British expats moving to India and thinking about buying their own home often find the experience a challenge compared with buying in Britain.
The western state of Goa, one a Portuguese enclave and a few hours travel from Mumbai is a favourite destination for expats and second homers.
However, the complicated residency requirements and property registration process really do mean working closely with an experience lawyer who is independent from the rest of the parties in the sales chain.
The first hurdle is residence qualifications.
To buy a home in India, a British expat must either have the permission of the Reserve Bank of India or qualify as ‘a person resident in India’.
Residence and bank accounts
Becoming a recognised resident alone does not allow property purchase, but opens the way to obtaining government approval to buy.
The British Foreign and Commonwealth Office (FCO) warns going to India with the right visa is important.
“The visa should not be ambiguous and should clearly say a British national intends to stay in India for an open-ended time to become a resident,” says FCO guidance.
“We believe unless the visa also states the visit is to become a resident or look for a job or start a business, then under Indian law; it’s illegal for a foreigner to own property.”
Buying a property without the right permissions could lead to the government confiscating the home and imposing fines as well.
Another problem for expats is opening an Indian bank account. Non-residents are only allowed to open rupee accounts for the length of their visa, which means six months for an ordinary holiday visit.
At the end of the trip, the account is closed unless the visa is extended. The account cannot stay open indefinitely.
If the account is left open while the expat travels elsewhere, the bank will close the account and hold the funds. A lengthy paper trail must be followed to access the money, and the bank will make charges before the funds are released.
Fraud safeguards
The FCO also offers some tips about buying property in India:
- A public notary is involved in the sale, but they are an official of the state and will not give legal advice or protect the buyer or seller’s interest.
- Always pay an independent translator to provide written copies of foreign language documents in English
- Your lawyer should confirm in writing that the property is debt free and unencumbered, is registered by the seller and has no outstanding tax charges at local, state or national levels.
- Always take the money for a property purchase into India via a bank transfer to prove the source is legitimate.
