Indian real estate sector is holding great investment opportunities for multiplying portfolios of NRI section. The sector has been on its revival stage after the implementation of several proactive reforms including the Real Estate Bill. These reforms have brought more transparency and credibility to our centuries old real estate sector. The property prices across various micro markets of real estate have self corrected and have bottomed up. Factors like inventory pile up and sluggish sales for the past few years had lead to the accumulation of consumer demand from the lowest level itself.
As the silver lining has finally happened after years of wait, considerable investors are now gathering their momentum to invest in real estate. Developers are also calling them by offering better property deals with attractive payment plans like CLP (Construction Linked Payment Plans), subvention plans and much more. Owing to the strict buyer friendly norms in the new real estate bill like allocating money for a particular project as an separate escrow amount, which can be only used for the construction purpose of the same project, investors can now assure that they will be getting timely results for their investments. I any cased of delay of possession, developers are also bound to pay penalty to investors.
Centre has also proposed changes to the existing NRI norms to serve the investment dreams of NRI community and to open up substantial benefits for investors abroad. Following points will reveal that time is never to get perfect for NRI investors to call for action in Indian real estate sector.
NRI Investment Norms Eased
- Centre has approved the proposal which states that NRI investments are also to be deemed as investments made by domestic investors.
- The proposal is stated for both OCI (Overseas Citizen of India) card holders and PIO (Persons of Indian Origin Card) holders.
- The home lending rates are considerably reduced by RBI (Reserve Bank of India) with special privileges for women buyers.
- Due to the cascading effect of recession that happened years ago, the property prices have become stagnant and are presently at a price range that prevailed around three years ago.
- There is no price differentiation while accruing properties for both domestic as well as overseas investors.
- NRI’s who have any land parcels or properties inherited in major cities can enter into real estate sector for their desired income generation.
- NRI’s can engage in joint venture agreements with developers to transform their land or properties to income generation assets.
- Many projects are being launched in India with attractive pre-launch offers by developers to reduce their working capital needs.
- An average NRI can look for 20-25 per cent returns by investing in a project that takes atleast 2 years for completion.
- Medium term investors can engage in plotted development investments to gain a compounded growth rate of 25-30 per cent annual growth.
- In commercial real estate sector, smaller investments are considerable available in the property market. While, the threshold limit of these investments vary from 5 Crore to 10 Crores.
- RBI has ruled that NRI’s can buy, sell, inherit or gift immovable assets in India, excluding properties like agriculture lands, plantation and farmhouses.
- CBDT (Central Board of Direct Taxes) has issued a statement that tax payers don’t need to file a wealth tax return from the assessment year 2016-17.