Buying Property in India



The real estate market in India has witnessed a flurry of activity in the last decade or so. With new firms venturing in to construction and a burgeoning demand for housing that is luxurious yet low cost prospective buyers will indeed be spoilt for choice. This apart, foreigners need to beware of red tape involved in property transfer. Legal complications in property purchase and time consuming procedures are major deterrents for most expats seeking to buy property in India. Ideally one should consider it only if one is going to live here permanently or for a fairly long period of time. 

The Indian states of Goa, Karnataka and Kerala are popular hotspots for people desirous of purchasing residential property in India. One can find good deals on apartments and office complexes in Hyderabad, Bengaluru and Mumbai. Property prices vary greatly and are dependent on the region and type of property.  

Real Estate market in India 

The internet is a great resource to look for properties in India. A number of real estate agencies offer services online. Be vigilant while selecting an agent to assist you and be prepared to shell out anywhere between 7-10% of the property price as the agent's commission. To find a real estate agent look up the Yellow Pages or the classifieds column in a number of reputed newspapers and magazines. Property exhibitions are held very frequently and a visit to such expos gives buyers an opportunity to explore their options better and very often directly with builders and developers.  


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Eligibility Conditions

In order to be eligible to buy property in India a foreigner must have a residence permit. This is mandatory. Holders of residence permits who have stayed less than 183 days in the country need permission from the Reserve Bank of India to purchase property. Persons of Indian Origin and Overseas Citizens of India are exempt from this requirement. Buyers also need to procure permission from local authorities. Be prepared to wait for several weeks for the permission to come through. 

Individuals can only buy residential property in India. In order to buy office space one has to set up his own company. is a great resource for information about legal requirements for property purchase in India. 

There are a number of grey areas involved in property purchases by foreigners in India which is why hiring a lawyer is highly recommended. Good legal advice will ensure safety of investment and peace of mind.  

Documentation & Procedure

Once you like a property and have negotiated on the price ask your lawyer to check all documents of title and do not make any payment without consulting him. An agreement of sale must be drawn up and signed by both parties. At this time a deposit @ 10-20% of the property price must be paid. Always insist on a receipt for this amount. Ask your lawyer to investigate in to the seller's title to the property and whether there are any outstanding mortgages on the property. The seller should give you a no encumbrance certificate stating that the property in question is not already mortgaged.

Once all documents are approved they will have to be stamped at the Stamp Duty Office. After this is done and all papers have been signed by both parties the balance amount will have to be paid. The property will have to be registered with the Registry of Deeds. 

Costs Likely to be incurred

Agents commission at 7-10% of property value, legal fees, stamp duty @ 4-14% , mortgage charges (if applicable) and registration fees @ 1-2% of the property price are some expenses that you will have to incure while buying property in India.  


Though foreigners are able to procure loans and mortgages from Indian banks, it is recommended that you get one from your home country instead. In India mortgages cover up to 85% of the property price and have duration of 10-15 years at an interest rate of 10-12.5%. Repayments including interest cannot exceed 50% of your total income. One can apply for new mortgages up to the age of 70.