NRI Buying / FEMA / Loans / Repatriation

NRI Buying Property in India: The Complete 2026 Legal & Tax Playbook

2026-06-16 · PropXplor

You are settled in New York, London or Dubai, your earnings are strong, and you want a foothold back home — a flat in Mumbai, an office floor in Pune, a place for your parents in Bangalore. The good news first: as an NRI, buying property in India is entirely legal, and you do not need any special permission from the Reserve Bank of India to do it. The reality second: the rules around what you can buy, how you fund it, and how you eventually take your money back out are precise, and getting them wrong is expensive.

This is the pillar guide to the whole journey. Read it once and you will understand the legal map, the money flow, the paperwork and the tax — the four things that actually decide whether your purchase is clean.

Modern residential towers against a city skyline at dusk

What an NRI can and cannot buy

Under the Foreign Exchange Management Act (FEMA), the line is simple and rarely changes:

You can buy any amount of residential and commercial property in India. There is no cap on the number of units you may own.
You cannot buy agricultural land, plantation property or a farmhouse. This prohibition applies to both NRIs and OCI cardholders.

There is one important exception to the farmland rule: you can inherit agricultural land, or receive it as a gift from a resident Indian relative. You simply cannot purchase it. If a "villa plot" or "farm plot" is marketed to you, verify the land's classification before you part with a rupee — a residential title is what you want, not agricultural land dressed up as a lifestyle product.

The money flow: funding your purchase the FEMA-compliant way

This is where most first-time NRI buyers slip. The single rule that governs everything is this: every rupee must move through proper banking channels. Cash payments, or money routed through informal channels, are not permitted.

In practice, you fund the purchase from one of three accounts:

NRE (Non-Resident External) — funded by your foreign earnings; fully repatriable.
NRO (Non-Resident Ordinary) — for India-sourced income (rent, dividends); repatriation is capped.
FCNR (Foreign Currency Non-Resident) — a foreign-currency deposit; also usable.

Your booking amount, down payment and EMIs must all be debited from one of these accounts. Direct payments from a foreign bank account to an Indian seller or builder are not allowed — the money has to land in your NRE/NRO/FCNR account first, then flow onward. Keep every remittance record. The account you pay from determines how much you can eventually take back out, so this choice is strategic, not clerical.

If you need a home loan

NRIs are well served by Indian lenders. A few essentials for 2026:

Loan-to-value typically runs 75–90% of the property value, so budget for a 10–25% down payment from your own funds.
The loan is disbursed in INR and credited toward the property; it cannot be credited to a foreign account.
Repayment must come through inward remittance or from your NRE, NRO or FCNR account — never a direct foreign transfer.
Lenders assess your overseas income, employment stability and credit profile. A clean, documented income trail abroad is your biggest lever on eligibility and rate.

RERA: your first line of defence

Before you look at price, look at registration. The Real Estate (Regulation and Development) Act, RERA, requires every qualifying project to be registered with the state regulator. From abroad, the RERA portal is your most powerful tool — and it is free.

For any under-construction project, pull the RERA registration and verify:

The registration number and that it is active, not lapsed.
The promised completion date and the construction status filed by the builder.
The approved layout and carpet area (RERA prices are quoted on carpet area, not super built-up).
Any complaints or orders against the promoter.

A project that is not RERA-registered when it should be is not a bargain — it is a red flag.

The documentation that actually protects you

A glossy brochure is marketing. These documents are protection. Insist on seeing, and independently verifying:

Title deed — establishes clean, marketable ownership with no breaks in the chain.
Encumbrance Certificate — confirms the property is free of loans, liens or legal dues.
Approved building plan and Occupancy/Completion Certificate — for ready property.
Khata / property tax records — confirms civic registration and that dues are clear.
RERA certificate — for under-construction homes.

For an NRI buying remotely, title and encumbrance verification by an independent lawyer is non-negotiable. You are not on the ground to sense what feels off, so the paperwork has to do that work for you.

Architect reviewing property plans and legal documents on a desk

Power of Attorney: buying without flying back

You rarely need to be physically present for the whole transaction. A registered Power of Attorney (PoA) lets a trusted person in India act on your behalf.

Prefer a Specific PoA over a General PoA — it limits your representative's authority to defined, transaction-related tasks, which is far safer.
The PoA must comply with the Power of Attorney Act, 1882 and the Indian Registration Act, 1908.
Execute it abroad, get it notarised in your country of residence or attested at the Indian Embassy/Consulate, then have it adjudicated and registered in India.

Choose your PoA holder as carefully as you choose the property. This document hands real authority to another person — keep its scope narrow and time-bound.

The tax and registration costs you must budget for

Two cost layers sit on top of the headline price.

Stamp duty and registration: paid at registration, this varies by state. In Maharashtra and Karnataka, stamp duty is broadly in the 5–7% range, with registration charges on top. Some states offer a rebate when the buyer is a woman — a legitimate way to trim costs if title is held accordingly.

TDS when you buy from a resident: if the property value exceeds ₹50 lakh, you deduct 1% TDS on the purchase consideration and deposit it against the seller's PAN. (Note the asymmetry for later: when you eventually sell as an NRI, the buyer deducts TDS at a much higher rate on your capital gains — a long-term holding plus surcharge and cess can run into the mid-teens as an effective rate. Plan your exit before your entry.)

Repatriation: getting your money back out

For globally mobile professionals, this is the question that should be answered before you buy, not after.

If you funded the purchase via NRE account or fresh foreign remittance, sale proceeds up to your original investment can be repatriated freely.
Repatriation of the gains (and of NRO-account balances generally) is capped at USD 1 million per financial year, and requires tax clearance.
Free repatriation of sale proceeds is limited to two residential properties; for commercial property there is no such limit.
To remit, your bank will need Form 15CA and a CA-certified Form 15CB.

The discipline is simple: pay from an NRE account or document your foreign remittance meticulously, and your exit stays clean. Get sloppy on the funding side and you create a repatriation problem for your future self.

Where an rigorous buyer-side advisor changes the outcome

From abroad, your real risk is not the law — it is information asymmetry. You are relying on a builder's sales team or a broker who earns commission from the seller. Their incentive is the deal, not your downside.

This is precisely the gap PropXplor is built to close. We work only for the buyer — across Mumbai, Thane, Navi Mumbai, Pune and Bangalore. Your dedicated advisor verifies RERA, title and encumbrance, runs each shortlisted property through PropScore, our 80+ data-point report that grades location, builder track record, legal cleanliness and pricing against the market, and brings you a curated shortlist — so you evaluate a handful of genuinely sound options instead of a hundred listings you cannot inspect in person. Rigorous, architect-verified, entirely on your side.

Frequently asked questions

Can an NRI buy property in India without RBI permission? Yes. NRIs and OCIs can purchase residential and commercial property freely, with no special RBI approval — only agricultural land, farmhouses and plantation property are off-limits.

Can an NRI buy agricultural land in India? No. FEMA prohibits the purchase of agricultural land, farmhouses and plantation property by NRIs and OCIs. You may, however, inherit such land or receive it as a gift from a resident Indian.

How can an NRI buy property without travelling to India? By executing a registered Power of Attorney — ideally a Specific PoA — in favour of a trusted person in India, notarised or embassy-attested abroad and then registered in India.

How much down payment does an NRI need for a home loan? Lenders typically finance 75–90% of the property value, so plan for a down payment of 10–25% from your own funds, routed through your NRE, NRO or FCNR account.

Can an NRI repatriate the full sale proceeds later? Proceeds up to your original investment are repatriable if you funded the purchase via NRE/foreign remittance. Gains and NRO balances are capped at USD 1 million per financial year, with Form 15CA/15CB and tax clearance.