Floating as well as fixed rate home loans are linked to the Benchmark Prime Lending Rate (BPLR) of a bank or the financing company from which you take a home loan. (Flickr)
Putting the paperwork in place is that part of an otherwise happy home-buying process most people would like to avoid. This, however, happens to be the most crucial part of the purchase and it is better you do your research before you hit the home-search button.
With an eye to attract more investment, the Reserve Bank of India (RBI) has simplified norms for Non-Resident Indians (NRIs) to invest in the Indian real estate sector. So, while the number of documents to be furnished by an NRI is almost the same as that of an Indian who wants to sell a property in India, there are a few odds and ends that the former needs to get in place.
A list of documents that an NRI requires to sell a property.
An NRI, who want to sell a property in India, should hold a passport; not necessarily an Indian passport. This will serve as the identity proof of the person, involved in the transaction.
For an Overseas Citizen of India (OCI) and a Person of Indian Origin (PIO), a passport serves the same purpose.
A number of NRIs do not pay taxes in India, as their income is taxable in the countries they stay. However, experts believe NRIs should apply for a PAN (Permanent Account Number) card here when they intend to buy a property in India, as it will be required to apply for a tax exemption certificate as after the sale of the property. PAN numbers are given out to NRIs with a foreign communication address to select countries.
If an NRI has been holding a property for a certain period and earning money from it (by renting it out, etc), the transaction becomes taxable. In that case, tax returns for the whole property-ownership period should also be kept ready.
An NRI has to give documents in support of his address in India as well as abroad. This may include a ration card, telephone or electricity bills, life insurance policy statements, etc. Same set of papers are also required as the proof of residence abroad.
A key document needed in the process is the sale deed, also a primary proof of ownership. A legal document, sale deed is an agreement executed by an NRI while purchasing an under-construction property in India.
A letter of allotment (from a society, a builder or any relevant authority) bestows the property to the said person who holds it.
Documents from the society
For an apartment in a particular society, a letter from the apartment/society is needed for a go-ahead to the sales process. This document states the seller has no outstanding payments to the society. A copy of membership of the society is also important to establish ownership of the property.
Approved building plan & occupation certificate
While a copy of an approved building plan is necessary for selling a property, an occupation certificate is a proof that the apartment has been occupied and is also given out by the builder or the building society.
An encumbrance certificate is necessary to assure the buyer that the land or the property has no dues to any legal authority. This is important in the case of a house, an apartment or even land.
Apart from these documents, it would also help if an NRI can provide documents of property tax receipts over the years. A guarded buyer may ask for it.
In case an NRI is unable to produce any one the above documents, he/she may go for a lawyer certificate that proves the ownership of the property. A lawyer would carry out a title search and produce a report on the property. Though this certificate is also admissible for a sale, an original document is necessary to get a sale done quickly.
(Katya Naidu has been working as a business journalist for the last nine years, and has covered beats across banking, pharma, healthcare, telecom, technology, power, infrastructure, shipping and commodities.)