With the Reserve Bank of India (RBI) raised the annual limit for investment in a real estate property held abroad from Rupees 75 lakh to Rupees 1.5 crore, many people are considering overseas properties as good option for investment.
If you're too planning to buy a real estate property abroad, keep these things in mind so not to make any erroneous purchase decision.
Before investing in a property overseas, the first and the foremost thing is to consult with a property broker (or expert) who has good knowledge of the relevant real estate laws both of India and the country abroad. For instance, if you want to bequeath a real estate property in a foreign country, you need to be aware about the inheritance and succession laws of that country in advance.
You also need to understand about the tax implications of buying an overseas property. As for example, if you buy a property in the U.S., you need to pay tax on any rental income arises from that property both in India and the U.S.
The basic rules for taxing income, rental or capital gains, from a property held abroad are somewhat the same as for properties in India. Few conditions that you may need to consider to claim maximum tax benefits include – reinvestment of capital gains arise due to selling of property into a residential property only to save on your long-term capital gains tax. The reinvestment should be done within a period of one year before or two years after the date of transfer of the first property. The procedure is mentioned under section 54/54F of the Income Tax Act, 1961.
Mr. Anil Mithas, Chairman & Managing Director at Unnati Fortune Group says, “If you're planning to invest in a property abroad, first take the necessary information about the tax laws and other property transaction related details from a consultant. Also, keep in mind the additional charges you may incurred for maintenance of the property and other purchasing formalities while finalizing the investing amount.”
Follow Mr. Anil Mithas on Twitter & Facebook
If you're too planning to buy a real estate property abroad, keep these things in mind so not to make any erroneous purchase decision.
Before investing in a property overseas, the first and the foremost thing is to consult with a property broker (or expert) who has good knowledge of the relevant real estate laws both of India and the country abroad. For instance, if you want to bequeath a real estate property in a foreign country, you need to be aware about the inheritance and succession laws of that country in advance.
You also need to understand about the tax implications of buying an overseas property. As for example, if you buy a property in the U.S., you need to pay tax on any rental income arises from that property both in India and the U.S.
The basic rules for taxing income, rental or capital gains, from a property held abroad are somewhat the same as for properties in India. Few conditions that you may need to consider to claim maximum tax benefits include – reinvestment of capital gains arise due to selling of property into a residential property only to save on your long-term capital gains tax. The reinvestment should be done within a period of one year before or two years after the date of transfer of the first property. The procedure is mentioned under section 54/54F of the Income Tax Act, 1961.
Mr. Anil Mithas, Chairman & Managing Director at Unnati Fortune Group says, “If you're planning to invest in a property abroad, first take the necessary information about the tax laws and other property transaction related details from a consultant. Also, keep in mind the additional charges you may incurred for maintenance of the property and other purchasing formalities while finalizing the investing amount.”
Follow Mr. Anil Mithas on Twitter & Facebook