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http://www.tripadvisor.com/Travel-g297604-c3411/Goa:India.html
Inside Goa: Indian Property Rights
Created by jpurz, 12:25 pm, June 10, 2006 Edit this page
Additional Significant Contributors: dribyar
To be eligible to buy a home in India, a foreign national of
non-Indian origin is required to reside in the country for
183 days in a tax year before he or she can purchase the
property on a freehold basis. Many travelers from the UK come
to Goa on 180-day tourist visas. To enable them to acquire a
home, they sign a lease-contract that enables them to enjoy
the use and possession of a home in Goa in the interim (i.e.,
until they qualify for the freehold in the manner described
below), which they otherwise would not be able to do because
of their 180-day visa.
On the strength of their lease-contract as proof that they
have a home in Goa, many of them have then obtained
longer-term visas (i.e. of more than six months duration)
from Indian high commissions/consulates abroad, or six-month,
non-tourist visas that can be extended in India. Some may
travel to a neighboring country like Sri Lanka or Nepal to
renew their Indian visa and return to India thereafter. This
enables them to fulfill the residence criterion, i.e., to
stay for a 183-day period in any particular year and thereby
qualify for freehold ownership.
The lease contract has a duration of 58 months (approx. five
years) and is renewed for additional 58-month periods, as
necessary or until such time the foreign national is able to
qualify for the freehold. As soon as he or she does so, the
lease-contract is converted at no extra cost into a freehold
(purchase) deed, which is then registered in the local
property registry office.
The lease arrangement is convenient for many since most
travelers are initially issued only 180-day visas. In any
case, they usually spend only a few weeks each year in the
initial stages. Most of them intend to spend longer periods
in future when they will use their home in Goa for their
retirement years. Therefore, they plan to qualify for the
freehold electively when it is convenient for them to spend
the six-month period in India and / or when they are ready to
retire. The period of residence need not be continuous, but
has to add up to 183 days in any tax year (April to March of
the following calendar year).
The reason that the lease contract has a duration of under
five years is because the regulations prescribe that any
lease arrangement of 60 months or more requires the lessee to
fulfill the residency requirement.
Another aspect of Indian property regulations is that a
foreign national is not permitted to repatriate the proceeds
of eventual sale of the property. This legislation is
probably intended to discourage speculative trading in
real-estate by overseas investors. Hence, a foreign national
based in England, for example, who sends Pounds to India for
purchase of a villa or apartment, can sell his/her home at
some future date if they wish. However, their bankers in
India are not allowed to remit the sale price in Pounds back
to the country of origin of the seller. The sale proceeds
have to be credited to a local bank account of the seller and
can be used in any manner as he or she wishes, including the
acquisition of another home in Goa. Capital-gains tax is
payable on the profit that the seller will make. The tax rate
is 20% of the gain if the property has been held by the owner
for more than 3 years and approx. 30% of the gain if the
seller sells before 3 years of purchase.
You need to be a RESIDENT to BUY a property (which means get
your deeds). If you are not a RESIDENT then you still own the
property on a leasehold as has already been mentioned. What
is a RESIDENT. They must be in India for a period of 182 days
in the proceeding financial year AND prove their intention to
stay in India. BOTH criteria MUST be fulfilled, not just the
182 day bit. Can people please take note of this as it seems
to be overlooked by many. The RBI does not stipulate how you
can prove your intention to stay but basic employment, having
a RUNNING business or selling everything in your home country
and moving to Goa should suffice.
People have been advised by solicitors to buy property under
a business name, dont do it unless you are aware of the law.
The buisiness should be trading and the property must be used
in connection with the business. You also have to submit
information to the RBI within 90 days of purchase if you wish
to buy this way. Recent visitors to Goa have seen stories on
the Herald and Navind Times that they are stopping foreigners
buying. That is not the case they are just cracking down on
those that have cut corners and done it illegally in the
past. If you do everything by the RBI rules you are fine.
Note: The original information for this thread came from the
following forum thread:
http://www.tripadvisor.com/ShowTopic-g424923-i9241-k620999-o10-Goa_Goa.html
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