What Indian Buyers Should Consider Before Buying Luxury Property Abroad

Start with the money route, not the property

Indian residents remit funds abroad under the Reserve Bank of India's Liberalised Remittance Scheme, which sets an annual per-person limit and defines permitted purposes. The limit, the reporting requirements and the tax collected at source on foreign remittances have all been revised in recent years, so the correct figure is the one published by the RBI and the tax authority at the time of the transaction, not the one a buyer remembers from a previous purchase.

This matters because it determines the pace at which a purchase can be funded. Large acquisitions are frequently structured across family members and across financial years, and that structure has to be designed before a deposit is committed, not improvised afterwards.

Non-resident Indians operate under different rules again, depending on residency status and the accounts through which funds move. Confusing the two regimes is one of the most common and most avoidable errors.

Decide who holds title

Personal ownership is simplest and often correct. But in some jurisdictions a company, trust or local vehicle changes the tax treatment, the succession outcome or the ability to add family members later — sometimes favourably, sometimes disastrously.

The UK, for example, applies an annual charge to certain residential properties held by corporate entities. Several European countries treat corporate-held residential property differently from personally held property for wealth and transfer taxes. The right structure is jurisdiction-specific and must be set before completion, because unwinding it later is usually a taxable event.

Model the tax in both countries

An Indian tax resident is taxed on global income, which includes overseas rental income and gains, with relief available under the applicable double taxation avoidance agreement. That relief is real but it is not automatic, and it does not always equalise the outcome.

The buyer needs three numbers before committing: net rental yield after local taxes and costs, effective tax on gain at exit in both jurisdictions, and the annual holding cost including service charges, local property taxes and insurance. Almost every disappointing overseas purchase we review had a plausible gross yield and an unexamined net one.

Understand succession law where the property sits

Property is generally governed by the succession law of the country in which it is located. Several jurisdictions apply forced heirship rules that override a foreign will, and some require a locally executed will for the estate to be administered without lengthy delay.

For families holding assets in three or four countries, this is not a detail. It is the difference between a straightforward transfer and a multi-year probate across jurisdictions. A local will, drafted to sit alongside the Indian will rather than revoke it, is often the simplest fix.

Underwrite the exit before the entry

Ask who the buyer will be when you sell. In a market driven by foreign purchasers, that pool can thin quickly when currency or policy shifts. In a market driven by domestic buyers, price discovery is more stable but the asset must appeal to local taste rather than international taste.

Ask also how repatriation works. Capital can generally be brought back, but the documentation trail — evidence of the original inward remittance, tax clearances, banking channel records — must be maintained from day one. Reconstructing it a decade later is painful and occasionally impossible.

The 99Habitat perspective

We think the sequence matters more than the selection. A buyer who resolves remittance, structure, tax, succession and exit before shortlisting properties will make a better decision in a mediocre market than a buyer who does the reverse in an excellent one.

None of the above is advice on your specific position. Cross-border ownership needs a qualified tax and legal adviser in each jurisdiction, and our role is to make sure the right questions reach them early enough to matter.