COURTKUTCHEHRY EXCLUSIVE REPORT
Indian Residents Allowed to Buy Property Abroad Under FEMA and RBI Rules
Liberalised Remittance Scheme Permits Up to USD 250,000 Per Year for Overseas Property
Joint Ownership and Overseas Loans Also Permitted Under FEMA Guidelines
By Our Legal Reporter
New Delhi: December 09, 2025:
Buying property abroad is no longer restricted to Non-Resident Indians (NRIs). Indian residents living in India can also purchase immovable property overseas, thanks to clear provisions under the Foreign Exchange Management Act, 1999 (FEMA) and the Reserve Bank of India’s (RBI) Liberalised Remittance Scheme (LRS). With globalization and increasing aspirations, many Indians are exploring opportunities to own homes, apartments, or commercial spaces in countries like the USA, UK, UAE, Singapore, and Australia.
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This article explains the rules, limits, and opportunities available to Indian residents who wish to invest in overseas property.
Legal Framework
- FEMA Section 6(4): Allows Indian residents to hold or acquire immovable property outside India in line with RBI regulations.
- RBI Guidelines: The Liberalised Remittance Scheme (LRS) permits resident individuals to remit up to USD 250,000 per financial year (April–March) for permitted capital account transactions, including buying property abroad.
- Authorised Dealer Banks: All remittances must be routed through authorised dealer banks with proper declarations.
Buying Completed Property Abroad
Indian residents can purchase completed or constructed properties abroad by remitting funds under the LRS. For example:
- A property worth USD 500,000 can be partly funded by remitting USD 250,000 from India and financing the balance through an overseas loan.
- RBI rules allow borrowing from foreign banks or institutions, provided repayment from India stays within the annual LRS limit.
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This flexibility makes it possible for residents to own high-value properties abroad without breaching FEMA rules.
Buying Under-Construction Property Abroad
Residents can also buy under-construction properties abroad, where possession may be delivered after 2–4 years.
- Annual instalments or booking amounts can be remitted each year, within the USD 250,000 limit.
- Deferred possession does not violate FEMA, if payments are made through authorised banking channels.
This provision is particularly useful for Indians investing in projects in Dubai, Singapore, or London, where construction-linked payment plans are common.
Joint Ownership of Property Abroad
Two to four Indian residents can jointly purchase property abroad.
- Each person can remit USD 250,000 per year.
- Joint remittances allow pooling of funds:
- Two persons: USD 500,000
- Three persons: USD 750,000
- Four persons: USD 1,000,000
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This makes it possible for families or friends to jointly invest in overseas property, whether residential or commercial.
Overseas Loans for Property Purchase
Indian residents are permitted to combine LRS remittances with overseas loans.
- Loans must be taken from non-resident lenders or foreign banks.
- Repayment from India must remain within the USD 250,000 annual limit.
- No guarantee or security can be offered on assets in India without RBI approval.
This provision allows residents to buy properties worth USD 500,000, USD 750,000, or even USD 1,000,000, by combining remittances with overseas financing.
Practical Examples
- Single Buyer: An Indian resident remits USD 250,000 in one year to buy a property in Dubai.
- Joint Buyers: A family of four remits USD 1,000,000 jointly to purchase a villa in London.
- Under-Construction Property: A resident remits USD 250,000 annually for four years to buy a USD 1,000,000 apartment in Singapore.
- Loan Combination: A resident remit USD 250,000 and takes a loan abroad to finance the balance of a USD 750,000 property in New York.
Compliance Requirements
- Remittances must be made from own funds (not borrowed in India).
- Transactions must be reported under LRS declarations.
- Property must comply with local laws of the foreign country.
- Repayments of overseas loans must follow FEMA and RBI rules.
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Expert Views
- Legal Experts: Say FEMA and LRS provide clarity and flexibility for residents investing abroad.
- Financial Advisors: Recommend careful planning to stay within annual limits and avoid penalties.
- Industry Analysts: Note rising interest among Indian residents in overseas property markets, especially in Dubai and London.
Conclusion
The ability of Indian residents to buy property abroad under FEMA and RBI’s Liberalised Remittance Scheme is a significant opportunity. With an annual limit of USD 250,000 per person, joint ownership, and overseas financing options, residents can now participate in global real estate markets.
This move not only empowers individuals but also strengthens India’s integration with the global economy. For aspiring property owners, the message is clear: with proper compliance, owning a home abroad is now within reach.
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