We are Wealth Clinic Team
The Indian real estate market has been a favourite of property investors from all over the world for a long time. India is a good place for investors regarding location, return on investment and economic growth. The Non-Resident Indians (NRIs) have been very interested in the Indian property market. Short-term problems caused by the Coronavirus will not stop investors from being optimistic about how things will go in the future.
Here are some reasons why NRIs should keep investing in Indian real estate.
• The value of the Rupee has dropped.
The NRI community has a unique ability to turn their hard-earned money from outside the country into profitable investments in India. It’s easier and cheaper to buy real estate now that the Rupee is at an all-time low against the dollar. Investors will buy a lot more things when the Rupee falls even more.
People in India now pay about $120,000 for land worth Rs. 75 million. However, if the Rupee had been worth Rs 65 to the dollar, the exact cost would have been 1 lakh 15 thousand dollars instead. It can also save much money for NRI investors who want to invest in real estate.
• The market is going up.
Coronavirus was a big problem for the Indian economy, so it had many difficulties and hardships. However, the pandemic is over, and the Indian economy is rising again. During the last few years, much demand wasn’t being used. The economy will grow by vast amounts in the next few years.
This will raise the value of homes, and NRI investors can expect a good “Return on Investment” on their money. NRI real estate investors have a great chance to invest in new types of land, co-working spaces, commercial real estate, and warehousing.
• Interest in Other Instruments has gone down.
Investors from outside the United States used to prefer things like a Fixed Deposit (FD), Gold, and the stock market to invest in. On the other hand, these investments are subject to changes in the market, and the money is always at risk of being lost. Expatriate investors have also been put off by the falling returns on Gold and Fixed Deposits. Interest rates on most Fixed Deposits are still at 4-5 per cent, which is only about the same as or close to the rate at which prices go up. This means that you will get less money.
On the other hand, the real estate market is still a good investment for NRIs. Eventually, Tier II and Tier III cities will have a lot more people living there. This is encouraging NRI investors to buy real estate in these cities. Investing in small cities is still a good idea even though they will become the engines of growth.
• Simplified Tax Rules
As long as India is one of the top places to get money from other countries, NRIs are more likely to keep their extra money in India because of a simplified tax system. The NRIs also benefit from indexing the value of their Indian homes. People who have owned real estate for more than 24 months are treated as long-term capital assets and get an indexation benefit with simplified taxation at 20%. Sections 80C and 80TTA of the Income Tax Act of India also allow for some tax deductions.
The simplified payment rule also encourages NRIs to keep investing in the Indian real estate market, which is good for the country. When NRIs buy a home, they can put the money in their NRO account and pay the seller from this account. The NRI investor can also transfer the funds directly to the seller’s account when buying a home in India. NRIs can invest in Indian real estate without any problems with a list of documents.
In the end, India has a growing economy, and the real estate market will be booming soon. The NRI community must keep investing to reap the benefits in the long run.
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