NRI Property Registration in Chennai, Tamil Nadu
What is NRI Property Registration?
NRI Property Registration is the official process for Non-Resident Indians (NRIs) to legally own a properties like land, buildings, apartments, or any real estate assets in India.
It also involves submitting required documents such as ID Proof, address prooof, and sale agreement, to the local Sub-Registrar Office.
Documents Required for NRI Property Registration
- Indian passport or Overseas Citizenship of India (OCI) card.
- Utility bills, Aadhaar card
- PAN Card
- Power of Attorney
- Sale Agreement
- Title Deed of Property
- Encumbrance Certificate
- Passport-sized photo
- Online patta
- Mother Document
- EB Card
- Water Tax
Eligibility to Buy Property in Chennai
1. What Types of Properties Can NRIs Buy?
Any Non-Resident Indian (NRI) have an Indian passport is eligible to buy property in Chennai, as long as they follow the Indian government rules. However, there are some key restrictions and guidelines:
- NRIs can buy residential properties like houses, apartments, or flats.
- NRIs can also buy commercial properties in cities like Chennai, provided they meet certain conditions.
- NRIs cannot buy agricultural land, plantation properties, or farmhouses unless they are involved in farming activities.
2. Restrictions for NRIs to buy property in Chennai, Tamil Nadu
- Age Limit: You must be at least 18 years old to buy property.
- No Criminal Records: If you have a serious crime records, may be harder to get a loan or approval for property.
- FEMA Rules: The purchase must follow the rules of the Foreign Exchange Management Act (FEMA), which regulates how NRIs can invest in property in India.
What is FEMA to registering property in India?
FEMA Foreign Exchange Management Act, it’s an Indian law introduced in 1999 to manage foreign exchange transactions. It provides guidelines for how Non-Resident Indians (NRIs) and foreigners can manage financial transactions when buying or selling properties in India
Why is FEMA Important for NRI Property Registration in Chennai, Tamil Nadu?
NRIs typically purchase property using funds from Non-Resident External (NRE), Non-Resident Ordinary (NRO), or Foreign Currency Non-Resident (FCNR) accounts. FEMA ensures these transactions are done legally.
FEMA specifies the types of properties NRIs can buy, such as residential and commercial properties, and restricts the purchase of agricultural land, plantations, or farmhouses.
By regulating the flow of money, FEMA helps prevent illegal activities like money laundering or unaccounted foreign funds.
FEMA mandates that all property payments must go through legal banking channels, ensuring clear and trackable transactions.
Following FEMA rules protects NRIs’ legal rights in property transactions. Non-compliance can lead to fines, penalties, or even loss of ownership
Step-by-Step Procedure for NRI Property Registration
Our experts verify the property’s ownership and other details
a. Agreement of Sale
Once you decide on the property you want to buy, the first step is to sign an Agreement of Sale. This document includes the terms of the sale, such as the agreed price, the schedule of payments, and the date of possession. This agreement is not legally binding but sets the foundation for the final sale.
b. Sale Deed
The next step is the Sale Deed, a legally binding document that transfers ownership of the property to the buyer. Both parties (the seller and the buyer) need to sign the Sale Deed in front of two witnesses. This document must be registered with the local Sub-Registrar Office to make the transfer official.
For registration, NRIs must pay stamp duty and registration fees. In Chennai, the stamp duty is typically 7% of the property’s value, and the registration fee is 2%. These fees can vary slightly depending on the property value and location.
Schedule an appointment at the Sub-Registrar Office in Chennai.
The property is registered in your name in the presence of a legal expert and witnesses.
Receive certified copy of the registered document and update government records to your ownership.
Legal Prime offers you Power of Attorney (PoA)
Power of Attorney (PoA)
Since many NRIs live abroad, they may not be able to be present for the property registration. In this case, a Power of Attorney (PoA) can be granted to a trusted representative in India to handle the registration on their behalf. The PoA must be notarized in the country of residence and then registered in India.
There are two types of PoA:
- Special Power of Attorney (SPA): Allows the agent to perform specific tasks such as signing documents or completing property registration.
- General Power of Attorney (GPA): Provides the agent with broad powers to handle various matters on behalf of the NRI.
Taxes on Property for NRIs in Chennai
a. Tax on Rental Income
If you rent out your property in Chennai, you will earn rental income. This income is taxable, and the tenant will typically deduct Tax Deducted at Source (TDS) before sending you the rent. The tax rate is generally 30% on rental income for NRIs.
b. Capital Gains Tax
When selling property, NRIs need to pay Capital Gains Tax, which is divided into:
- Short-Term Capital Gains (STCG): If the property is sold within 2 years of purchase, the tax rate is 15%.
- Long-Term Capital Gains (LTCG): If the property is sold after 2 years, the tax rate is 20% after applying indexation benefits (adjusting the purchase price for inflation).
Additionally, NRIs can take advantage of Section 54 of the Income Tax Act to claim tax exemptions on long-term capital gains by reinvesting in another residential property.
Financing Property in Chennai for NRIs
NRIs can finance their property purchase through home loans from Indian banks. Several Indian banks, including HDFC, ICICI, and SBI, offer home loans to NRIs with competitive interest rates and flexible terms.
Loan Eligibility Criteria:
- NRIs must have a regular income and be employed or self-employed.
- Most banks offer home loans with a tenure of 15-20 years.
Co-applicants (a family member in India) can help increase the loan eligibility.
Stamp Duty and Registration Charges in Tamil Nadu
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Property Type
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Stamp Duty
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Registration Fee
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Note: These charges are subject to government revisions.
F A Q
Most of the process can be finished using a Power of Attorney.
The transaction will take an average of 7 – 10 working days, considering the transaction complexity.
Property transactions in India require a PAN card.
The ownership registration is not legally valid and you may face legal issues.
