Non-resident Indians in Gulf evince keen interest in realty

V Nagarajan

There has been a paradigm shift in the demand pattern among Gulf Non Resident Indians (NRIs) while investing in real estate back home. With work from home (WFH) option, demand for larger units is up and luxury homes are driving demand with NRIs who are looking for additional amenities to create an ideal workspace area within a home.

Bengaluru based Maxpo Exhibitions has recently organised India property show in Dubai at Dubai World Trade Centre. Close to 2,500 expatriate Indian families have visited the 2-day show held from 10 am to 8 pm. “The quality of visitors came in for appreciation as they are serious buyers and end users who are looking for apartments in the price range of Rs 60 lakh – Rs 1 crore. There is demand for even units priced at Rs 1.6 crore and above. Affordable housing in the price range of Rs 30 lakh-Rs 35 lakh drove demand. A significant section of NRIs are keen to invest in second homes. Budget villas for Rs 1.5 crore and above are favourites among NRIs,” according to Zia, organiser of the event.

For chartered accountants and other professionals, rent yielding commercial properties are becoming the favourite options for investment. The investment ticket size demanded is said to be in the region of Rs 40-50 lakh. A consortium of NRIs are keen to make collective investment in a single unit for better bargaining and earning competitive yield on investment.

Land price appreciates much faster than other real estate assets in India as it continues to remain in short supply. There is yet another reason for this trend. There continues to be a mismatch between demand and supply for clear marketable land in India due to slow process of digitisation. With the government working on overtime to plug the loopholes it will take some more time to get land records digitised. This will go a long way in minimising the prolonged litigation time taken in courts and rendering speedy justice to landowners, say property consultants.

Among select Indian cities that drove interest among Gulf NRIs during the 2-day event for investment in real include Mumbai, Pune, Bengaluru, Chennai, Delhi-NCR, Hyderabad, Kochi, Bhopal, Chandigarh and a few tier 2 and 3 cities. According to the organisers, Gulf NRIs with their proximity of living together over a period of years have developed an affinity to make collective investment in select properties. It is said that there are about 50 NRIs with varied options. This new trend among collective investor option has not been experienced in the past, said the organiser.

There were enquires for holiday homes and independent homes from select NRIs during the event, says a few exhibitors.

A significant trend witnessed is the surge in demand for units located in the integrated township projects as it comes with associated clubhouse amenities. Online marketing is picking up and people wish to send their relatives in India to inspect the property before finalising the transaction. There continues to be demand for home loans to part finance the housing investment in India.

I am an estate agent and representing Indian builders to market their residential projects in the Gulf. Can I get the service charges in forex and what are the conditions to get it in Gulf? Kindly clarify. T Bhatia, Sharjah

With the change in FEMA regulations, you can get the service charges in forex from the developer in India. The Reserve Bank’s circular permits authorised dealers to freely allow remittance without RBI permission, by way of commission to agents engaged abroad for sale of residential flats or commercial plots in India upto $25,000 or five per cent of the inward remittance, per transaction, whichever is higher.

I have an apartment in Bengaluru and inherited from the family another apartment in Kochi. As Bengaluru apartment is occupied by my family members, what are the tax implications for apartment in Kochi in case I do not lease out? Please clarify. Aravindan Nair, Dubai.

The Income-tax Act clearly says that no income would be added to the total income of the assessee in respect of the apartment which is self-occupied. As a result, your Bengaluru apartment will be exempt from income-tax. However, if there are more than one residential property which are self-occupied or not, there will be a tax liability.

Though you have not purchased the second property and inherited from your family member, still notional income tax would apply based on the rental value as if it is given on rent.