Owning your dream home somewhere far from your native land is not a far-fetched idea in today’s world. Due to the current economic disturbances, property prices have fallen in many European nations and North America. This gives a glorious opportunity for those dreaming of owning a plush property in these nations.
Fancy a house overlooking the Swiss Alps or the Manhattan skyline? It is possible, although not necessarily very simple. Firstly, you need to analyze before you decide to finalize a property and a foreign country. Also, check if you are eligible for a home loan and whether the interest rates are favorable. Besides, there are certain aspects and precautions which you must follow before you take a step forward in investing and acquiring your housing property in a foreign land.
Learn about the legal formalities and tax compliance:
Property laws in India and other countries are not the same. Before you take the big leap of investing in a property in another country, you must make sure you have a thorough and precise knowledge of the laws of that country.
As per the Foreign Exchange Management Act (FEMA), Indians can buy a foreign house property by remitting under the Liberalised Remittance Scheme. If the remittance is sent jointly by a family, the overseas property should be in the name of the family members. Apart from purchase, the FEMA allows Indians to own property in a foreign land through inheritance or as gifts. Section 6(4) of the FEMA defines the rules regarding the acquisition of overseas immovable property by Indians.
However, it is advisable to consult a local legal expert in a foreign country. Such experts must have the proper knowledge to guide you about the citizenship laws, local taxation policies, and ownership rules. For instance, the foreign country may impose additional charges on the sale of the property to foreigners, which in this case, is you.
While investing in property in a foreign land, you must also consider the tax implications. You must check the tax implications in India and the country where you have purchased the property. Although you can refer to a home loan EMI calculator to get an idea of your monthly EMIs, don’t forget to include the applicable stamp duty, estate duty, and other property taxes of the country to the total cost of your property purchased.
Guidelines to follow before you decide to buy a property in a foreign country:
- The quoted price is not the ultimate price; there is bargaining everywhere.
- Remember to transact through a well-known property brokerage firm.
- Never forget to appoint a legal advisor to acquire detailed legal information.
Thus, while it is possible, the tax and legal requirements of India and the foreign country must be understood while acquiring an overseas property. A person willing to acquire an overseas property should also seek expert help and guidance during this transaction to ensure it is a smooth and successful one.