A large share of the homes we build are bought by families living in the Gulf, Europe, North America and elsewhere. Some are coming back, some are buying for parents, some are investing. The process is well established, but the information online is either too general or written for a different state. This is how it works in Kerala, in practice.
What you can buy
Under FEMA, a non-resident Indian or an Overseas Citizen of India (OCI) cardholder can buy residential and commercial property in India without any special permission. The only exceptions are agricultural land, plantation property and farmhouses. A flat in Kochi is entirely straightforward.
How to pay
Payments must come through banking channels: an inward remittance from abroad, or from your NRE, NRO or FCNR account in India. Cash is not permitted, and traveller’s cheques and foreign currency notes are not permitted either.
This matters later. If you ever sell, the money you brought in through NRE or FCNR accounts can be taken back out, up to the original investment, for up to two residential properties. Money from an NRO account can be repatriated up to USD 1 million per financial year with a chartered accountant’s certificate. Keep every remittance record from day one; it is much harder to reconstruct ten years later.
Power of attorney
You do not need to be in India to buy, but someone does need to sign the registration on your behalf. That is done through a power of attorney, usually given to a parent, sibling or trusted friend in Kerala.
The power of attorney must be signed in front of the Indian consulate in the country where you live, or notarised there and then apostilled, depending on the country. Once it reaches Kerala, it must be adjudicated and stamped at the sub-registrar’s office within a set period. Get this document prepared early. It is the step that most often delays a registration.
A specific power of attorney, limited to this one purchase, is safer than a general one. Your lawyer can draft it.
Seeing the property without seeing it
You will want to see the site, and you may not be able to. What we do, and what you should expect from any builder:
- A live video walkthrough of the site and the specific flat, at a time that suits your time zone, not a pre-recorded reel.
- Progress photographs from fixed positions each month, so you can see change rather than a flattering angle.
- A visit by your representative, with the builder briefed to answer their questions as fully as yours.
- Drone footage of the site and surroundings, so you understand what is actually around the building.
If a builder will only send you a brochure and a rendered image, that tells you something.
Taxes you should know about
Buying. Stamp duty of 8% and registration of 2% apply exactly as they do for residents. GST of 5% applies to under-construction flats. If the flat costs more than ₹50 lakh, you must deduct 1% TDS from each payment to the builder and deposit it, which your representative or chartered accountant in India can handle.
Owning. Rental income from the flat is taxable in India, and the tenant must deduct TDS before paying you. Whether it is also taxable where you live depends on the double taxation agreement between India and that country.
Selling. When an NRI sells, the buyer must deduct TDS at a higher rate than for residents, on the full sale value. You can apply to the income tax department for a lower deduction certificate in advance. Plan this before listing the property.
The home loan question
Indian banks lend to NRIs, typically up to 75 to 80% of the value, with repayment through NRE or NRO accounts. Interest rates are broadly similar to resident loans. The paperwork is heavier: passport, visa or residence permit, overseas income proof and bank statements, and usually a co-applicant or guarantor in India.
What to insist on
- A single schedule of every payment from booking to keys, with dates.
- The K-RERA registration number, checked yourself on the K-RERA website.
- An independent title check by a lawyer of your choosing, not the builder’s.
- Written confirmation of exactly what is included: parking, fittings, and any charges at handover.
- A named person at the builder who is your point of contact throughout, and who answers email.
Our experience
A large share of the families in our buildings bought from abroad, most of them from the Gulf. We have registered flats for buyers who never set foot on site until the day they collected the keys. It works when the builder treats the distance as their problem to solve, not yours.
This is general information, not legal or tax advice. FEMA, tax and registration rules change; confirm the current position with a chartered accountant and lawyer before you commit.