Are you interested in buying property outside India?

Reserve Bank of India (RBI) vide Foreign Exchange Management (Acquisition and transfer of immovable property outside India) Regulations, 2015 have framed provisions for prohibiting, restricting or regulating the acquisition or transfer of immovable property outside India by persons residents in India. Let’s take a look at the provisions by which property can be purchased/ acquired by a person resident in India. 

The modes through which property can be purchased/acquired outside India:

1. Pursuant to Section 6(4) of Foreign Exchange Management Act (FEMA): An individual Resident Indian can hold immovable property situated outside India, if property was acquired when that individual was Non Resident Indian.
2. A resident individual  acquires the property as an Inheritance/ gift from a person
3. Remittance out of Resident Foreign Currency (RFC) account
4. An individual resident receives the Gift from persons at (b) & (c) above, provided he is a relative of such persons
5. An individual resident Indian acquires/purchases property Under Liberalised Remittance Scheme (LRS)  - Under the LRS, Authorised Dealers may freely allow remittances by resident individuals up to USD 2,50,000 per Financial Year (April-March) for any permitted current or capital account transaction or a combination of both.  The restrictions mentioned in Immovable Property Regulations do not apply to acquisition of property outside India by a person resident in India on a lease not exceeding five years.
6. An individual resident Indian acquires/purchases property jointly with a resident relative  -  Remittances under the LRS can be consolidated in respect of family members subject to individual family members complying with its terms and conditions. However, clubbing is not permitted by other family members for capital account transactions such as opening a bank account/investment/purchase of property, if they are not the co-owners/co-partners of the overseas bank account/ investment/property Resident individuals are permitted to include resident relative(s) as joint holder(s) in their Resident Foreign Currency account on ‘former or survivor’ basis. However, such resident Indian relative joint account holder shall not be eligible to operate the account during the life time of the resident account holder.
7. Individual resident with Non Resident relative:- An Individual resident Indian can acquire immovable property outside India jointly with a relative who is a person resident outside India, provided there is no outflow of funds from India.
8. Indian company having overseas offices