- NRIs can co-own residential and commercial property with residents.
- State each owner's share in the sale deed.
- If shares are not stated, they are generally in proportion to contribution, and equal if contribution cannot be traced.
- Each co-owner is taxed on their share of rent and gains.
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Can NRI buy property jointly with resident Indian under FEMA?
Yes. The NDI Rules allow NRIs and OCIs to acquire residential and commercial property, alone or jointly. The NRI's share must be paid through banking channels or NRI accounts; the resident pays from their own funds.
Ownership share in the sale deed
State each owner's share clearly. Where the deed is silent and the owners paid from separate funds, Section 45 of the Transfer of Property Act presumes shares in proportion to the money each contributed; if that cannot be shown, equal shares are presumed. Clear shares avoid disputes and tax confusion.
Joint home loan for an NRI and a resident
Banks lend jointly to NRIs and residents, often requiring all co-owners to be co-borrowers. Repayment can come from both. Check how the bank treats the NRI's income and documents.
How is joint property taxed?
Each co-owner is taxed on their share of rent and capital gains. When the property is sold, the buyer deducts tax at source on the NRI's share at non-resident rates.
What happens on death?
Each co-owner's share passes under their will or the succession law. Joint ownership is not automatic survivorship in India unless the documents provide for it. Each co-owner should make a will.
Gifting your share later
An NRI co-owner can gift their share of residential or commercial property to a relative by a registered gift deed. Stamp duty depends on the state, and some states charge less for gifts within the family. Agricultural land is different: it cannot be gifted to an NRI, though an NRI holding such land can gift it to a resident.
Selling when one co-owner is abroad
All co-owners must sign the sale deed, or their attorney holders must. The NRI co-owner signs a power of attorney abroad, and the buyer deducts tax at source on the NRI's share of the price. Agree in advance how the price will be divided and paid into each owner's account.
NRI buying property with parents in India
A common arrangement is a flat bought jointly with parents. Decide in advance who will live there, who pays outgoings, and what happens when parents pass away, and write it down. See can NRI own property in India.
Founder and Managing Partner, VIVS Legal. BLS, LL.B, LL.M, PGDBM, JAIIB.
