Can I buy property in India with OCI? Practical steps

Can I buy property in India with OCI: the practical steps

1. PAN: apply if you do not have one.
2. Bank account: open an NRE or NRO account, or both.
3. Title search on the property.
4. Agreement reviewed and signed.
5. Payment through your NRI accounts or a home loan.
6. Registration in person with your OCI card and passport, or through an attorney.
7. Mutation of records into your name.

Documents an OCI holder needs

• OCI card and foreign passport.
• PAN card.
• Overseas address proof and any Indian address proof.
• Bank statements showing the source of funds.

Can OCI holders get home loans?

Yes. Banks and housing finance companies lend to OCI holders on terms similar to NRIs, with overseas income proof and repayment from NRI accounts or remittances.

Keeping your OCI card valid

Under the simplified rules, an OCI card needs reissue only once, when a new passport is issued after age 20. For other passport renewals, update the details online. Your OCI should match your passport at registration.

Buying from abroad with an OCI card

If you cannot travel, sign a specific power of attorney before a notary with an apostille, or at an Indian mission, and have it stamped in India within three months of arrival. Your attorney can then sign the agreement, pay from your account and register the deed. Limit the powers to that one purchase.

Tax points for OCI property owners

If you are not resident in India for tax purposes, rent from Indian property is taxed in India and the tenant deducts tax before paying you. When you sell, the buyer deducts tax at the non-resident rate, and a lower deduction certificate can reduce it to your real liability. Your country of residence may also tax the income, with credit for Indian tax under the treaty; confirm with your accountant there.

Repatriating money when you sell

Sale proceeds go to your NRO account. If you paid for the property from NRE or FCNR funds, you can repatriate up to the amount paid in foreign exchange, for up to two residential properties. Other proceeds can be remitted up to USD 1 million per financial year, with the required forms and a chartered accountant's certificate. Keep the original payment records from the purchase; they are what make repatriation straightforward later.

Common mistakes OCI buyers make

• Paying from a foreign account directly to the seller without routing it through Indian banking channels.
• Letting the OCI card and passport details fall out of step before registration.
• Agreeing to a 'farm plot' that is agricultural land in the records.
• Giving a relative a general power of attorney that outlives the purchase.

What can OCI holders buy?

Residential and commercial property, but not agricultural land or farmhouses. See can OCI buy property in India for the rules.