When Anita, who lives in Dubai, finally decided to buy a flat in Gurugram, she thought it’d be straightforward: pick a city, choose a builder, wire the money, and celebrate. Fast forward a few weeks, and she was knee-deep in title checks, chasing a broker who’d gone quiet, and arguing with her bank over foreign transfer charges. She was annoyed and exhausted; it was a big wake-up call for her.
Anita’s experience isn’t seldom. In fact, NRIs are playing an increasingly significant role in India’s real estate market. According to NoBroker’s “NRI Real Estate Report 2023,” they accounted for 15 percent of real estate investments in 2023, up from 10 percent in 2019 to 2020, and this figure is expected to reach 20 percent by the end of 2025. At the same time, frauds targeting NRIs including forged documents and illegal property sales have been rising, making careful due diligence and protecting one’s investment more critical than ever. India’s real estate market is rewarding if you invest smart, not fast!
Here are 5 crucial things NRIs should check before investing in property in India:
1. Know exactly what you’re allowed to buy; don’t assume
This bit trips up so many folks. You can buy residential or commercial property, which is good, but here’s the important part: as an NRI, you usually cannot buy agricultural land, plantations, or farmhouses unless it’s gifted to you or inherited. That’s the rule, end of story. It sounds trivial until your dream “plot with a view” turns out to be farmland. It happens more often than you’d think, so it’s important to verify before committing.
So ask for the land classification document upfront, and if the seller or broker stalls, consider it a red flag and walk away. This is a significant financial commitment, and you must approach it with the highest level of due diligence and protect your interests accordingly.
2. Don’t trust Brand Names blindly; Check the Title and the Builder
Big developer name? Great, but definitely not a guarantee. Builders delay, paperwork gets messy, and projects can end up in disputes before you even know what’s happening. Many NRIs assume a famous brand means everything is clean, only to discover issues much later. So it’s safer to double-check everything rather than rely on reputation alone.
What to check (and actually get someone local to verify):
The title is clear, with no pending disputes or loans tied to the land.
RERA registration exists (if it’s a project) and is not optional.
Builder history, delays, quality complaints, customer reviews.
Bank approvals: if national banks have financed it, that’s usually a good sign.
Not every big builder is problematic, but it’s important to do your due diligence. Hire a property lawyer to verify all documents, including the encumbrance certificate, chain of title, and required approvals. If you cannot be in India yourself, make sure a trusted representative or professional does this on your behalf to avoid future legal or financial issues.
3. Don’t Be Fooled by the Quoted Price; Know the Real Cost
Builders will show a shiny, attractive number because that’s the lure. But in India, the real cost of buying property comes with a long list of add-ons. For NRIs, forex fees and currency swings can bite hard. Many buyers only realize how quickly these small charges stack up when the final payment looks nothing like the initial quote.
Make sure you add:
Stamp duty + registration
TDS at source on certain transactions
GST (if under construction)
Maintenance or society charges
Broker fee (if any)
Legal fees
Currency conversion and remittance costs
An honest heads-up: forex fees can change your total by a surprising amount if you’re not careful. So get a full cost sheet from the seller and from your lawyer or CA. Compare - don’t just nod and sign.
4. Taxes: Know them before you buy (not after)
Taxes are where people get jolted because rental income is taxable, capital gains are taxable, and TDS often gets deducted upfront. Most NRIs don’t think about this until money is already stuck or withheld. Planning early saves you from scrambling later.
Simple points for your convenience:
Rental income earned in India is taxable even if you live abroad.
Long-term capital gains kick in if you hold beyond the threshold (know the rules).
TDS rules often mean money gets withheld at sale. Refunds can take time.
You can claim deductions (like home loan interest), yes, even NRIs in many cases.
Repatriation of sale proceeds is possible but governed by RBI and FEMA rules, following paperwork.
A real nuisance: buyers sometimes deduct 20% TDS on the sale price when an NRI sells even if your real profit is tiny. So you could be waiting months for refunds. Plan for that.
5. Plan how you’ll pay and how you’ll repatriate later
This one’s quietly huge. You must make payments through NRE, NRO, or FCNR accounts because foreign currency or cash isn’t allowed. And the account you choose matters more than people realize since it affects how easily you can repatriate money later.
Quick guide:
NRE funds are fully repatriable (good if you want the option to move money back easily).
NRO = okay for local income, but repatriation has limits and requires documentation.
FCNR = fixed deposits in foreign currency, also used sometimes.
If you use the wrong account or don’t document the source, you’ll face headaches when you want your money back out. So, talk to your bank before you sign anything. Decide the route based on whether you’ll want to repatriate sale proceeds or rental income in the future.
Conclusion & a few quick bonus checkpoints
Buying property in India as an NRI can be one of the best moves you make, or it can be a never-ending headache. The difference? Preparation: A good local lawyer, a CA who knows NRI rules, and, frankly, some skepticism toward every “too good to be true” deal.
Bonus checkpoints before you sign or wire money:
Photos and videos aren’t enough. Visit the property. Or have a trusted relative visit.
Prefer RERA-registered projects.
Don’t pay the full amount until you have all approvals and sale deeds.
Keep digital and physical copies of every single document. Backup backups.
Get a CA experienced with NRI taxes. Saves you money and sleepless nights later.
Take your time and don’t rush just because someone says, “Everyone’s investing now.” We would suggest asking questions, checking all documents carefully, and being annoyingly thorough. It really helps avoid problems later. If you follow this approach, your investment will be safer, and you’ll feel confident knowing you made the right choice.
