New Regulations for Acquisition and Transfer of Immovable Property by NRIs and OCIs
RBI has issued the Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2018 (“Regulations”) vide notification dated March 26, 2018. Following are the key provisions of the Regulations:
- Acquisition and Transfer of Property in India by a Non-Resident Indian (“NRI”) or an Overseas Citizen of India (“OCI”)
An NRI and OCI may:
- acquire any immovable property in India other than agricultural land/ farm house/ plantation property;
- acquire any immovable property in India other than agricultural land/ farm house/ plantation property by way of gift from a person resident in India or from an NRI or OCI;
- acquire any immovable property in India by way of inheritance from a person resident outside India who had acquired such property in accordance with the provisions of the applicable foreign exchange law in force at the time of acquisition by him or the provisions of these Regulations or from a person resident in India;
- transfer any immovable property in India to a person resident in India; and
- transfer any immovable property other than agricultural land/ farm house/ plantation property to an NRI or an OCI.
- Acquisition of Immovable Property for carrying on a Permitted Activity
A person resident outside India who has established in India a branch, office or other place of business (excluding a liaison office) for carrying on any activity in India, may:
- acquire any immovable property in India, which is necessary for or incidental to carrying on such activity; and
- transfer by way of mortgage to an authorized dealer the immovable property acquired in pursuance of the aforementioned clause, as a security for any borrowing.
- Prohibition on acquisition or transfer of Immovable Property in India by citizens of certain countries
No person being a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, Bhutan, Hong Kong, Macau or the Democratic People’s Republic of Korea (DPRK) shall acquire or transfer immovable property in India, without the prior permission of the RBI. Lease transactions pertaining to immovable property, not exceeding 5 (Five) years are however permitted. This prohibition however, does not apply to an OCI.
- Other provisions
The Regulations also contain provisions inter alia regarding purchase/ sale of immovable property by Foreign Embassies/ Diplomats/ Consulate Generals, joint acquisition by spouse of an NRI or an OCI, acquisition of immovable property by a Long-Term Visa holder.