Ram Posted November 30, 2007 Share Posted November 30, 2007 Thats correct. You have to be smart about your investments. If you invest it multiple properties & wait it out' date=' you can take out the investments from the most appreciated one.[/quote'] But there is no ceiling on the number of properties or the amount an NRI can invest ? As I understand it, the limit is only there for the amounts that can be repatrtiated ? And thanks for all this info. Link to comment Share on other sites More sharing options...
Bumper Posted November 30, 2007 Share Posted November 30, 2007 But there is no ceiling on the number of properties or the amount an NRI can invest ? As I understand it, the limit is only there for the amounts that can be repatrtiated ? And thanks for all this info. There is NO CAP on the no. of investments you can make. The cap is only for repatriation Link to comment Share on other sites More sharing options...
chunky_lafanga Posted November 30, 2007 Share Posted November 30, 2007 I got flats in India. All in major cities :D Does that mean I am sitting on shudh ghee? :hysterical: Link to comment Share on other sites More sharing options...
Raj Posted December 1, 2007 Share Posted December 1, 2007 I wouldnt go thru any broker. Each broker, takes a cut out of the deal (expect to pay atleast $50 per sqft for the broker, in some cases even $100 per sqft). Buy directly from the builder. You can pay the builder thru ICICI bank cheques on a monthly basis. Just keep all the copies of payments intact. It will be useful for repatriation when u sell the property. Beware of some pitfalls of investing in properties in India: 1) You can repatriate the sale of only upto TWO immovable properties (that you bought thru your NRI funds). 2) You need to hold the property for a min of 3 years for long term capital gains taxes. 3) When you sell, you can only repatriate your investment immediately, not the capital gains. You have to wait for 10 years to get your capital gains back. For eg: You buy a flat for 40L & 3 years later sell it for 60L, you can only get the dollars for the 40L back. 20L will have to wait another 7 years 4) Anything u inherit can be repatriated in full & immediately. In otherwords, if you buy anything & do a "clean gift" to your parents & inherit from them, the sale of that property is repatriable in full 5) Finally, you are not allowed as an NRI to buy any agricultural lands in India. Tho, you can inherit them Very interesting thanks Bumps.... what is the deal with land? My folks sold their land in Noida 5 years ago and bought plots in Punjab. It was kind of a forced sale in so much that the government were about to acquire it at less than market value. Link to comment Share on other sites More sharing options...
Raj Posted December 1, 2007 Share Posted December 1, 2007 Oh and i believe both land (even more so) and property prices in India will continue to rise for the forseeable future. The doller is toast and the pound ain't that far behind. You need to put your wealth somewhere, especially if you already have a "car, house and gold"..... :hysterical: Link to comment Share on other sites More sharing options...
Bumper Posted December 1, 2007 Share Posted December 1, 2007 Very interesting thanks Bumps.... what is the deal with land? My folks sold their land in Noida 5 years ago and bought plots in Punjab. It was kind of a forced sale in so much that the government were about to acquire it at less than market value. For repatriation needs land, flats, houses etc are all same. They all come under immovable property. Link to comment Share on other sites More sharing options...
Ram Posted December 2, 2007 Share Posted December 2, 2007 For repatriation needs land' date=' flats, houses etc are all same. They all come under immovable property.[/quote'] Is there any particular reason why there is a ceiling on the money got from the sale of property bought from NRI money that can be repatriated ? Link to comment Share on other sites More sharing options...
Bumper Posted December 2, 2007 Share Posted December 2, 2007 Is there any particular reason why there is a ceiling on the money got from the sale of property bought from NRI money that can be repatriated ? There is no ceiling on the money got from sale. There is only a ceiling on the no. of repatriable properties (which is TWO). The repatriation happens in two stages. First you are eligible to repatriate the investment. And on completion of 10 years, repatriate the capital gains. Whatever cap that is imposed is to discourage NRIs from pumping big money and artifically inflate the local markets & then cash out leaving the local citizens in a limbo. Link to comment Share on other sites More sharing options...
Ram Posted December 2, 2007 Share Posted December 2, 2007 Whatever cap that is imposed is to discourage NRIs from pumping big money and artifically inflate the local markets & then cash out leaving the local citizens in a limbo. And that is the part I dont understand. If all they want is to prevent inflation of land prices, they must limit investment of NRI money in the first place, and not place a cap of the number of properties from which money got from sale can be repatriated. For eg , Say i buy land worth 50 Lakhs, it is going to contribute anyway to price inflation, irrespective of whether i want sell it later and repatriate the money. And even worse, what if there is no need for me to repatriate the money at all ? I invest my NRI money ,sell the property later for a handsome profit and allow my immediate family in India to enjoy the fruits of the profit. I havent broken any law, yet, what the govt didnt want in the first place , price inflation, would have happened anyways. Link to comment Share on other sites More sharing options...
Bumper Posted December 2, 2007 Share Posted December 2, 2007 And that is the part I dont understand. If all they want is to prevent inflation of land prices, they must limit investment of NRI money in the first place, and not place a cap of the number of properties from which money got from sale can be repatriated. For eg , Say i buy land worth 50 Lakhs, it is going to contribute anyway to price inflation, irrespective of whether i want sell it later and repatriate the money. And even worse, what if there is no need for me to repatriate the money at all ? I invest my NRI money ,sell the property later for a handsome profit and allow my immediate family in India to enjoy the fruits of the profit. I havent broken any law, yet, what the govt didnt want in the first place , price inflation, would have happened anyways. U are muddling up a few unrelated issues. 1) The govt cannot impose a cap on an actual rupee amount. What seems reasonable now, may not be, several decades later. No. of properties is one way to enforce limits, may not be the best way. 2) If as an NRI u pump money in rupees & keep the investment/gains in India, the money stays back home. Its not drained from India. Instead of u profiting as an NRI (by repatriating), u are letting Indian citizens profit from it. If not, atleast u will spend your rupees in India (essentially giving it back to Indian businesses). With these limits in place, most NRIs who want to make a quick buck, wont invest in India, as repatriation is painful. Without such limits, every Tom, Dick & Harry will use the dollar's conversion rate to buy real estate in India & then pull it out for a handsome profit, driving up local prices to dizzy heights, which will crash the local markets. Link to comment Share on other sites More sharing options...
Holysmoke Posted December 2, 2007 Share Posted December 2, 2007 I read somewhere that a prime location flat (only 2000 sq ft) in Mumbai went for 34 crores. That is like 7 mil . I guess that is equivalent of Manhattan. Isn't it? Whoa.. thats insane.. and not really true.. i guess.. maybe its 3.4 crores.. but then that wouldnt be that expensive.. (compared to current property rates in good areas in south mumbai).. but 34 crores is insane.. are you sure??? And what are you gonna do even if you buy that 75 lakhs flat? Do you seriously think that an area which has 75 lakh flats shall have school that charge anything less than 3-4,000 to educate your kids? are you talking of 3-4 k per month.. or per year?:eyedance: Link to comment Share on other sites More sharing options...
Ram Posted December 2, 2007 Share Posted December 2, 2007 @Bumps I understand your point about how limiting the number of properties who sale and the profits got from it cant be repatriated. But my contention is, Property price inflation isnt caused ny NRI selling their immovable assets at a later time, but them buying it in the first place.So if the govt wants to limit inflation, they must limit the amount of NRIs can make on real-estate in India. Hope i am clear enough. Link to comment Share on other sites More sharing options...
fineleg Posted December 2, 2007 Share Posted December 2, 2007 MM, As long as the money is within India, the Indian govt wont be unduly worried. Its money going out of India that they are primarily concerned about. Link to comment Share on other sites More sharing options...
Ram Posted December 2, 2007 Share Posted December 2, 2007 As long as the money is within India, the Indian govt wont be unduly worried. Its money going out of India that they are primarily concerned about. You are mistaken. Its not a question of where the money goes or stays. Its a question of NRI investment inflating land prices and making it go beyond the reach of the common man in India. This is similar to what is happening in London, with lots of Billionaire businessmen buying multi-million dollar properties, inflating the real-estate prices and making beyond the reach of the common Londoner. Link to comment Share on other sites More sharing options...
Bumper Posted December 2, 2007 Share Posted December 2, 2007 But my contention is, Property price inflation isnt caused ny NRI selling their immovable assets at a later time, but them buying it in the first place.So if the govt wants to limit inflation, they must limit the amount of NRIs can make on real-estate in India. Hope i am clear enough. Thats correct. But what motivates an NRI to buy properties in India ? 1) Investment 2) Migration back to India 3) Properties bought for old parents No problems with (2) & (3), since there is no question of repatriation. As for (1), every NRI would gleefully buy a property & then dump it an year later, if he can absorb all the loot back in dollars. By letting NRIs do this in an uncontrolled manner, u will see a sudden rush of foreign currency into local markets and a sudden drain of all that money years later. This will cause huge instability in local markets. An NRI not looking to repatriate his money, but is a big investor in local lands, is no different than a local zameendar. Its not a new threat imposed by the NRIs (Locals already pose such a threat) There are no special laws to protect the economy from such people (other than IT & property taxes). The laws are inplace to prevent NRIs from unfairly profiting from an easy loot, at the expense of the locals. Link to comment Share on other sites More sharing options...
Ram Posted December 2, 2007 Share Posted December 2, 2007 Many thanks for that. And my last query to you on this ( i know i am boring you a bit) is that, Is there any limit on the number of inherited properties whose sale can be repatriated to the NRI living abroad ? Why i ask this is, i sense a loop-hole in the maximum of 2 immovable assets repatriated law. For eg, say my parents already own a house in Ind that is now worth 50 L. Lets say 12 years ago, i had bought a piece of land worth 20 L from NRI money and it is now worth 50 L. But instead of selling that land and trying to repatriate that money , I sell my parents house and transfer that 50 L on to me through legal channels. Now, what has happened is, I have got the 50 L that i would have originally gotten had i sold the land and i have well and truly managed to inflate the prices by investing in the first place. Meanwhile, my parents still have the 50 L worth of land that i had bought before. So the family wealth as such, hasnt been affected at all. Is this a plausible scenario ? Or is there a cap on ANY real-estate ( inherited, previously owned, bought from NRI money) whose sale can be repatriated back to foreign country ? Link to comment Share on other sites More sharing options...
Bumper Posted December 2, 2007 Share Posted December 2, 2007 Yes inheritance is one of the loopholes. I dont believe there is any limit imposed on repatriation by inheritance. But if you have siblings, inheritance may not be as straight fwd as u think (unless they wish to cooperate). If you buy a property & gift it to your parents & propose to inherit it later on, ur sibling technically can claim rights to his/her share of the property. Link to comment Share on other sites More sharing options...
Ram Posted December 2, 2007 Share Posted December 2, 2007 Yes inheritance is one of the loopholes. I dont believe there is any limit imposed on repatriation by inheritance. But if you have siblings, inheritance may not be as straight fwd as u think (unless they wish to cooperate). If you buy a property & gift it to your parents & propose to inherit it later on, ur sibling technically can claim rights to his/her share of the property. So, technically, I can keep repatriating the money i got from selling inherited property ( assuming the siblings also oblige) , while on the other hand , i keep investing NRI money into new immovable assets ? Isnt that actually killing the whole point of having that law in the first place ? A simple yes or no would suffice. Link to comment Share on other sites More sharing options...
Bumper Posted December 2, 2007 Share Posted December 2, 2007 Thats correct, inheritance is a legal workaround, if you know how to play it. Link to comment Share on other sites More sharing options...
Guest dada_rocks Posted December 2, 2007 Share Posted December 2, 2007 khosla ka ghosla in action: 356 allotted plot of HUDA occupied by builder mafia in gurganv.. Link to comment Share on other sites More sharing options...
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