All you need to know about international home buying

Mr. Anand Narayanan, National Director - Residential Agency, Knight Frank India

 

Q: Does the global economic uncertainty offer good investment opportunities in overseas properties?

A: Some international locations offer themselves as sound investment destinations, immaterial of the overall economic situation. These locations aren't volatile; they present sound underlying currency and are reasonably liquid too.

Q: What are the popular destinations among Indians and what has been the trend in property rates in those markets?

A: Dubai, London, NYC and Singapore are the most popular destinations for Indians. But for Dubai the other three markets have given superior inflation adjusted returns in the last 2 years as well as over a longer time horizon. Exotic resort locations such in Thailand, Florida, Mauritius and South of France too are experiencing interest other that education destinations such as Sydney and Melbourne. All these location, in the eyes of the discerning Indian buyer offer superior value for money as compared to properties in India.

Q: What type of Indian buyers show keen interest in buying properties overseas?

A: 1. Those wanting a home away from India as a lifestyle choice
2. Those who have intense Business travel
3. Those whose children are studying overseas
4. Investments in stable currencies

Q: What should a prospective buyer keep in mind while scouting for properties overseas?

A: 1. The most important aspect to be taken care of is to look for integrated service providers who offer services both onshore (in India) as well as offshore (where the property is located). The service provider, namely an International Property Consultant, who offers you an international property should also have capabilities to offer legal structuring advice through specialized partners to ensure that you fund the overseas purchase without flouting any Indian norms as well as protect you from complicated inheritance laws of the land where the property is located.
2. Do attend Country Briefing sessions held by International Property Consultants, such as Knight Frank, to familiarize you with the nuances of buying overseas
3. If you are a light user of the property or if you lease it out, look for a Property Manager

Q: What are the laws and regulations that a buyer should be aware of when planning such investments?

A: 1. Liberalized remittance Scheme, allowing outward remittances from India for purposes including buying immovable property overseas
2. Capital gains and taxation of income arising from property in the overseas destination and their impact from a DTA treaty perspective
3. Holding costs of the asset
4. Inheritance and succession rules in the overseas jurisdiction.

Q: How an investor can go through Knight Frank for such property purchases. What are the costs (brokerage, etc) involved?

A: Knight Frank has an international desk in Mumbai which works with other of its international desks across 44 countries to offer integrated buying solutions to Indian clients. Indian buyers at this point of time are not charged a brokerage fee as the developer pays the fee to Knight Frank.

Qualitative Survey on Overseas Home Buying
- Conducted by the International Desk at Knight Frank India

Buyers Profile:

• Employed people: 45%
• Businessmen/ Self employed: 55%

Location Preference: London - Dubai - Singapore - Thailand & select cities in the US (New York - Sanfrancisco)

Buyers Open to under construction properties overseas: 

• Yes: 63%  No: 12% Maybe: 25%

Budget range: 

• Less than 1.5 Cr : 20%
• Between 1.5 - 3.5 Cr : 60%
• Between 3.5 - 7 Cr : 10%
• More than 7 Cr : 10%

Reasons to buy: 

• Investment : 50%
• Children education : 15%
• Lifestyle: 15%
• Business travel : 20%