What is the procedure to buy property from NRI?

NRIs living abroad face many practical difficulties in coming to India to sell their property which can take from few days to weeks. It's not only difficult in arranging long leave but also significant travel cost.

Hence NRIs prefer to sell their property through General Power of Attorney (GPA) by assigning a person to do property registration formalities on their behalf.

Below is the systematic procedure to buy a property through GPA from NRI or from a person who temporarily resides abroad

1. Property Documents
2. Property Verification
3. Sale Agreement
4. General Power of Attorney (GPA)
5. Home Loan
6. Tax Deducted at Source (TDS)
7. Government Fee (Stamp Duty & Registration fee)
8. Sale Deed Registration
9. MODT Registration

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Below, we explained each step in detail

1.Property Documents:

As soon as you finalize a property based on your requirement and growth aspects, it's prudent on buyer’s part to collect property documents from seller for verification.

NRI seller can email you the soft copy of following primary documents

• Parent Deed
• Sale Deed
• Encumbrance Certificate
• Tax Paid receipt
• Khata
• Occupancy Certificate
• PAN and Passport
• Cancelled cheque

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2. Property Verification:

Verify above listed documents from a real estate lawyer, This is to ascertain the legal ownership of property, tax liabilities with property and to ensure that property is complying with various regulations.

Get the written verification report from lawyer.

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3. Sale Agreement:

The sale Agreement is probably the most important document in the whole chain of sale proceed because even the sale deed is executed based on the terms covered under sale agreement. Sale Agreement covers various aspects of sale such as:

• Indemnity clause
• Agreed cost
• Advance paid
• Penalty clause
• Right to call off the deal
• Procedures to be followed in case of default by either party
• Losses or obligations to be covered by buyer or seller and etc…

For your better understanding, let me give the real context of buying a property from NRI:

Mrs.Rajalakshmi lives in California, USA. She owns a 2BHK flat in Foyer City apartment in Doddathoguru village, Bangalore.

We saw this property listed on property website for sale. We connected Mrs.Rajalakshmi on Whatsapp call and toured the property.

We liked the property, After nearly 2 weeks of negotiation with Mrs.Rajalakshmi, we settled at the price of Rs 39 Lakh.

We followed below steps to execute a Sale Agreement:

Step 1: We prepare the sale agreement draft in word file

Step 2: Purchased non-juridical E-Stamp paper from co-operative bank near my place. The Stamp value is Rs. 3900 (Rs. 3900 is 0.1% of buying price Rs.39 lakhs)

Step 3: On 17–09–2022, we printed sale agreement draft on A4 size bond paper

Step 4: I (buyer) signed the sale agreement at bottom of all pages, including non-judicial e-stamp paper.

Step 5: We courier the signed sale agreement to Mrs.Rajalakshmi who is in California.

Step 6: Mrs.Rajalakshmi signed the sale agreement and couriered back to me. Below is the image sale agreement.

As soon as I received the sale agreement, applied for home loan.

Note:

• In the above, we listed only non-judicial e-stamp paper, 1st page and schedule pages of sale agreement (not all pages)
• As an alternative, you may frank the sale agreement at sub-registrar office instead of using non-judicial e-stamp paper

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4. General Power of Attorney (GPA):

NRIs grand general power of attorney to a person, to authorize property registration on his/her behalf.

If the General Power of Attorney is given to blood relatives like Mother, Father, Brother, Sister, Wife, Husband, Son, or Daughter. The Stamp is just Rs. 200

If the General Power of Attorney is given to non-blood relatives like Aunty, uncle, friend or colleagues. The Stamp Duty is 5% of consideration value

For Example: The selling price is Rs. 39,00,000

The Stamp Duty for non-blood relatives is Rs. 39,00,000 X 5% = 1,95,000/-

My seller Mrs.Rajalakshmi follwed below steps to execute General Power of Attorney from California:

Step 1: Mr.Rajalakshmi decided to give GPA to her father Mr.Seetharaman

Step 2: Mrs.Rajalakshmi draft the GPA in word file

Step 3: Printed the GPA draft on A4 size paper

Step 4: Affixed her passport-size photo

Step 5: Mr.Rajalakshmi carried the printed GPA and Passport to notary public near her place in California.

Mr. Rajalakshmi and two witnesses signed the GPA in front of notary. Notary sealed and signed the GPA

Step 6: Mr.Rajalakshmi couriered the GPA to India, to her father Mr. Seetharaman

Step 7: Mr.Seetharaman carried the following documents to Jayanagar District Registrar office in Bangalore

• Notarized GPA which came from California
• Passport copy of Mr.Rajalakshmi
• Aadhaar of Mr. Seetharaman
• K2 challan (Rs, 200 stamp duty receipt)
• Request Letter

Step 8: The Jayanagar District registrar's office verified the above-listed documents and adjudicated the GPA

Below is the image of adjudicated GPA: