Indian real estate has drawn immense interest from investors of all hues over the years, especially one from overseas. The reason for the same is due to the existence of an organized property market in the country, the scope of a good return on investments and the positivity surrounding the country’s economy. So, several investors particularly from overseas have been putting their hard-earned money into the Indian realty sector. Let us now understand why foreign investors should choose to invest in Indian real estate.
Fall In Value Of Indian Currency Couldn’t Have Been More Opportune
The rupee is in a free fall scenario against major foreign currencies these days. So, this is the best time to invest in the country’s real estate segment as the property prices will be quite affordable right now. Also, the decline in the value of the Indian currency gives more purchasing power to foreign investors. So, purchasing a property or putting money into the Indian property market makes a lot of sense to NRIs as they can earn huge profits once the rupee bucks the declining trend.
Outlook Of The Economy Remains Positive
Covid-19 adversely impacted several economies across the globe. However, the Indian economy is gradually showing signs of revival after a prolonged slowdown. The demand for properties has also started to increase in various property segments. This has led to an appreciation in property prices as a result of which NRIs can make a killing going forward. So, it is in the best interest of NRIs to invest in the country’s property segment.
Realty Offers Good RoI Compared To Other Instruments
NRIs used to be obsessive about gold, fixed deposits etc as far as investments are concerned. But these have become less lucrative compared to realty investments. For example, the interest rates regarding FD presently hover around 4-5 percent, which is anything but good returns. On the contrary, properties continue to be a feasible option for the NRIs to invest in with Tier 1 and 2 cities evincing a lot of interest from foreign investors. With smaller cities in India at the forefront of growth in the country, foreign investors can benefit a lot in the long run by investing in these places.
Convenient Tax Regime
India attracts a lot of foreign money, thanks to the easy taxation policy in place, and this in turn prompts the NRIs to invest their excess money in India. Foreign investors also receive an indexation benefit for properties they have in India. To illustrate with an example, immovable properties in possession for over 24 months are considered long-term capital assets and they get indexation benefit via simplified taxation at 20%. The payment rule is also very convenient and it pushes NRIs to keep investing in the Indian real estate market. So, the simplified tax regime serves as another inducement for NRIs to choose Indian realty as an investment vehicle.
