Can Foreigners Buy Property in Kerala? A Guide to Real Estate Investment for NRIs and Foreign Nationals

Veegaland Homes | December 2, 2024

Kerala, known as “God’s Own Country,” has been a sought-after destination for tourists, investors, and those seeking a peaceful lifestyle. With stunning natural beauty and a growing economy, Kerala has become an attractive option for foreigners looking to invest in real estate. However, the question remains: Can foreigners buy property in Kerala? Here we look into the regulations, laws, and procedures governing foreign property ownership in Kerala.This blog is  A Guide to Real Estate Investment for NRIs and Foreign Nationals.

Who Is Allowed to Buy Property in Kerala?
Under the Foreign Exchange Management Act (FEMA), NRIs, Overseas Citizens of India (OCIs), and Persons of Indian Origin (PIOs) have the right to purchase immovable property in India without prior approval from the Reserve Bank of India (RBI). They can buy both residential and commercial properties, making Kerala an attractive option for those looking to own a home or invest in a business venture.

Types of Properties NRIs and Foreigners Can Purchase

For NRIs and OCIs, there are relatively few limitations on the types of properties they can buy. They can invest in:
– Residential Property: Apartments, villas, and houses are all permissible, whether for personal use or investment purposes.
– Commercial Property: Shops, office spaces, and other commercial buildings are allowed and may provide lucrative investment opportunities given Kerala’s growing economy.

Foreigners should be aware of the following restrictions:

1. Type of property: Can only purchase residential or commercial properties, not agricultural land or plantations.
2. Payment: Must make payments through Indian banking channels.
3. Repatriation: Can repatriate sale proceeds after completing formalities.

Tax Implications:

Foreigners should consider tax implications:

1. Tax Residency: Determine tax residency status.
2. Capital Gains Tax: Pay capital gains tax on property sales.
3. Withholding Tax: Deduct withholding tax on property purchases.

Documentation Needed for Buying Property in Kerala

To purchase property, NRIs and OCIs need several essential documents:
– Proof of Identity: Passport, OCI/PIO card, or any other identity verification.
– PAN Card: Required for taxation purposes.
– Proof of Residence Abroad: To establish NRI/OCI status.
– Power of Attorney (if applicable): In cases where the NRI/OCI cannot be physically present, a trusted individual in India can be granted Power of Attorney to complete the transaction on their behalf.

Important Tips for NRIs and Foreigners Considering Property Investment in Kerala

Investing in property in a foreign country can be a significant decision. Here are some tips for a smooth and secure experience:

a) Work with Reputable Real Estate Agents and Legal Experts
Partnering with experienced real estate agents and legal advisors familiar with NRI transactions can help ensure that the process is transparent and legally sound. Look for developers and agents with strong reputations and client testimonials.

b) Verify the Property’s Legal Status
It is vital to conduct thorough due diligence before committing to a property purchase. Confirm the title deed, ensure no outstanding legal issues, and verify that all necessary approvals from local authorities are in place.

c) Understand the Local Market
Researching the real estate market in Kerala, especially in cities like Kochi, Trivandrum, and Thrissur, will help you make informed decisions about property appreciation, rental demand, and growth potential. Engaging with locals or reading market insights can provide valuable knowledge.

d) Plan for Currency Exchange and Remittance Regulations
Understanding remittance rules, repatriation, and currency exchange rates is crucial for NRIs. The RBI allows NRIs to repatriate funds from property sales, though certain restrictions apply to the principal amount.

Future Prospects: Why Invest in Kerala?

Kerala’s economy is steadily growing, driven by tourism, healthcare, and IT industries. The state has also become a sought-after location for eco-friendly and biophilic homes, with developers focusing on sustainable and luxurious residential projects. For NRIs looking to secure a retirement home, a rental property, or even a future residence, Kerala’s combination of natural beauty, strong cultural roots, and modern infrastructure make it an appealing choice.This blog is  A Guide to Real Estate Investment for NRIs and Foreign Nationals.

Veegaland Homes: Your Partner in Kerala:

At Veegaland Homes, we understand the complexities of foreign property ownership in Kerala. Our experienced team guides you through the process, ensuring a seamless and compliant