NRI Guide: How to Buy Property in India from the US (2026)
Buying property in India while living in the US is one of the most complex financial transactions an NRI will ever make — and one of the most rewarding if done correctly. There are FEMA regulations, TDS requirements, GST implications, home loan rules, repatriation limits, and US tax reporting to navigate. This guide covers everything you need to know before you sign anything.
Can NRIs Buy Property in India?
Yes. NRIs (Non-Resident Indians) can freely purchase residential and commercial property in India without any special RBI permission. You do not need to be physically present in India to buy — the transaction can be completed with a Power of Attorney (PoA) given to a trusted person in India.
However, NRIs cannot purchase agricultural land, plantation property, or farmhouses in India without special RBI approval.
How to Pay for Property in India as an NRI
Payment must come through proper banking channels — not cash carried from the US or through informal hawala channels. Accepted payment sources:
- NRE account — funds transferred from the US. Fully repatriable source.
- NRO account — can be used but has repatriation restrictions later
- NRI Home Loan — EMIs must be paid from NRE or NRO account
- Foreign currency remittance — direct wire to the seller's account through banking channels
TDS on Property Purchase by NRI: Critical to Understand
When an NRI buys property from a resident Indian seller, there is no TDS issue for the buyer. But when an NRI buys property from another NRI seller, or when an NRI sells property to anyone:
| Situation | TDS Rate |
|---|---|
| NRI buys from Resident Indian | 1% TDS on purchase price above ₹50 lakh (buyer deducts) |
| NRI buys from another NRI | TDS at 20% (Long-Term) or 30% (Short-Term) on capital gains of seller |
| NRI sells property (any buyer) | Buyer deducts TDS at 20% or 30% on sale value |
The buyer is responsible for deducting TDS and depositing it with the Income Tax Department using Form 26QB. Failure to do so makes the buyer liable for the TDS amount plus interest and penalties.
Costs Involved in Buying Property in India
| Cost | Approximate Amount |
|---|---|
| Stamp Duty | 4–8% of property value (varies by state) |
| Registration Charges | 0.5–2% of property value |
| GST (under-construction only) | 1% (affordable) or 5% (non-affordable) |
| Legal/Documentation Fees | ₹20,000–₹1,00,000 |
| Broker Commission | 1–2% of property value |
| PoA Notarisation (if from US) | $50–200 at Indian Consulate + Indian stamp paper |
Total additional costs typically range from 8–12% of the property value. A ₹1 crore property will have ₹8–12 lakh in additional costs beyond the purchase price.
NRI Home Loans in India
Most Indian banks — SBI, HDFC, ICICI, Axis — offer home loans to NRIs. Key terms:
- Loan amount: Up to 80% of property value (typically ₹30 lakh to ₹5 crore)
- Interest rates: Similar to resident Indian rates, approximately 8.5–9.5% in 2026
- Tenure: Up to 25–30 years (must end before age 60–65)
- EMI repayment: Must be from NRE or NRO account only
- Income proof: US salary slips, ITR (if filed in India), bank statements
Selling the Property Later: Repatriation Rules
When you eventually sell the property, you can repatriate the proceeds to the US under these conditions:
- The property was purchased from NRE account or foreign currency — full repatriation of principal allowed
- Maximum repatriation: proceeds from up to 2 residential properties in a lifetime
- Repatriation limit: up to $1 million per financial year after paying applicable taxes
- You need a CA certificate (Form 15CB) and banker's certificate for repatriation
US Tax Implications of Owning Indian Property
As a US tax resident, you must report Indian property on your US tax return:
- FBAR: Not required for real estate directly, but required for NRE/NRO accounts exceeding $10,000
- Rental income: Must be reported on your US tax return as foreign income, even if it is exempt in India
- Capital gains on sale: Must be reported in the US. India-US DTAA may allow credit for Indian capital gains tax paid.
- FIRPTA: This is a US rule — it applies when a foreign person sells US property, not when a US person sells Indian property
Practical Step-by-Step Process for NRIs Buying From the US
- Identify the property and agree on price with seller
- Execute a Power of Attorney (PoA) — get it notarised at your nearest Indian Consulate in the US
- Have your PoA holder in India verify title documents with a local lawyer
- Arrange funding from NRE account via wire transfer, or apply for NRI home loan
- Sign the sale agreement (your PoA holder signs on your behalf in India)
- Pay stamp duty and registration charges
- Get the property registered at the local sub-registrar's office
- Update mutation records with the local municipal authority
- Report purchase on your US tax return if applicable
Frequently Asked Questions
Do I need to come to India to buy the property?
No. A properly executed Power of Attorney allows your representative to sign all documents, pay stamp duty, and complete registration on your behalf. The PoA must be notarised at an Indian Consulate in the US and then adjudicated (stamp paper stamped) in India before use.
Is rental income from Indian property taxable in both countries?
Yes, potentially. India taxes rental income at your applicable slab rate (after standard 30% deduction). The US also taxes it as foreign income. Under the India-US DTAA, you can claim credit in the US for taxes paid in India, avoiding true double taxation. A cross-border tax specialist can help optimise this.
What is the best city for NRI property investment in India in 2026?
Bangalore, Hyderabad, and Pune continue to attract strong NRI investment due to IT-driven demand, good rental yields (3–4%), and appreciation potential. Mumbai and Delhi have high entry prices with lower relative yields. Tier-2 cities like Ahmedabad, Kochi, and Coimbatore offer lower entry costs with solid long-term upside for NRIs planning to return.