Investing in overseas real estate from India: A checklist

Key takeaways

• Indian residents can buy property abroad under the RBI's Liberalised Remittance Scheme (LRS), with a limit of USD 250,000 per person per financial year.

• Family members can pool LRS limits — a family of 4 can remit up to USD 1,000,000 annually toward a joint purchase.

• Indian rental yields average 3–5% for residential property. Overseas markets like Dubai, the UK, and the US regularly deliver 5–7%.

• All rental income and capital gains from foreign property are taxable in India, though double taxation agreements can reduce the burden.

• You need a foreign currency account for deposits, rent collection, maintenance, and eventual sale proceeds.

• TCS on investment remittances above ₹10 lakh is 20% from April 2025 — but it is fully adjustable against your income tax.

Indian investors have long treated real estate as the go-to alternative to equities. But domestic property yields have remained stubbornly low. Average residential rental returns across India sit around 3–5%, with cities like Mumbai dipping to 2–3%.

That gap is driving a sharp shift. Indian high-net-worth individuals now allocate 22–25% of their total wealth to foreign real estate, according to the Knight Frank Wealth Report 2025. The reasons are straightforward: higher rental yields overseas, portfolio diversification beyond rupee-denominated assets, and in some cases, a path to global residency.

Whether you are exploring a holiday apartment in Dubai, a buy-to-let property in London, or a commercial unit in Singapore, this checklist walks you through every step — from understanding LRS and FEMA rules to managing taxes and currency transfers.

Why Indian investors are looking beyond domestic property

The Indian real estate market has delivered strong capital appreciation in recent years. Average home prices across the top 7 metros rose 10–24% between 2023 and 2025. But rental yields tell a different story.

Here is how Indian residential yields compare with popular overseas markets:

Sources: Global Property Guide Q4 2025, Knight Frank, Lodha Research. Yields are indicative averages and vary by city and property type.

Beyond yield, overseas property helps you hedge against rupee depreciation. The Indian rupee has lost roughly 3–3.5% against the US dollar annually over the past 20 years. Holding assets in a stronger currency adds an extra layer of return when calculated in rupee terms.

Fractional real estate platforms have also opened doors. You no longer need the full purchase price upfront. Some platforms allow investments from as little as USD 100, making global property accessible to a wider range of investors.

Your 8-point checklist for buying property abroad

1. Pick the right location

Indians actively invest in the UK, USA, UAE, Australia, the Netherlands, Germany, Singapore, and Canada. These countries offer mature property markets, clear foreign ownership laws, and relatively easy remote property management.

When evaluating a location, consider capital appreciation trends over the past 5–10 years, gross and net rental yield data, ease of purchase for foreign nationals (some countries restrict land ownership), stamp duty and transaction fees on entry and exit, property management infrastructure for remote landlords, and any residence-by-investment programmes if that aligns with your goals.

Dubai stands out for Indian buyers in particular. Indians accounted for roughly 40% ofDubai property buyers in recent years. Zero property tax and high rental demand are the primary draws.

2. Understand the LRS framework for capital transfer

The Liberalised Remittance Scheme is your legal gateway for moving money abroad. Here is what you need to know:

The RBI allows each Indian resident to remit up to USD 250,000 per financial year (April to March) under LRS. Both residential and commercial property purchases are permitted. Remittances must go through an authorised dealer (AD) bank with the correct purpose code — S0005 for overseas real estate investment.

Family pooling makes larger purchases possible. If you, your spouse, and two adult children each use your individual LRS limit, that is USD 1,000,000 in a single year. Every contributor must be named as a co-owner on the property title.

For properties exceeding your pooled annual limit, you can spread payments across multiple financial years. Many developers in Dubai and Southeast Asia offer staged payment plans that align with LRS cycles.

Keep your documentation airtight. Your bank will need your PAN card, KYC documents, Form A2 declaration, and proof of the transaction's nature. Mistakes in purpose codes or missing paperwork can trigger compliance issues during audits.

For a deeper dive, read our complete guide to the LRS scheme and foreign investments.

3. Open a foreign currency account

A foreign bank account is not just convenient for overseas real estate — it is practically essential. You need it for proof of funds during the purchase process; transferring the deposit and purchase amount; paying stamp duty, legal fees, and handover expenses; collecting rental income after the purchase; covering maintenance and management charges; and receiving sale proceeds if you exit.

Setting up individual bank accounts in each country is time-consuming and expensive. Many foreign banks require significant minimum balances and charge steep account opening fees for non-residents.

Winvesta's multi-currency account offers a simpler route. It provides foreign currency accounts in 30+ currencies through a single digital platform. You can set it up in minutes, transact in local currencies without opening country-specific bank accounts, and manage all your overseas property finances from one place.

4. Plan your financing

Cash remains king for overseas property purchases by Indian residents. Here is why:

Indian banks rarely approve loans for foreign property. Cross-border enforcement is complex, and most Indian lenders do not want to assume the risk. Foreign banks can sometimes extend mortgages to non-residents, but eligibility criteria are stricter. Expect higher down payments — typically 30–40% of the property value — and more documentation than a local buyer would face.

Your most reliable funding sources are LRS remittances (pooled across family members if needed and spread over years), combining LRS with an overseas loan from a foreign bank, and using existing overseas income or assets, if applicable.

If you plan to remit over multiple years, consider investing the initial remittances in liquid overseas assets until you have accumulated enough for the purchase. This approach also provides a currency hedge against rupee depreciation during the accumulation phase.

5. Get your tax planning right

Taxation is where most overseas property investors stumble. Here are the key rules for Indian residents:

Rental income from overseas property is taxable in India under "Income from House Property." You can claim a standard 30% deduction on net annual value. If you have already paid tax in the country where the property is located, claim a foreign tax credit under India's Double Taxation Avoidance Agreement (DTAA) with that country.

Capital gains on sale are also taxable in India. For property held over 24 months, long-term capital gains tax applies at 12.5% (as per the July 2024 budget changes). Short-term gains on property held under 24 months are taxed at your regular slab rate. Exemptions under Sections 54 and 54F are available, but only if you reinvest in a residential property in India.

TCS on remittances changed from April 2025. There is no TCS on total LRS remittances up to ₹10 lakh per PAN per year. Above ₹10 lakh, TCS of 20% applies on the excess amount for investment-related remittances. This is not an extra tax — you can claim it back when filing your ITR.

Foreign asset disclosure is mandatory. Report all overseas property under Schedule FA (Foreign Assets) in your income tax return. Non-disclosure can attract penalties under the Black Money Act.

Several countries offer favourable tax treatment for foreign property investors. The UK has well-established rules for non-resident landlords. Dubai charges zero property tax. Understanding the tax regime of your target country is just as important as understanding India's rules.

Winvesta is not a tax adviser. Tax treatment depends on your individual circumstances and may change. Consult a qualified tax professional before making investment decisions.

6. Handle due diligence and legal compliance

Before committing to a purchase, verify title deeds and property ownership history, check local zoning laws and land-use permissions, understand foreign ownership restrictions (some countries limit land ownership to leasehold for foreigners), engage a local solicitor or conveyancer who specialises in foreign buyer transactions, and confirm that RERA-equivalent regulations exist in the target country.

Under the Foreign Exchange Management Act (FEMA), Indian residents can purchase completed properties abroad through the LRS. However, investing through a special purpose vehicle (SPV) in a foreign entity engaged in "real estate activity" (buying and selling of land or property) is restricted under Overseas Direct Investment rules. Direct personal ownership is the simpler, more compliant route.

7. Set up property management

Managing a property from thousands of kilometres away requires planning. Most overseas markets have professional property management companies that handle tenant sourcing, rent collection, maintenance, and legal compliance for a fee of 8–12% of monthly rent.

Factor this cost into your yield calculations. A property yielding 6% gross might deliver closer to 4–4.5% net after management fees, insurance, maintenance, and vacancy periods.

8. Plan your exit strategy

Think about your exit before you buy. Understand the capital gains tax regime in the country of purchase. Check if there are restrictions on repatriating sale proceeds. Factor in currency conversion costs and timing. Under Indian law, sale proceeds from overseas property can be repatriated — but proper documentation and FEMA compliance are essential.

Step-by-step process: How to buy property abroad from India

Here is the practical workflow once you have identified a property:

1. Complete KYC with your authorised dealer bank and ensure your PAN is linked to your LRS records.
2. Open a multi-currency account (like Winvesta's) to handle deposits, payments, and rent in the target currency.
3. Submit Form A2 to your bank with purpose code S0005 and initiate the LRS remittance.
4. Engage a local solicitor in the target country to conduct due diligence on the property.
5. Transfer the deposit and sign the sale agreement. Ensure all LRS contributors are named as co-owners if pooling.
6. Complete the purchase, pay stamp duty and legal fees from your foreign currency account.
7. Set up property management and a local rental account for ongoing income.
8. Declare the asset in Schedule FA of your Indian income tax return from the next filing.

Documents you will need

Keep these ready before initiating a purchase: PAN card (mandatory for all LRS transactions), Aadhaar or passport for identity verification, Form A2 declaration for your bank, proof of source of funds, bank statements for the past 6–12 months, sale agreement or letter of intent from the seller or developer, and KYC documents as required by the foreign jurisdiction.

Common mistakes to avoid

Using the wrong purpose code. Always use S0005 for overseas real estate. An incorrect code creates compliance headaches during audits.

Forgetting to name all LRS contributors as co-owners. If family members pool their assets, each contributor must be named on the property title.

Ignoring foreign asset disclosure. Schedule FA in your ITR is mandatory for all overseas properties. Penalties for non-disclosure are steep.

Underestimating total costs. Beyond the purchase price, budget for stamp duty (1–7% depending on the country), legal fees, property management charges, insurance, and ongoing maintenance.

Assuming Indian banks will lend for overseas property. They almost certainly will not. Plan your financing through LRS and foreign lenders.

How Winvesta simplifies overseas property transactions

Managing foreign property from India involves frequent cross-border payments—deposits, legal fees, rent collection, maintenance charges, and, eventually, sale proceeds. Each transaction in a different currency can erode your returns through conversion fees and unfavourable exchange rates.

Winvesta's multi-currency account addresses this directly. It provides accounts in 30+ currencies through a single platform. You can receive rent in local currency without conversion losses, pay property expenses directly, and transfer funds between currencies at competitive rates.

Whether you are buying, renting out, selling, or simply maintaining overseas property, a dedicated multi-currency hub removes friction at every step.