Mangalore has one of the strongest overseas communities of any Indian city. Families here have worked in the Gulf, in Europe and in North America for generations, and many of them intend, eventually, to come home. Buying a house in Mangalore while living abroad is therefore an ordinary thing to do, and the process is well trodden.
This guide sets out the practical steps. It is general information, not legal or tax advice: the rules are set by the Reserve Bank of India under the Foreign Exchange Management Act (FEMA) and by the Income Tax Act, both of which change. Confirm the current position with a chartered accountant and a property lawyer before you sign anything.
What an NRI can buy
Under FEMA, a non-resident Indian or an overseas citizen of India may buy residential and commercial property in India without any special permission. Apartments, houses and commercial premises are all open to you.
What you cannot buy is agricultural land, plantation property or a farmhouse. These may only come to an NRI by inheritance or gift, not by purchase. A residential apartment in a registered project sits comfortably on the permitted side of that line.
How the purchase is funded
Payment for the property must be made in Indian rupees, through one of these routes:
- funds remitted from abroad through normal banking channels;
- an NRE (non-resident external) account;
- an NRO (non-resident ordinary) account;
- an FCNR (foreign currency non-resident) deposit.
Payments cannot be made in foreign currency directly to the seller, and traveller's cheques and cash are not acceptable. Keep the bank records of every instalment; they matter later if you sell and wish to take the proceeds abroad, where repatriation is subject to limits and conditions that your accountant should explain.
Indian banks and housing finance companies also lend to NRIs for residential purchases. The loan is disbursed and repaid in rupees, typically from an NRE or NRO account, and the lender will want the same documents a resident borrower provides, plus proof of your overseas income and status.
Signing from abroad: the power of attorney
You do not have to be in India to buy. A power of attorney (PoA) lets a trusted person, usually a family member, sign the agreement, pay stamp duty and register the sale deed on your behalf.
A PoA executed abroad must be signed before the Indian consulate or a notary in your country of residence and then, within the prescribed period, adjudicated and stamped in India before it is used. Draft it specifically for the purchase rather than as a blanket authority, and have it prepared by the same lawyer who is reviewing the property.
Taxes to plan for
Three points come up in almost every NRI purchase:
- Stamp duty and registration charges are paid in Karnataka at the same rates as for residents.
- Tax deducted at source (TDS): when the seller is an Indian resident, the buyer must deduct TDS on the purchase price and deposit it with the tax authorities. When a non-resident sells, the buyer deducts at a higher rate. Your accountant will tell you the rates that apply to your transaction.
- Rental income from the property is taxable in India, and may also need to be declared in your country of residence depending on the tax treaty between the two.
If you intend to let the home while you are abroad, set up the accounting from the start; it is far easier than reconstructing it years later.
Due diligence does not change
Everything a resident buyer checks, an NRI should check with more care, because you are further away. In short:
- confirm the project's K-RERA registration on the authority's portal;
- have a lawyer review title, encumbrance and approvals;
- insist on the carpet area in writing;
- read the agreement for sale in full before your attorney signs it.
Our guide to buying a luxury apartment in Mangalore goes through each of these in detail.
Managing a home from abroad
The part of the decision that guides rarely mention is what happens after the keys. A home that stands empty for eleven months a year needs someone to look after it. Practical questions to settle before you buy:
- Does the project have professional facility management after handover, and what does it cost?
- Is there a residents' association that a family member can deal with locally?
- Are the amenities and security run in a way that makes the home usable at short notice, when you fly in for a fortnight?
- How far is the home from the airport? A twenty-minute drive at the end of a long flight is a different experience from an hour and a half.
Kulai, on the northern coast, is twenty minutes from Mangalore International Airport by road, which is a large part of why it suits families who divide their year between two countries. We set out the area's travel times in Kulai and New Mangalore: understanding the area's connectivity.
A note on Yamuna Sky City
Yamuna Sky City, at Kulai on NH 66, offers 296 sea-facing residences in 2, 3, 4 and 5 BHK configurations across GF+60 floors, within an established gated community, with a clubhouse on the podium and the beach a couple of minutes' walk away. The sales team is used to working with buyers abroad: documents can be reviewed remotely, a family member can visit on your behalf, and a private viewing can be arranged around a visit home. Explore the residences, or contact the sales team to begin.
