When Distance Meets Property: What NRIs Must Check Before Buying in India

By Sana Khan-Realty Quarter

For many Non-Resident Indians (NRIs), buying property in India is both an emotional milestone and a long-term investment decision. However, physical distance from the market often increases exposure to misinformation, over-dependence on intermediaries, and gaps in due diligence—turning what should be a secure asset into a potential risk.

Rental yields across most Indian cities remain modest at 2–3%, significantly lower than returns seen in several global markets. Industry experts caution NRIs against relying on optimistic broker projections and advise verifying prevailing market rents independently, factoring in vacancy periods, maintenance costs, and local demand dynamics.

Title verification remains a non-negotiable step, especially in resale transactions. The presence of a seller’s name in land or property records does not automatically indicate clear ownership. Hidden encumbrances, unresolved inheritance claims, or past litigation can surface years after purchase, making a comprehensive legal title search essential.

Under existing regulations, NRIs are permitted to purchase residential and commercial properties in India. However, agricultural land, plantations, and farmhouses cannot be purchased, except through inheritance. In addition, certain states impose local restrictions, underscoring the importance of understanding region-specific rules.

Taxation is another critical consideration. Rental income is subject to Tax Deducted at Source (TDS) at 31.2%, typically deducted by tenants. At the time of sale, buyers are required to deduct tax on the transaction value, including long-term capital gains tax, which can significantly impact cash flows if not planned in advance.

For under-construction properties, RERA registration must be independently verified on the relevant state portal. While RERA has improved transparency, developers often register projects with extended completion timelines that differ from marketing promises, allowing legally permissible delays in possession.

NRIs are also advised to evaluate investment returns in their base currency, not merely in rupees, to account for exchange-rate fluctuations and repatriation implications. Finally, robust property management arrangements, often backed by a Power of Attorney, are crucial to handle rentals, maintenance, and compliance from overseas.

Visit HNIs, INVESTORS & CHANNEL PARTNERS MEET 2026

Industry observers maintain that NRIs must approach Indian real estate with the same rigour applied to any global asset class—led by verification, planning, and discipline, rather than sentiment alone.