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Thursday, June 13, 2024

Importance of NRI Home Loan: How to Buy Property in India from Abroad?

In an era where boundaries increasingly have become blurred and people are considering global opportunities, the goal of becoming a homeowner transcends geographical barriers. For the NRIs or the non-resident Indians, the desire of owning a home in India, the homeland, is usually filled with longing and nostalgia. However, the distance and logistical challenges involved in the process of buying property from abroad can seem daunting. This is where the importance of NRI home loans, such as LIC home loans, comes into play. These loans provide NRIs with a feasible and convenient way to fulfil their dream of owning a home in India.

Home Loan: How to Buy Property To calculate their EMI and plan their finances, NRIs can utilise the LIC home loan EMI calculator.

Does it make sense to apply for a high loan amount? | Housing News

Importance of NRI home loan

Favourable interest rates

NRI home loans, such as LIC home loan, typically come with competitive interest rates compared to regular loans. It comes across as an attractive choice for the NRIs looking to make property investments in India. For example, Rupriya, an NRI staying in Australia, wants to buy a villa in Himachal. The favourable interest rates on the LIC home loan she obtains allow her to save a significant amount of money in interest payments over the loan tenure.

Financial assistance

NRIs often require financial assistance to purchase property in India due to the high costs involved. NRI property or home loans including the LIC home loans, provide necessary funds for bridging the presence of financial gap to invest in the preferred property. For example, Ramesh, an NRI residing in the US, looks to purchase a flat in Bombay. With the assistance of a home loan, he can avail necessary funding to fulfil his dream of owning a home in India.

Tax benefits

NRIs can avail tax benefits on both the principal amount and the interest paid on NRI home loans, subject to certain conditions. This serves as a significant incentive for NRIs to invest in property in India and reduces their overall tax liability. For example, Deepa, an NRI residing in Australia, decides to invest in a residential property in Delhi. The tax benefits on her LIC home loan help her optimise her tax planning and reduce her taxable income.

Flexible repayment options

NRI home loans, including LIC home loans, offer flexible repayment options, allowing NRIs to choose a repayment schedule that suits their financial situation. This flexibility ensures that NRIs can comfortably manage their loan repayments while living abroad. As an example, Amit, an NRI based in the United Kingdom, plans to buy a plot of land in Bengaluru. The flexible repayment option on his LIC home loan enables him to align his loan instalments with his income cycles, ensuring a hassle-free repayment process.

Emotional connection

Becoming a property owner in their home country holds considerable sentimental value for NRIs, as this permits them to maintain a close connection with their roots and offer a sense of belonging. NRI home loans, such as LIC home loans, facilitate the fulfilment of this emotional connection by enabling them to own property in their homeland. For instance, Ravi, an NRI residing in the United States, feels a deep emotional bond with his hometown in Kerala. With the help of a LIC home loan, he can purchase a house there and create a haven where he can reconnect with his cultural heritage.

Legacy and inheritance

Investing in property in India through NRI home loans allows NRIs to build a legacy for future generations. It provides an opportunity to pass down valuable assets and wealth to their children or loved ones. For instance, Priya and Rahul, NRIs residing in the United Kingdom, decide to buy a residential property in their ancestral village in Punjab. They aim to preserve their family heritage and ensure a property that can be inherited by their children.

Retirement planning

For NRIs considering returning to India after their professional careers, owning a property through an NRI home loan can be a vital component of their retirement planning. It ensures they have a comfortable home awaiting their return and eliminates the need for immediate accommodation arrangements. For example, Sanjay, an NRI living in Canada, intends to retire in Bengaluru. By purchasing a retirement home with the help of an NRI home loan, he secures a peaceful and familiar environment for his post-retirement life.

How to buy property in India from abroad?

Research

Begin by conducting thorough research on the Indian real estate market and identifying the location, type of property, and budget that align with your investment goals.

Get in touch with a reliable agent

Seek the assistance of a reliable real estate agent or property consultant in India who can provide insights, guide you through the process, and help you find suitable properties.

Attorney power

Appoint a trusted representative or family member in India as your power of attorney (POA) to facilitate property transactions on your behalf. The POA should be legally registered and granted the necessary authority.

You may opt for NRI pre-approval home loan

Get pre-approval for an NRI home loan, such as an LIC home loan, from a reputable financial institution. This will give you a clear understanding of your budget and help streamline the property search process.

Authenticate the documents of the property

Before finalising a property, ensure that all legal documents, including title deeds, encumbrance certificates, and approvals from relevant authorities, are in order. Engage a lawyer to conduct a thorough due diligence process.

Check out a suitable home loan option

Complete the formalities of your NRI home loan application, such as LIC home loan, and provide the necessary documentation to the financial institution. Upon approval, the loan disbursal will be coordinated with the property purchase process.

Stamp duty and registration

Pay the required stamp duty and complete the property registration process as per state laws. This step ensures the legal transfer of ownership from the seller to the buyer.

Funds for repatriation

NRIs can repatriate the funds invested in India, subject to certain guidelines and restrictions outlined by the Reserve Bank of India (RBI). Familiarise yourself with these rules to facilitate the repatriation process when needed.

Get a completion certificate

After the property is constructed or developed, ensure that the builder or developer provides the completion certificate, signifying that the construction adheres to the approved plans and meets the necessary standards.

Opt for the property insurance

Protect your investment by obtaining property insurance. It safeguards your property against natural disasters, fire, theft, and other unforeseen circumstances, providing peace of mind.

Consider availing property management services

If you plan to keep the property vacant or utilise it for rental income, consider engaging a property management service to handle tenant screening, rent collection, maintenance, and other property-related matters.

Check out the tax compliance

Familiarise yourself with the tax laws and regulations in India. Ensure timely payment of property taxes and file income tax returns if applicable.

Conduct a constant property visit to India

Whenever possible, make periodic visits to your property in India to assess its condition, address any maintenance needs, and maintain a personal connection with your investment.

Conclusion

Owning a property in India holds immense significance for NRIs, bridging the gap between their homeland and their life abroad. NRI home loans, including LIC home loans, play a pivotal role in making this dream a reality by providing financial assistance, favourable interest rates, and flexible repayment options. NRIs, driven by their emotional connection, financial goals, and long-term planning, look to avail home loans in India to invest in a diverse range of properties. By following the outlined steps and utilising the guidance available, NRIs can navigate the process of buying property in India from abroad with confidence.

So, get on this journey, embrace your roots, and create a legacy through property ownership in the vibrant land of India. And with the convenience of the LIC home loan EMI calculator, NRIs can accurately plan their finances and make informed decisions while buying property in India. Let LIC home loans be your partner in realising your dream of owning a home in India.