How Indians Can Buy Property Overseas

Sept 29, 2025

In today’s connected world, people are moving across countries more than ever before. At the same time, investing in foreign countries has become easier and more common. As a result, many Indians are now looking at the option of buying property in other countries.

There are many reasons why Indians want to own real estate overseas. Some see it as a smart investment that can grow in value over time. Others want a comfortable place to retire, while some parents buy homes near universities for their children who study abroad. For others, it’s simply about enjoying a better lifestyle or having a second home in a beautiful location.

Investing in real estate overseas:

Why exactly are people looking to invest in real estate markets outside India?

• Many Indian investors are looking to earn higher returns from real estate than they usually get in India. Some international markets offer better rental income or property value appreciation, making them attractive options.
• Buying property abroad doesn’t always mean spending a huge amount of money upfront. Some countries offer fractional real estate, which lets investors buy small portions of a property over time. This makes it easier for people with limited capital to invest in high-end properties in places like Dubai or Europe.
• A lot of wealthy Indians are looking to invest in second or third homes abroad. These properties can be rented out for additional income or they can go live in them as remote work allows them the flexibility to seamlessly manage their business or high paying jobs from overseas.

Liberalised Remittance Scheme (LRS):

Understanding the Legal Framework The Reserve Bank of India (RBI) governs foreign investments under the Liberalised Remittance Scheme (LRS).

The Liberalised Remittance Scheme (LRS) is a facility provided by the RBI that allows resident individuals, including minors, to remit a certain amount of money during a financial year to another country for investment and expenditure. Introduced in 2004, the LRS enables Indian residents to transfer up to USD 250,000 per financial year for specific purposes, such as:

• Acquisition of immovable property
• Investments in shares and bonds
• Education and medical treatment
• Travel and maintenance of relatives abroad
• Gifts and donations.

Key Features of LRS:

• Applicable to all resident individuals. In case of minors, the remittance must be made by their guardian.
• The limit of USD 250,000 is per person per financial year.
• This limit includes all expenses in foreign exchange including travel, education, and medical treatment.
• Individuals can pool remittances with family members to jointly invest in property.
• Remittance under LRS requires filling Form A2 and providing a declaration stating the purpose.
• A PAN (Permanent Account Number) is mandatory for all LRS transactions.

Points to Note for Property Investment:

• The remittance must be from an individual and not a company.
• The property should not be purchased for speculative or illegal purposes.
• All remittances must be routed through authorized dealers (banks).
• Unused limits cannot be carried forward to the next financial year.

Popular Destinations for Indian Buyers

Indian investors have been attracted to countries like the UAE, the Netherlands, the US, Germany, Australia and the UK. While deciding on which country to invest in, investors should also look at factors such as ease of purchase and sale transactions, any entry or exit loads or levies imposed by the local authorities, Capital appreciation etc.

Few of the Countries such as:

1. Dubai (UAE): Just a few hours from India. You don’t pay tax on rental income and property prices are reasonable. Great for vacation homes or rentals.
2. United Kingdom (UK): London and other cities are very popular, especially for parents whose kids are studying there. Safe place with good rental income.
3. United States (USA): Cities like New York, Houston, and Atlanta attract Indian buyers. Safe investment with many property options and good rental returns.
4. Canada: Toronto and Vancouver are favorites. Very clean and safe country, plus it offers a good lifestyle and immigration opportunities.
5. Australia: Places like Sydney and Melbourne are great if you want a second home or plan to move someday. Good schools and friendly environment.
6. Thailand & Malaysia: Affordable homes near beaches! Perfect for holiday homes. Also offer easy long-stay visas.
7. Singapore: A bit expensive, but it’s super clean, safe, and has good rental demand. Great for people looking for long-term investment.

Financing Options

When it comes to paying for a property overseas, one should know that Indian banks generally do not give home loans for buying property in another country. This means you will need to use your own money saved in India and send it abroad under the LRS scheme. You can send up to USD 250,000 each year. If your spouse or family member also sends money under their own LRS limit, you can combine the funds to make a larger payment.

Another option is to take a mortgage from a bank in the country where you're buying the property. Some developers abroad may also offer easy payment plans or loan options for international buyers. Before making any payment, always understand the interest rate, repayment terms, and legal process in that country.

Tax Implications

If you earn rent from your overseas property or later sell it at a profit, the country where the property is located may charge tax on that income. At the same time, India also expects to declare that income when filing the income tax return. But here’s the good part India has a Double Taxation Avoidance Agreement (DTAA) with many countries. This means you won’t be taxed twice for the same income. Apart from taxes on rental income, buyers should also be aware of how capital gains on sale of property will be taxed. In most cases such capital gains will also be taxable in India, although an exemption can be claimed if the person chooses to reinvest the proceeds in real estate back home in India.

ED & it dept to identify HNI with assets abroad

The Enforcement Directorate (ED) and the Income Tax (IT) Department are conducting separate investigations to identify High Net-Worth Individuals (HNIs) with assets abroad that are not declared in government records.

Key Findings by ED:

1. Undisclosed Foreign Properties: Several HNIs were found to have purchased properties abroad without disclosing them in their Income Tax Returns or FLA returns
2. Violation of FEMA Regulations: foreign property purchase were often Misrepresented under the Liberalized Remittance Scheme (LRS) limits
3. Money Laundering Links: The funds were suspected to be proceeds of crime, leading to attachment of foreign assets under PMLA.
4. Use of Benami Structures: Some properties were held in the name of relatives or offshore entities, to evade detection.
5. Non-disclosure under Black Money Act: HNIs failed to report foreign assets under the Black Money and Imposition of Tax Act, 2015.

❌ Common Violations Detected:

The ED’s findings led to serious consequences for the individuals involved, including attachment of overseas properties, hefty penalties, and prosecution under various financial laws. In severe cases, summons, arrests, and tax reassessment proceedings were initiated, highlighting the gravity of non-compliance in foreign asset disclosures.

TCS on LRS:

TCS, or Tax Collected at Source, is levied on foreign remittances under the Liberalised Remittance Scheme (LRS) in India. The rate is currently 5% for remittances exceeding ₹10 lakh per financial year. This is applicable to all types of LRS remittances except for those specifically exempted, such as remittances for education financed by a loan from a financial institution.

Threshold: TCS applies when the total amount of remittances made under LRS in a financial year exceeds ₹10 lakh.

Rate: The TCS rate is 5% for remittances above ₹10 lakh, except for education remittances financed by a loan from a financial institution, which are exempt.

Applicability: TCS is applicable to all types of LRS remittances, including international debit card and UPI transactions.

Due Diligence

• It is advisable to have the entire amount available upfront and not depend on loans or mortgages.
• Ensure clear title, check local laws on foreign ownership, and verify developer credibility.
• Use escrow services to safeguard payments.

Key Tips for First-Time Buyers

• Start with one property and a clear purpose (rental income, vacation home, etc.).
• Visit the location at least once before purchase.
• Maintain transparency in all financial transactions.

Conclusion:

Owning property overseas is no longer a distant dream for Indians. With the right knowledge, financial planning, and professional support, Indian investors can tap into international real estate markets and diversify their portfolio globally.