Legal checklist for NRIs buying a flat or land in Hyderabad

If you live abroad and are buying in Hyderabad, you do the same legal checks as a resident buyer, plus a few that apply only to NRIs: what kind of property you may buy, how you may pay for it, and how tax is deducted. You will probably do much of this from a distance, so get every item below in writing.

1. Title and encumbrance

Confirm the seller is the owner and has the right to sell. Have a lawyer read the chain of earlier title deeds. Get an encumbrance certificatewhich shows registered mortgages and other charges on the property. For a flat in a project, check that the project is registered with Telangana RERA.

2. Land type and zoning

Under RBI's foreign exchange rules, an NRI or OCI can buy residential and commercial property in India but cannot buy agricultural land, plantation property or a farmhouse. Such property can come to you by inheritance. If someone offers you "farm plots", confirm the land classification before anything else.

Check with GHMC, HMDA or the local body that the land is zoned for the use you want. If it was converted from agricultural use, ask for the conversion order.

3. The builder

For a flat, look up the project and the promoter on the Telangana RERA website. Check whether the builder's earlier projects were delivered on time and what buyers there say. Ask how the project is funded, because a builder short of money is the usual cause of a stalled site.

4. Approvals

• Building or layout permission from GHMC, HMDA or the local authority
• Environmental clearance, which large projects need
• The occupancy certificate (and completion certificate) at handover, which shows the building is fit to occupy

Ask for copies and compare them with what is filed on the RERA portal.

5. The sale agreement

The agreement should state the total cost, the payment schedule and the possession date. Read the clauses on delay, penalties and refunds. Check that it records the carpet area and the amenities as RERA requires. A promise that is not in the agreement does not count.

6. Money and tax

Stamp duty, transfer duty and registration in Telangana come to about 6% of the property value for urban property. Our guide to stamp duty and GST has the breakup.

You must pay through banking channels: an inward remittance from abroad, or a debit to your NRE, NRO or FCNR(B) account. RBI does not allow payment by traveller's cheque or foreign currency notes.

Tax is deducted at source (TDS) at several points. When you buy from a resident seller for ₹50 lakh or more, you as the buyer deduct 1% and deposit it. If the seller is also a non-resident, a different and higher deduction applies. Later, when you earn rent or sell, the tenant or buyer deducts tax from what they pay you. Rates and thresholds change, so have a tax adviser confirm the current ones and tell you what relief the tax treaty (DTAA) with your country of residence gives.

7. Litigation and dues

Have your lawyer search for cases involving the property in the civil and revenue courts. Confirm there are no unpaid property tax, maintenance or utility bills. Where the property is jointly owned or inherited, every co-owner or heir has to sign. Even a small pending case can delay the transfer and hurt resale.

8. The home loan

If you are taking a loan in India, read the sanction letter for the interest rate, the EMI schedule and the prepayment terms. Ask the lender which of your accounts it will accept for EMIs and how the loan will be disbursed.

9. Registration

You own the property only once the sale deed is registered at the Sub-Registrar Office and the duty is paid. Collect the registered sale deed and keep it with every receipt, agreement and approval. You will need them when you sell, or when the property passes to your heirs.

10. Who to hire

Use an independent lawyer for title, approvals and the agreement, and a tax adviser for TDS, capital gains and the DTAA. Do not rely on the builder's lawyer alone.

relai does not give legal or tax advice, but our advisors can help you shortlist projects in Hyderabad and check their RERA records: book a call.