Can foreigners buy property in India? A complete guide

Key Takeaways

• Non-resident Indians (NRIs) and Overseas Citizens of India (OCIs) have more flexibility in purchasing property in India compared to foreign nationals without Indian ties.
• Foreign nationals generally face restrictions concerning agricultural land, plantation properties and farmhouses.
• Foreign nationals usually need prior approval from the Reserve Bank of India (RBI) to purchase immovable property in India.

Owning property is a universal aspiration and India’s growing real estate market offers enticing opportunities for foreign buyers. The country’s property landscape caters to various tastes and budgets. Here you can spot sleek apartments in Mumbai or serene villas in Goa.

The question is, can foreigners buy property in India? Yes, they can. However, there are specific regulations to follow and restrictions you must navigate. Non-resident Indians (NRIs) and Overseas Citizens of India (OCIs) have more freedom to purchase residential and commercial properties without prior approval. 

Foreign nationals without Indian roots face stricter limitations, especially regarding agricultural land and plantation properties. In this guide, we’ll cover the legal requirements and the documents to obtain so you can choose the best locations and ensure compliance with Indian laws.

Read on to learn how to own property in India as a foreigner.

Legal Framework for Foreigners Buying Property in India

The Foreign Exchange Management Act (FEMA) manages foreign entities’ acquisition and transfer of immovable property in India. Under FEMA, the regulations differ based on the individual’s residency status and origin.

For instance, Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs) can purchase residential and commercial properties without prior approval. Still, they are prohibited from buying agricultural land, plantation properties or farmhouses. 

On the other hand, foreign nationals of non-Indian origin residing outside India cannot acquire immovable property in India without approval from the Reserve Bank of India (RBI), except when acquiring property by inheritance from an Indian resident.

What Are the Required Documents?

Foreign buyers, including NRIs and OCIs, must provide the following documents when purchasing property in India:

• Passport and Visa: The passport is a mandatory identification document and the visa shows your status as an international resident (or in the case of NRIs/OCIs, confirms your non-resident status). Foreign nationals must provide visa details showing their entry and purpose of stay in India.
  
  
• Overseas Citizenship of India (OCI) Card: The OCI card allows the holder to own property and engage in property transactions in India, subject to the same terms as NRIs. Foreign nationals of Indian origin must demonstrate their eligibility to purchase property through this card.
  
  
• PAN (Permanent Account Number) Card: You need a PAN card to file taxes, register the property, and ensure your purchase is legally documented. 
  
  
• Proof of Address: A proof of address helps verify the buyer’s residence status and prevents fraud or misrepresentation. Acceptable documents for proof of address include:
  
  
  • Utility bills (electricity, water, etc.)
  • Bank statements
  • Driver’s licence
  • Any other government-issued document showing your name and current address.
    
    
• Non-Resident External (NRE) and Non-Resident Ordinary (NRO) Bank Account: Buyers must have NRE or NRO accounts to enable funds transfer from abroad or to manage Indian earnings (such as rental income). 

These accounts are necessary for making property-related payments, paying taxes and ensuring foreign currency transactions comply with Indian regulations. 

An NRE account is often used for international funds, while NRO accounts are used for managing domestic income (such as rental income).

• Power of Attorney (if applicable): If you cannot travel to India to complete the property transaction, a Power of Attorney (PoA) can be provided to a representative to carry out the process. The PoA document must be notarised and registered in India. 
  
  
• Additional Documents (if applicable):
  
  
  • Sale Deed or Sale Agreement: The official document detailing the terms of the sale, including the price and payment terms.
  • Tax Returns: Some lenders or authorities may require proof of income or tax returns from the buyer’s home country for additional verification.

Ensure documents are in order before buying property in India to simplify the process and avoid legal issues.

Who Can Buy a Property in India? 

India’s property market is open to foreign buyers, but specific rules and regulations govern who can purchase property there. The eligibility largely depends on the buyer’s residency status and the type of property they wish to acquire. Here’s a breakdown of who can legally buy property in India:

• NRIs and OCIs: As mentioned, these individuals can buy residential and commercial properties without approval, but they cannot purchase agricultural land, plantations or farmhouses.
  
  
• Foreign Nationals Residing in India: Foreign nationals who have lived in India for over 182 days in the preceding year can buy property for residential use. Agricultural land and similar properties are off-limits.
  
  
• Foreign Companies and Embassies: Foreign companies with a business presence in India can buy property related to their operations. Embassies and diplomatic missions can also purchase property with clearance from the Ministry of External Affairs.

How Can a Foreigner Buy Property in India?

Buying property in India is a complicated process for foreigners, but with proper planning and knowledge, it can be a straightforward experience. Below are the steps for NRIs, OCIs and foreign nationals looking to buy property in India.

For NRIs and OCIs:

1. Identify the Property: 

First, decide if you want residential or commercial property, and assess if it’s for personal use, rental income, or long-term appreciation.

• Residential Properties: Apartments, villas or independent houses in cities or outskirts.
  
  
• Commercial Properties: Depending on the sector you wish to invest in, consider options like office spaces, retail stores, or industrial land.

Research the local real estate market thoroughly to ensure you’re investing in a location that aligns with your plans. Consider factors like infrastructure, demand, property appreciation potential and rental income.

2. Verify Legal Clearances:

Before purchasing, ensure the property has all necessary approvals from local authorities, particularly under the Real Estate (Regulation and Development) Act (RERA). 

• RERA Compliance: Ensure the property or project is registered with RERA for transparency and protection against builder delays.
  
  
• Title Clearance: The seller should have a clear and marketable title with no disputes. A legal verification process is necessary to confirm this.
  
  
• Encumbrance Certificate: Verify that the property is free from debts or legal issues.

3. Obtain a PAN Card:

A Permanent Account Number (PAN) card is mandatory for any financial transactions in India, including buying property. It’s also required for income tax purposes, such as declaring rental income or capital gains. Foreign buyers can easily apply for a PAN card through the official Indian tax website or authorised agencies.

4. Open an NRE/NRO Account: 

As an NRI or OCI, you’ll need an NRE (Non-Resident External) or NRO (Non-Resident Ordinary) bank account funds transfer and other property transactions.

• NRE Account: Used for repatriating funds back to your home country.
  
  
• NRO Account: Used to manage income generated within India, such as rental income, pensions or dividends.
  
  

Check that the account is active before transferring any funds for the property purchase.

5. Execute the Sale Deed: 

Once all due diligence and financial arrangements are in place, you can begin signing the Sale Agreement. This legally binding contract outlines the purchase price, terms and conditions and other transaction details.

• Sale Deed: The final document that officially transfers ownership. It must be registered with the local Sub-Registrar’s office for the transaction to be legally recognised. The deed must be signed in the presence of witnesses and the registration fee will depend on the property’s value.

For Foreign Nationals:

1. Seek RBI Approval:

Foreign nationals without an Indian connection must seek prior approval from the Reserve Bank of India (RBI) before buying property in India. Apply with the RBI and demonstrate that the investment complies with the rules set forth by FEMA (Foreign Exchange Management Act). 

2. Demonstrate Residency:

Foreign nationals must prove that they have been living in India for at least 182 days in the preceding financial year under a valid visa. This is essential for acquiring property in India. Valid visas may include student, employment, business or long-term visas.

3. Comply with FEMA Regulations:

Foreign nationals must ensure compliance with all provisions of the Foreign Exchange Management Act (FEMA). This includes ensuring that the acquisition does not violate regulations concerning the repatriation of funds or foreign investments in Indian real estate.

• Foreign nationals can purchase residential property for personal use, not agricultural land, plantations or farmhouses.
• Any property foreign nationals purchase must be for residential purposes only and cannot be used for business or agricultural activities.

Financing Options for NRIs and OCIs

Foreign nationals must follow capital gains tax and fund repatriation rules when selling property. Proceeds can be repatriated under specific guidelines.

Financing options for foreigners buying property in India are limited due to regulatory restrictions. However, Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs) have access to financing through Indian banks, while foreign nationals face stricter limitations.

NRIs and OCIs can apply for home loans from Indian banks subject to certain conditions:

• Loan Eligibility: Most banks provide loans to NRIs/OCIs only for residential properties (not agricultural land, farmhouses or plantation properties).
  
  
• Loan Amount: Banks typically finance up to 80% of the property value, with the buyer covering the remaining 20% as a down payment.
  
  
• Repayment Mode: Loan repayments must be made through Non-Resident External (NRE) or Non-Resident Ordinary (NRO) accounts via banking channels.
  
  
• Required Documents: Passport, visa, PAN card, proof of overseas income and an NRI bank account in India.

Financing Options for Foreign Nationals

For foreign nationals of non-Indian origin, obtaining financing in India is extremely difficult due to strict RBI regulations. Key points to consider:

• No Access to Home Loans: Indian banks do not typically offer home loans to foreign nationals who are not NRIs/OCIs.
  
  
• Full Cash Payment: Foreign buyers must finance the purchase entirely with cash—no mortgage or loan facilities are available.
  
  
• Large Money Transfers: Funds must be legally remitted to India through banking channels in compliance with Foreign Exchange Management Act (FEMA) regulations.

Alternative Financing Options

• International Financing: Some foreign investors take loans from international banks in their home countries to finance property purchases in India.
  
  
• Private Lenders: In rare cases, private lenders or developers may offer financing options, but these often come with higher interest rates and risks.
  
• Joint Purchase with an NRI/OCI: Foreign nationals can co-own property with an NRI or OCI relative who qualifies for financing in India.

How to Buy a House in India: Practical Tips

Buying property in India as a foreigner can be rewarding, but it requires navigating specific legal regulations and financial considerations. Here’s a step-by-step guide to help you through it.

Step 1: Determine Your Eligibility and Legal Restrictions

The first step is to understand who can buy property in India.

• NRIs and OCIs can freely purchase residential and commercial properties in India without prior approval from the Reserve Bank of India (RBI).
  
  
• Foreign nationals without an Indian connection (not NRI or OCI) cannot purchase property in India unless they have lived there for more than 182 days in the previous financial year under a valid visa.
  
  
• Agricultural land, plantation properties and farmhouses are restricted to foreign buyers, including NRIs and OCIs.

Before proceeding, ensure you meet the legal requirements to avoid complications later.

Step 2: Choose the Right Location

The best cities for buying property in India depend on your purpose—whether for personal use, rental income or long-term investment.

Best Cities for Foreign Buyers: 

• Mumbai – India’s financial capital, offering luxury apartments and high rental demand.
  
  
• Delhi NCR – A growing hub with commercial and residential real estate opportunities.
  
  
• Bangalore – Ideal for tech professionals and investors due to the booming IT sector.
  
  
• Goa – Popular for vacation homes and rental properties.
  
  
• Hyderabad – Offers affordable housing with strong infrastructure and growth potential.
  
  

Consider connectivity, infrastructure, property appreciation and rental demand when choosing a location.

Step 3: Secure Financing and Plan Your Payment

Once you’ve decided on a property, the next step is to plan your financing and payment options.

• NRIs and OCIs can take out home loans from Indian banks, but foreign nationals typically cannot avail of financing unless they have special permission from the RBI.
  
  
• Funds must be transferred through an NRE (Non-Resident External) or NRO (Non-Resident Ordinary) account in compliance with FEMA (Foreign Exchange Management Act).
  
  
• If you’re making a large money transfer, use a secure and regulated channel to avoid legal issues.

Step 4: Hire a Real Estate Agent and Lawyer

Hiring a trusted real estate agent and a lawyer can simplify the process. Here are some ways where they can help:

• A real estate agent can help you find verified properties and negotiate deals.
  
  
• A property lawyer will review all legal documents, including the Sale Deed, Title Certificate and Encumbrance Certificate, to ensure the property has no disputes or outstanding loans.

Step 5: Conduct Due Diligence and Legal Verification

Before making an offer, conduct a thorough legal and financial verification of the property.

• Title Verification: Ensure the seller has a clear title to the property.
  
  
• Encumbrance Certificate: Check for existing mortgages, legal disputes or unpaid dues.
  
  
• RERA Compliance: Ensure the project is registered with Real Estate (Regulation and Development) Act (RERA) when buying from a developer.
  
  
• Utility Dues & Property Taxes: Ensure all bills and taxes are cleared before finalising the purchase.

Step 6: Make an Offer and Sign the Agreement 

Once satisfied with the due diligence, you can make an offer.

• Your real estate agent will negotiate the price on your behalf.
  
  
• Once an agreement is reached, you will sign a Sale Agreement outlining the purchase price, payment terms and timeline.
  
  
• You may need to pay an initial deposit (often 10-20% of the property price) to secure the deal.

Step 7: Complete the Payment and Register the Property 

The final step involves full payment and registration.

• Ensure all payments are made through your NRE/NRO bank account or an approved business money transfer service.
  
  
• The property must be registered at the Sub-Registrar’s Office and stamp duty and registration fees must be paid (varies by state).
  
  
• Upon registration, you will receive the Sale Deed, officially transferring ownership to you.

Step 8: Managing Taxation and Repatriation Rules

Foreign buyers should know tax implications and rules for large money transfers to India or repatriating funds.

• Rental income from property is taxable in India under Income Tax Act regulations.
  
  
• Capital gains tax applies if you sell the property. The tax rate depends on the holding period:
  
  
  • Short-term capital gains (STCG): If the property is sold within 2 years of purchase, the gains are considered short-term and taxed at 30% (plus applicable surcharge and cess).
    
    
  • Long-term capital gains (LTCG): If the property is sold after 2 years, the gains are considered long-term and are taxed at 20% with indexation benefits.
    
    
• Repatriation Rules: Once the tax obligations are cleared and the necessary documents are in order, the buyer can proceed with the repatriation process by transferring funds through authorised banks and financial institutions.

Banks authorised by the Reserve Bank of India (RBI) will facilitate fund transfers and ensure compliance with FEMA regulations.

The buyer must submit the necessary forms to the bank, proof of tax compliance and documentation related to the sale. Here are the key forms typically required:

• Form 15CA: A tax compliance declaration confirming the proper tax has been paid on the sale proceeds.
  
  
• Form 15CB: A certification from a chartered accountant confirming that tax obligations, like capital gains tax, have been met.
  
  
• FEMA Declaration: A declaration ensuring the transaction complies with India’s foreign exchange rules.
  
  
• RBI Approval (if applicable): Foreign nationals must get approval from the RBI to repatriate funds.
  
  
• Sale Deed and Proof of Sale: Documentation proving the property sale, including the agreement and payment records.
  
  
• Tax Payment Receipts: Proof of tax payment on the sale proceeds.
  
  

In cases where the buyer’s home country has a Double Taxation Avoidance Agreement (DTAA) with India, the buyer may be able to claim relief from being taxed twice on the same income. This could lower the overall tax burden when repatriating funds back to the home country.

Final Thoughts 

Buying property in India as a foreigner might seem tedious, but it’s more accessible than you think. You don’t need Indian citizenship to purchase property and with the proper legal framework, foreign buyers can easily navigate the process.

Whether looking for an investment property, a second home or a place to retire, India’s wide real estate market offers plenty of opportunities.

Services like Instarem can make money transfers more straightforward and affordable when managing your international funds. Send money to India through Instarem, to grow your property portfolio without stressing over currency exchange or high transaction fees.

Why choose Instarem for your property investments in India:

• Low fees with no hidden charges—keeping your costs down.
• Better exchange rates than traditional banks help you save more.
• Complete transparency throughout the transaction process.
• Easy tracking of your transfers, so you always know where your money is.

Make investing in Indian real estate smoother with Instarem—efficient, transparent and hassle-free. Start managing your international payments today and invest in your future with confidence.