The laws governing ownership of property in India vary depending on the country of origin and the visa and residential status of the buyer.

The following information is a guide to the laws governing property ownership in India. As laws can change we advise any clients to seek independent legal advice.

Foreign citizens of non-Indian origin will be permitted by the Reserve Bank of India, on application, to acquire immovable property in India, provided that:-

• The property to be purchased is for residential use only.
• The funds for the purchase of the property comes from foreign exchange remitted from abroad in any convertible currency through normal banking channels.
• Income accruing by way of rent from the property purchased, of the sale proceeds of such property/income arising out of investment of such sale proceeds at any future date shall be credited only to the Ordinary Non-resident Rupee (NRO) account of the non-resident purchaser.

To qualify for the above, buyers must complete and submit form IPI-I to the Reserve Bank of India.

Before you can legally own a property in Goa you must be a resident of India or you must own an Indian company. The latter option is usually the easiest method for foreign nationals who are looking to purchase a holiday home or investment property and not a permanent residence.

Under the Foreign Exchange Management Act 1999 (FEMA), a person classed as a ´Resident´ in India means someone who has resided n India for more than 182 days during the previous tax year (April 1 – March 31) and has come to or stays in India either for taking up employment, carrying on business or vocation in India or for any other purpose, that indicates intention to stay in India for an uncertain period. In other words, to be treated as á person resident in India´ under FEMA a person has not only to satisfy the condition of the period of stay (182 days) but has also to comply with the condition of the purpose/intention to stay.

If you are unable to meet the ´residency requirement´ you can enter into an agreement to purchase with the seller. This enable you to lease the property for a number of years until you are able to fulfill the above requirements of residency.

Another option for foreign nationals, `particularly those that wish to purchase as a holiday home or as an investment, is to form a company in India and use the company to purchase the property. The costs for establishing an Indian company will be approximately 525 pounds sterling. This is a very simple way to purchase although it can be time consuming. If, at a later date you decide to obtain your residency, then you can transfer the Deeds into your sole name.

The requirement that you will have to meet in forming a new company is that you must do so as per the provisions of the Companies Act 1956 with a minimum of 2 persons as Directors and Shareholders. In certain businesses it is possible for both the Director and Shareholder to be foreign nationals.

If the Company is formed in India under the provisions of the Companies Act 1956, then the property can be purchased in the name of the company, without having to obtain permission from the Reserve Bank of India.

The above rules are not valid if you are classed as a PIO (Person of Indian Origin) or an NRI (Non Resident Indian) who resides outside India.

A PIO is defined as citizen of a foreign country other than Bangladesh or Pakistan, if (a) Have at any time held Indian passport or (b) if you have parents of grandparents that are/were citizens of India by virtue of the Constitution of India or the Citizenship Act 1955 (57 of 1955) or (c) you are a spouse of an Indian citizen or a person referred to in sub-clause (a) or (b).

An NRI means a person resident outside India who is a citizen of India or is a person of Indian origin.

All property purchases are subject to 4% stamp duty and a 2% registration charge on the value of the property.

Legal fees for conducting all of the above should cost around 1,250 pounds sterling.

Purchase costs are as follows

• Stamp Duty 4%
• Registration charges 2%
• Fees for incorporation of a Goan company 525 pounds sterling
• Legal fees To be agreed with lawyer