respect of properties purchased by foreign citizen of Indian Origin on or after 26^th May 1993 will be allowed to be remitted up to the consideration amount originally remitted from abroad provided the property is sold after a period of three years from the date of the final purchase deed or from the date of payment of final instalment of consideration amount, whichever is later. Application for the purpose are acquired to be made to the Central Office of Reserve Bank within 90 days of the sales of property in Form IPI 8.

 16. Can the properties(residential/commercial) be given on rent if not required for immediate use?

Yes. Reserve Bank has granted general permission for letting out any immovable property in India. The rental income or proceeds of any investment of such income are eligible for repatriation.

 17. Can NRI’s obtain loans for acquisition of house/flat for residential purpose from authorized dealers/financial institutions providing housing finance?

Reserve Bank has granted general permission to certain financial institutions providing housing finance e.g. HDFC, LIC Housing Finance Ltd., etc., and authorized dealers to grant housing loans to non-resident Indian nationals for acquisition of a house/flat for self-occupation subject to certain conditions. The purpose of the loan, margin money and the quantum of loan will be at par with those applicable to housing loans to residents. Repayment of loan should be made within a period not exceeding 15 years out of inward remittance or out of funds held in the investor’s NRE/FCNR/NRO accounts.

 18. Can Indian companies grant loans to their NRI staff?

Reserve Bank permits Indian Firms/Companies to grant housing loans to their employees deputed abroad and holding Indian passports subject to certain conditions.

 19. Can authorized dealer grant housing loan to non-residents of Indian nationality where he is a principal borrower with his resident close relative as a co-obligator/ guarantor or where the land is owned jointly by such NRI borrower with his resident close relatives?

Yes. However, in such cases the payment of margin money and repayment of the loan installment should be made by the NRI

Have money and want to buy a house? Good sense, if you are in Delhi.

“Land has become scarce in Delhi city, with very few new developments coming up. Most of the new supply in Delhi is coming up in townships such as Dwarka. So, if you are getting a premium property which is priced anywhere between Rs 4,000 and Rs 6,000 a sq ft in Delhi, it is considered reasonable, compared to other cities in Asia Pacific,” says Nitin Gupta, associate director, PricewaterhouseCoopers.

“These properties can still give a return of 20 per cent over the next three years,” adds Gupta. “Although Delhi prices are at an all-time high, they are not going to come down in the near future. In fact, whatever correction has to happen, has already happened.

Compared with the last couple of years when prices increased 40-50 per cent, this year, the rise has been a more modest 15-20 per cent. We expect this trend to continue, especially in the Rs 60 lakh (Rs 6 million) to Rs 1 crore (Rs 10 million) segment,” says Jayant Verma, executive director - north, Knight Frank, a real estate consulting firm.

He also predicts a 10-15 per cent correction in the prices of properties priced upwards of Rs 1 crore, in the medium term. “There is too much supply coming in at this end with developers such as DLF, Parsvanath and Unitech announcing new developments. But we are doubtful about whether the market can absorb so many of these properties. By the time these properties are actually ready, we expect a slump in demand,” says Verma.

And who should buy? Buy only if you are a long-term investor and are not looking at short-term gains, says Gupta.

“Only then does it make sense to put in Rs 4,000-6,000 for a sq ft. If you are looking at short-term gains, then investing in a property in Delhi may not be the best use for your money,” says he.

Mumbai: Wait and watch, if you can

“Prices are at an all-time high. Although there are still some areas where you can get a price advantage, such as Thane and Kharghar, housing properties in Mumbai are not likely to see significant appreciation. So, if you are buying from an investment point of view, this may not be the best time,” says Pranay Vakil, CEO of Knight Frank.

Most buyers in the city today are end-users who are looking at an incremental investment, moving from their first houses to larger second houses. Therefore, the rising price points still work  out for them as they are ploughing back money from the  sales of the earlier properties, he says.

“But if you are a first-time buyer and afford to hold out for another three to five years, then you should,” says Vakil.  The reasons: a host of government initiatives that are expected to remove restrictions on developments in the city.

The state government has committed itself to repealing the Urban Land Ceiling (ULC) Act and is expected do away with the Rent Act. The repeal of the Rent Act will release a substantial chunk of the locked-up housing stock in the city, while the ULC repeal will release virgin  and for development within the city.

The Bombay High Court ruling on the Transfer of Development Rights, too, will release additional FSI in the city. The ruling has opened up older buildings for redevelopment along the LBS Marg in the central suburbs and SV Road in the western suburbs, with a doubling in existing FSI.

Vakil says these developments will also keep the price hike in check over the short term, as the supply situation begins to ease in the next two-three years.

Kolkata: Buy! Buy! Buy!

“If you have the money, buy. And buy now, before the prices shoot through the roof,” says Kolkata builder Jitendra Khaitan. “Property prices in the metro are just beginning to go up. Last year, we saw some areas appreciate fast — New Town, for example, surged 100 per cent, while Diamond Harbour and Joka shot up 60 per cent,” he says.

“In the next five years, Salt Lake will be the centre of the city and values here will appreciate tremendously,” adds Khaitan.

“Kolkata is on an upswing, and as long as the present government of Buddhadeb Bhattacharya is in the saddle, the pace of developments is expected to continue,” says Pranay Vakil.

Areas to buy? Rajarhat, EM Bypass and areas in the vicinity of Salt Lake and New Town. “With companies like TCS and Godrej showing a major interest and the upcoming developments on the Bata land and the Salim group developments, the city is coming into focus. Prices are slated to go up for the right projects,” says Vakil.  Who should buy?

“If I had the money I would buy,” quips Vakil. “Kolkata is a very practical market. You can buy a two-bedroom apartment in the Rs 10 lakh (Rs 1 million) bracket or in the Rs 4 crore (Rs 40 million) bracket,” says Khaitan.

It is important to be aware of Thailand’s buying procedure for land or property, which at times may appear complicated. The research and advice below will help ensure you a trouble-free property purchase.

The information below is a general guide to the property buying procedure in Thailand. We will be glad to guide you through the procedure and help you avoid any pitfalls.

Titles

Overseas buyers can purchase Thai residential or commercial property without major restrictions.

If you plan to buy land, or a villa then you will be required to setup a Thai limited liability company which will cost around £1,000 and will also have on going fees of approximately £50 per month. Alternatively you will need to purchase through a leasehold agreement, totaling 90 years. Although a freehold title would be of distinct advantage, a leasehold title bears no specific disadvantage to the purchaser. Both forms of purchase are safe and effective means of property ownership by foreigners in Thailand.

Using an Agent

A good agent is essential when you buy a property in Thailand. Propertyshowrooms.com always carefully analyse your particular investment requirements and provide you with a selection of options from our database. In addition, we will recommend all related professional services you will require to make a safe and reliable purchase.

Appointing a Lawyer

It is wise to appoint a lawyer who is fluent in your language so that you understand properly all the legalities and proceedings. Our International Property Investment Network (IPIN) agents will be able to recommend a good lawyer who can carry out the necessary checks on the property or land in Thailand and complete the legal requirements of the sale.

Lawyers will:

• Check the current owners have the correcttitleto the property
• Check for any charges and liabilities still owed on the property
• Check your contract and advise youon the obligations for both parties
• Help you through the payment/funds transfer
• Ensurethat the propertyis registered appropriately and in your name

The Initial Purchase Agreement

The initial purchase agreement will detail price, terms and conditions, settlement date etc. and in most cases a 10% deposit will be required to secure the property. This deposit is refundable should the sale not go through, as long as it is not your fault.

Reservation Fee

When buying a new condominium, an initial reservation deposit of about $1,250 is required and this amount is deducted at a later stage from the total price. Once an agreement is signed, usually 10 to 15 days after the reservation, the buyer is required to pay 10% of the total price. Depending on the terms of the contract, the balance then could be due in installments or as a lump sum at the time the title is transferred

Fees

As a general rule, for residential sales you can expect the total fees and taxes to work out to be approximately 2 to 3% of the property market value.

There is a stamp fee of 0.5%, a transfer fee of 2%, a business tax of 3.3 % (levied against an vendor who has been in registered possession of the property less than 5 years), and income tax (similar to capital gains tax) at a variable rate.

Property Taxes

There are 2 different types of tax levied on property in Thailand:

1. Land Tax

This is an annual tax levied on land ownership. The amount is often so small that in practice the body charged to collect it rarely bothers to do so. When they do collect it, it is usually after several years when the amount has accumulated.

2. Structures Usage Tax

This only applies to commercially used properties. The rate is 12.5% on the actual or assessed gross rental value of the property. However, this notional value is well below the commercial market rental value.

If the property is purchased through a company, you need to consider that corporate tax is higher than personal tax, and the cost of setting up the company must be considered as part of the initial investment.

Capital Gains Tax

There is no capital gains tax in Thailand and income tax (usually between 1.0 - 3.0%) on property is the comparable replacement.

Finance

Mortgages in Thailand are still difficult to arrange. However, recently a new branch of the Bangkok Bank has opened in Singapore, which has opened up borrowing possibilities for property investment in Thailand, financing as much as 70% over 10 years for property purchase. You should expect to get no more than 50% in finance, with the exception to some well-known developments where finance of nearer 70% is available.

HSBC has a presence in Thailand and can offer loans of between 1,500,000 and 35,000,000 Thai Baht. Typically they will lend up to 80% of the purchase price and interest rates can be fixed for up to three years.

To buy a condo or another property with a loan, many purchasers get a mortgage in their home country and then transfer the money to a Thai bank account, while using a lawyer to oversee the logistics of the process.

Purchasing property in Dubai is an exciting option for property buyers, but as with all worldwide property, certain issues need to be clarified. This guide is intended to examine various aspects of purchasing a property in Dubai and guide you through the buying process. In March 2006, the long awaited law granting foreigners the right to hold freehold property was brought into force. Foreigners have been granted ownership rights, but are restricted to buying in certain designated areas. These locations are within the spectacular developments which have brought foreign investors flocking to the shores of Dubai.

Below is a summary of the buying procedure for property in Turkey. The most important factor is to work with a well established agent who will guide you through each step of the process.

Many people buying property in Turkey are buying for investment, some looking for a holiday home with the aim of also making a little money and others as a dedicated investment that they may never even visit. It is essential that potential buyers of property in Turkey understand the procedures as it is a new country with regard to overseas property investment.

Buying property in an emerging market such as Turkey is very different from buying in a more traditional market like Spain, where millions of buyers already own homes from all corners of the world. In Spain the procedures are tried and tested and every notary is well experienced. However, in Turkey this is not the case and the lack of experience and firm procedures may lead to delays and confusion.

Purchase Through a Reputable Agent

In Turkey there are some potential pitfalls as many properties do not have titles or planning permission or have simply been constructed illegally. In 2004 the Turkish Daily News reported 600,000 illegal homes in Istanbul alone. There are also various types of “title” available in Turkey giving different land ownership rights. For this reason and the fact that Turkey is new to the overseas property scene, it is extremely important to use a quality agent that can guide you through all the potential problems.

Purchase Procedure

Once you have found your ideal property in Turkey and have decided that you would like to purchase you can usually expect to follow the procedure below:

Reservation Contract

The reservation contract takes the property off the market, usually for between 2 - 4 weeks, allowing time for the appointed legal advisor to carry out the required searches on the property in question. Usually a reservation fee of between €3,000 and €6,000 is paid at this point.

If you do not continue with the purchase due to a legal problem then you should contractually be entitled to a refund of the paid reservation fee, although this is not always the case. However, if you decide not to proceed owing to a change of heart or mind then it is standard that you will lose the reservation fee.

If you decide to proceed with the purchase then the reservation fee already paid is treated as part of the payment towards the property in question.

Preliminary Contract

After the reservation contract is signed and the required fee is paid, you are presented with a report containing the findings of the legal checks. Subject to the report, you then sign the preliminary contract and at this stage you will be expected to pay the required deposit. On a resale property, this is typically 10% and on an off-plan (new) property you must expect to pay varying amounts of around 30%.

If necessary, at this point in the process the vendor is required to apply for permission for you to purchase a property in Turkey.

With off-plan property purchases in Turkey the buyer may be expected to pay a number of stage payments throughout the construction process.

Completion

Once all parties are ready to proceed the property sale is completed. The buyer pays the required tax payments and the final contract or deed of sale (Tapu) is signed. The signing of this document means that the land ownership is transferred to the buyer. This is usually done at the land registry office.

Once signed, the deed of sale (Tapu) is registered in the land registry.

Off-Plan Security For Buyers

In Spain and most other countries where full or part payment is made before the property is fully constructed, a bank guarantee must be in place to ensure that should the developer go bankrupt before completion of your property, your money is 100% safe.

In Turkey this is not a requirement and owing to the early stage of the overseas property market in Turkey and the comparatively immature banking systems such guarantees are either impossible or very expensive.

This makes it extra important to work with developers with proven track records and of substance that can offer quality property and run no risk of running out of capital during the construction phase of a project.

• Reputable developers with a proven and established track record are provided by all our selected IPIN developments in Turkey.

Please watch this space for details coming soon.

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