Kochhar & Co.
Can anyone (including foreigners) own and occupy real estate in your jurisdiction (including shares in property owning companies)? Are there any restrictions?
Non-Resident Indians (“NRIs”) and Overseas Citizens of India (“OCIs”) can generally own and occupy real estate in India, but cannot acquire agricultural land, plantations, or farmhouses. Foreign nationals residing outside India cannot purchase real estate without prior approval of the Reserve Bank of India (“RBI”), except in cases of inheritance or for diplomatic purposes.
Foreign companies are also generally prohibited from owning real estate, except where a subsidiary, branch or office is established under Indian foreign exchange regulations; such entities may acquire property for business use. Foreign direct investment (“FDI”) is not allowed in Indian entities engaged in ‘real estate business,’ meaning trading in land or immovable property for profit. However, foreign investment is permissible in the areas of construction, infrastructure, and SEBI-registered real estate investment trusts. Citizens of certain countries (e.g. Pakistan, China, Iran, Nepal, Bhutan, Hong Kong) require RBI approval for buying real estate in India but may lease property for up to five years.
Are there restrictions on lending for the purchase of real estate by foreign companies? If so briefly give an outline?
Yes, there are restrictions on lending for real estate purchases in India by foreign companies under the Foreign Exchange Management Act, 1999 (“FEMA”). External commercial borrowings (ECBs) raised by foreign owned entities cannot be used for real estate activities, including land acquisition. As mentioned in our previous response, FDI in real estate is also restricted, with limited exceptions for infrastructure and construction-development projects subject to sector-specific conditions and regulatory approval.
Buying
Please provide a short summary of the fees and costs (including tax) relating to buying real estate in your jurisdiction.
Fees and costs for buying real estate in India are broadly categorized as follows:
(a) Stamp Duty – This is a state levy and typically ranges from 3% to 8% of the property value. Some states offer concessional rates (e.g., 1%) for female buyers.
(b) Registration Fees – Generally it is around 1% of the property value, subject to minor state-wise variations.
(c) Transfer Charges – Payable to government authorities if the property is allotted by such governmental authorities. The transfer charges may vary depending on the applicable state laws and the specific policies of the allotting authority.
(d) Goods and Services Tax (“GST”) – GST is applicable on purchase of under-construction properties and not levied on ready-to-move-in properties with a completion certificate.
(e) Ancillary Fees and Costs – These include legal fees, due diligence or title verification charges and surveyor fees.
Owning
Are there taxes applicable to owning real estate and can the burden of the taxes be passed to someone else (e.g. a tenant or an occupier - not being the owner
Property owners in India are required to pay annual property tax to local municipal authorities, calculated based on factors such as location, built-up area, property usage, and either the market value or annual rental value. Rates typically range between 0.2% and 1.5%, depending on the municipality and state regulations. Parties may contractually agree that the tenant or occupier will reimburse the property tax to the landlord for the duration of occupancy, as part of the lease rentals or the license fees.
Tax Breaks
Are there tax breaks or other incentives for foreigners to buy real estate in your jurisdiction? If so, what are they?
There are no tax breaks or other incentives for foreigners purchasing real estate in India.
How is the ownership of Real Estate evidenced in your jurisdiction?
Ownership of real estate in India is primarily evidenced by transfer/ sale deeds registered under the Registration Act, 1908. While registration is mandatory, it offers only presumptive title. Buyers must verify ownership through documents like encumbrance certificates, mutation records, property tax receipts, and building permits. There is no central land records repository, and many states still use archaic documentation methods. To modernize the system, the Government of India is digitizing records through the Digital India Land Records Modernization Programme (“DILRMP”), with most rural records already digitized. The Government of India has proposed the Registration Bill, 2025, which aims to mandate online registration, Aadhaar-based verification, and authentication to enhance transparency and ensure more secure and efficient ownership verification.
Is it possible to keep the identity of owners of real estate confidential in your jurisdiction?
No, it is not possible to keep the identity of real estate owners confidential in India. Once a property document is registered under the Registration Act, 1908, it becomes a public record accessible at the Sub-Registrar’s office upon payment of a prescribed fee. Additionally, the ongoing digitization of land records and integration with Aadhaar and other identity verification systems under government initiatives like DILRMP further enhance transparency. These legal and procedural frameworks are designed to ensure accountability, prevent fraud, and protect ownership rights, thereby making full confidentiality in real estate ownership legally unfeasible.