REAL ESTATE

Real estate as the term suggests refers to buying, selling, or renting any type of property which includes residential, commercial, agricultural and industrial. It is imperative for a entity or an individual to understand the nuances of this volatile market. Whether you are buying, selling or leasing; you must know the risks involved and legal considerations.

Important points for any real estate transaction

  • Complete due diligence of the subject property.
  • All registered deeds and documents must be in place.
  • Seek professional and legal guidance for drafting of documents and conducting a title search.
  • Agreement to Sell must be legally binding.
  • Advice on tax must be sought before entering into any transaction.
  • If transacting through a power of attorney; please ensure the registering authorities accept the transactions through a power of attorney.

Guidelines for Non Resident Indians/Overseas Citizens/Persons of Indian Origin

  • Non Resident Indians/Overseas Citizens/Persons of Indian Origin can inherit any immovable property in India (residential/ commercial/agricultural land/a farmhouse).
  • NRI are not entitled to purchase/ buy agricultural/farm land
  • There is no tax payable at the time of inheritance since the Estate Duty is now abolished.Similarly for any property received by way of a gift for which the value is more thanFifty Thousand Rupees, the recipient has to include the market value of such property unless he is among the specified relatives of the donor.
  • In case the NRI keeps the inherited house for personal use, no tax is payable. Where there is rental income drawn from the property; income tax return must be filed.
  • Foreign nationals are not permitted to acquire any immovable property in India, unless inherited from a resident in India. However he cannot sell or transfer such property, without prior permission of the RBI.
  • For a sale of property, tax is payable on the income earned from the inherited property. The tax payable is long-term capital gains @ 20%, or tax benefits by purchasing a new house or invest in capital gains bonds such as Rural Electrification Corporation or National Highways Authority of India or Power Finance Corporation and Railway Finance Corporation.
  • Sale proceeds up to one million dollars after payment of applicable taxes in India can be repatriated.

Property Due Diligence & Verification

  • Title Search and Verification: Conduct a thorough title search to ensure the property is free from encumbrances, disputes, or legal issues. This ensures the NRI’s interest in the property is protected.
  • Verification of Documents: Ensure that all documents related to the property, such as sale deeds, ownership records, tax receipts, and encumbrance certificates, are accurate, up to date, and legally valid.
  • Zoning and Land Use Compliance: Check compliance with local zoning laws, including land-use restrictions for agricultural, residential, commercial, or industrial properties.

Drafting & Legal Assistance for Real Estate Transactions

  • Agreement to Sell & Sale Deeds: Prepare and review agreements to sell or sale deeds, ensuring that these contracts comply with Indian real estate laws, protect the interests of the NRI, and are legally binding.
  • Power of Attorney (PoA) Services: If an NRI is transacting through PoA, the legal firm ensures that the PoA is drafted correctly, registered as per Indian law, and is accepted by the relevant authorities.
  • Gift Deeds and Inheritance Documentation: Assist in the drafting and registration of gift deeds, succession certificates, and legal heir certificates required for property inheritance.

Taxation and Financial Advisory

  • Capital Gains Tax Advisory: Provide guidance on long-term and short-term capital gains taxes on property sales. Assist in planning to minimize tax liabilities by exploring exemptions such as under Sections 54 and 54F of the Income Tax Act.
  • Income Tax Filing & Compliance: Help NRIs file income tax returns related to rental income, sale proceeds, or income from inherited properties. Ensure compliance with tax laws regarding property income and capital gains.
  • Tax Benefits & Repatriation Assistance: Advise on ways to minimize tax burdens, such as by purchasing a new house or investing in capital gains bonds. Help NRIs repatriate sale proceeds (up to USD 1 million) after paying applicable taxes.

Inheritance and Succession Planning

  • Inheritance Rights and Processes: Advise NRIs on their rights to inherit property in India, including the legal process involved in transferring property from a deceased relative.
  • Succession Certificate & Probate: Assist NRIs in obtaining a succession certificate or probate for properties inherited from a deceased individual.
  • Estate Planning: Provide advice on creating a will, trust, or other legal tools to ensure that property is inherited according to the NRI’s wishes and to minimize potential disputes among heirs.

RBI & FEMA Compliance

  • Foreign Exchange Management Act (FEMA) Compliance: Ensure that any transactions involving the purchase, sale, or transfer of immovable property comply with FEMA regulations, especially for non-resident foreign nationals.
  • Repatriation of Sale Proceeds: Help NRIs repatriate sale proceeds of property (up to USD 1 million per financial year), ensuring that all procedures are followed correctly, including tax clearance and RBI permission where necessary.

Property Disputes & Litigation Support

  • Dispute Resolution: Represent NRIs in property disputes, including issues related to ownership, inheritance, possession, and unauthorized occupation of property.
  • Court Representation: In cases of property litigation, such as disputes over title, partition, or breach of contract, the legal firm can represent the NRI in Indian courts.
  • Mediation & Negotiation: Facilitate negotiations or mediation between parties involved in real estate conflicts to settle disputes without going to court.

Real Estate Transactions for Foreign Nationals

  • Foreign National Property Transactions: Advise foreign nationals inheriting property from a resident Indian on the legal process and the restrictions on the sale or transfer of the property. Assist in obtaining permission from the RBI if they intend to sell the inherited property.

Leasing & Renting Property

  • Lease Agreement Drafting: Assist NRIs in drafting and reviewing lease or rental agreements for properties they own or intend to lease out in India, ensuring that the terms comply with Indian rental laws.
  • Tenant & Landlord Representation: Represent NRIs in any disputes related to tenants, including eviction proceedings or rent collection issues.

Do you need assistance? Call us Now