Should you buy real estate overseas?

The first edition of the International Real Estate Expo (IREX) 2015 is scheduled to be held on 4-6 December in New Delhi. Real estate investment opportunities in India and abroad will be showcased. Earlier this year, the outward remittance limit under the Liberalised Remittance Scheme for Indian individuals was raised from $125,000 to $250,000 by the Reserve Bank of India. This brought more properties abroad within the reach of Indian investors, and many are making the most of this opportunity. Also, with remittance limit applicable individually, buying properties jointly with family member widens the net of options available to Indian investors.

According to various reports, Indians are among the top foreign investors. Dubai Land Department’s statistics show that Indian investors topped among nationalities investing there with 4,089 transactions of a total value of 13 billion dirhams in 2015 (about Rs.23,500 crore at Rs.18.15 to 1 dirham). In October last year, the US National Association of Realtors published a report which stated that buyers from India bought residential properties worth an estimated $5.8 billion during the one-year period ending March 2014. This was about 6% more than in 2013. The report also stated that the average spend was $459,028 (about Rs.2.81 crore then.

Given the poor sales in the sector in India, some affluent investors are looking to diversify their portfolio and get better returns by investing globally. While this may work from investment point of view, one must also consider the tax implication before deciding to invest abroad.

Read full story: Should you buy real estate overseas?