In this article, Ashwini Gehlot of Institute of Law, Nirma University Ahmedabad discusses whether a citizen domiciled outside Goa buy a land in Goa or not.

Background

Many proposals were made by the Goa government to restrict outsiders from purchasing land in Goa but till now nothing much had happened. Goans do not like outsiders buying properties in Goa and for this particular reason, they demanded special status for Goa to stop the encroachment of outsiders. But despite all the efforts, Goa didn’t get special status.

In 2011, The Goa law commission has decided to propose a ban on sale of agricultural land to non-Goans in a bid to boost farming activities in the state. The commission plans to submit a report to the government on the same.^[1] the whole idea behind this report is to make Goa green and free from outsiders interference or we can say that for saving the Goa land for Goans and to use the land for best economic and ecological purpose.

Similarly, in 2013 also fearing that the Goa population will be going to become minority till 2021 the chief minister of Goa led a delegation to delhi expressing the concern to the central government and demanding special laws for the same.

Many a times requests were made to the central government to give special status to the state of Goa but the Goan people always gets disappointments regarding the same.

Likewise in the year 2013 The central government rejected the demand for special status for the state of Goa by saying that Ban on ‘other’ Indians buying residencies, settling in Goa is opposed to all civilised rules of citizenship^[2].

Efforts are constantly made in this issue, Recently in April 2017,

The state-run Goa Coastal Zone Management Authority (GCZMA) is contemplating the possibility of imposing a complete ban on non-Goans buying land or properties in areas notified as Coastal Regulation Zone (CRZ). GCZMA in its recently held meeting focuses on the possibility of imposing the ban on allowing the sale of properties or land in CRZ notified areas to those who are not from Goa.^[3] But the irony is in spite of making all these efforts no particular laws regarding the same has made which ban non-domiciled Goans to buy land in Goa. Now here comes the main question, Who can buy land in Goa?

Who can buy land in Goa?

Indian citizen domiciled outside Goa but living in India

Every Indian citizen whether domiciled in Goa or outside Goa can buy a land in Goa, because restricting Indian citizens from buying a land in their own country will be a violation of their fundamental rights.  And the demand of ban on sale of land and residences to persons not of Goan origin, Such restrictions one can think to be imposed on foreigners but to say that another Indian citizen cannot buy land in Goa for residence and settlement is a complete negation of a citizen’s right under Article 19(e) of the Constitution of India. That provision is a part of fundamental rights which cannot be diluted. India has a single citizenship and a ban on outsiders buying residencies and settling in Goa is opposed to all civilised rules of citizenship.^[4] So, it can be said that we can not restrict non domiciled Goan or person living outside Goa but is a citizen of India from buying land in Goa. even the agricultural and plantation land can be purchased by Indian citizen only.

Foreigners and Indian citizens residing outside India

The law relating to buying and selling of property by an individual resident outside India is administered by the Foreign Exchange Management Act (FEMA), 1999.

The FEMA act, is different from other acts, it is to a greater degree a restrictive act, which means everything under this act is prohibited unless otherwise specifically permitted. FEMA directs and regulates the purchasing of properties by , Persons of Indian Origin (PIO), Non-Resident Indians (NRI) and foreign citizens.^[5]

The Goa government has clarified on Thursday that under the extant rules and regulations, an Indian citizen resident outside India may acquire immovable property in India other than agricultural land, plantation or a farm house. However, citizens of some countries like Sri Lanka,  Pakistan, Afghanistan, Bangladesh, China,  Nepal, Iran, or Bhutan have take take the prior permission of the Reserve Bank of India (RBI) before acquiring any land.^[6]

Who Is A Foreigner?

Section  2(w) of the FEMA  defines a person resident outside of India i.e. foreigner. Which says it includes persons resides outside India for employment Or person have intentions to resides outside India for undetermined or uncertain period Or for carrying any business outside India.

Consideration of a Person as a Foreigner

Sec 2(v) of FEMA- An individual or we can say a foreign national who is residing in India for more than 182 days during the course of the preceding financial year for carrying on business  or taking up employment or for any other purpose which shows his intention to stay for an undetermined period can acquire immovable property in India as he would be a “Person Resident of in India’’^[7] under sec 2(v) of  FEMA.

Can Foreigners Buy Property In India By Incorporating A Company?

It is unlawful for a foreigner/individual living outside India to purchase immovable property in India until he/she satisfies any of the above-expressed conditions to end up becoming a person residing in India. It is illicit to purchase property on a tourist visa in India because the tourist visa lapses in 180 days.

In spite of the fact that it is unlawful for a foreigner to purchase property in India, they get it by registering a company under Indian law in Goa. As Section 2 (v) (iii) of FEMA states that, any agency, branch or office in India claimed or controlled or owned by a man residing outside India is considered as a property belonging to a person who is resident of India. Subsequently, a non-native/foreigner can buy a non-agricultural property in India by forming an organization/company and enrolling it under Indian Law. Given that every single pertinent law, rules, regulation or direction are appropriately obeyed and a statement in the prescribed form is filed with the RBI within the 90 days from the date of such acquisition.

Exceptions

The law disallows foreigners from obtaining property in India, however, there are two exemptions expressed in Section 6 (5) of FEMA, 1999 that enable them to buy property in India. These are;

1. An individual living outside India can acquire/buy property in India if he/she possess/owned such property when he/she was living in India
2. Or the property is inherited or acquired by the individual living outside of India from a man/person who was resident in India.

Area 6 (5) additionally expresses that the individual living outside India can also own/possess, invest or transfer/exchange Indian currency or security given that it has been acquired from an inhabitant in India or purchased when he/she was himself/herself occupant of India.

However, the citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, or Bhutan, who are residing in India can only purchase immovable property in India with the prior permission of the RBI, who will consider the request in consultation with the Government of India.^[8]

Rules Governing Property Purchase in Goa by Non-Residents

Rules for NRIs and PIOs

• A person who is a citizen of India and resident outside India is considered as a NRI.
• A person whose grandfather or father has been a citizen of India or a person who at any time held an Indian passport is considered as a PIO.
• PIOs and NRIs are allowed to buy any number of commercial or residential properties in India. And for this they do not have to take any special permission from the RBI nor filing of documents is required with RBI.
• Under the general RBI authorization accessible to NRIs and PIOs, funds must be transmitted to India through normal banking channel or funds held in his FCNR (B) / NRE /NRO account. No consideration should be paid outside India.
• The PIO / NRI may repatriate the sale proceeds of immovable property in India procured by a method for internal settlement through normal banking channels or by debit to FCNR (B) / NRE account. The sum to be repatriated should not surpass the amount paid for the purchase of the immovable property. Repatriation of sale proceeds of residential property bought by PIO / NRI out of foreign exchange is limited to not more than two such properties. If any capital gain is credited to the NRO account from where the PIO / NRI may send back a sum up to USD 1 million for every financial year subject to tax compliance.^[9]

Rules for Foreign Nationals of Non-Indian Origin^[10]

• Foreign Nationals are allowed to rent/ lease property in India for a time up to 5 years and have no need for any special permission from the RBI.
• Foreign organizations/companies who have been allowed to open an office in India are also permitted to acquire any immovable property in India, which is essential for or incidental for conducting such activity. This stipulation is not accessible to entities which are allowed to open liaison offices in India.
• Despite the fact that RBI rules permit a foreign national who is a Resident of India (i.e. person who stays in India for more than 182 days in the previous financial year) to purchase property, the rule likewise states that “… the person concerned would have to get the approvals, and satisfy the prerequisite if any, prescribed by other authorities, for example the concerned State Government”. We DO NOT advise foreign nationals to make an effort to buy property in Goa via this route at the moment.

Buying Process^[11]

When you choose to purchase a specific property, the accompanying procedure is prescribed. Kindly, however, take note of that this procedure may contrast marginally from Developer to Developer, contingent upon the property chosen.

• On receipt of your inquiry we will seek out the developers/owners to re-affirm accessibility of the property and revert to you.
• In spite of the fact that the properties on our site are of well-respected developers/owners, simply as an issue of “Due Diligence” we prescribe that a legitimate examination is done by a local Goa lawyer selected by you. In situations where the project has just been lawfully checked and pre-approved by Banks, in that case, this step is discretionary.
• Once the Lawyer finishes the scrutiny (generally a time of 4-5 days) and gives his approval, you have to choose whether you/your delegate needs to make a site visit/meet the developer/owner.
• When you choose to buy the property a Booking/Token Amount is to be paid by you to the Seller/Developer to affirm your intention to purchase the property. An official receipt for the same is issued to you by the Seller/Developer affirming receipt of your installment and that the property has been held for you.
• Land in Goa’s Sourcing and Coordination Fees of 2% + Govt. Administration Tax is additionally to be paid by you as at this time.
• The subsequent stage is to sign the “Agreement of Sale” (for properties under development). In the event that a property is prepared for possession, this is not required and one can specifically sign the last “Sale Deed” against payment of the balance sum due for the purchase of the property. Sale Deeds must be enlisted with the Registrar’s office.
• At the time of signing the “Agreement of Sale”, most Developers expect you to pay all installments according to their Payment Schedule fell due for installment up to the present phase of completion of construction. Once signed, the “Agreement of Sale” ought to be registered with the concerned authority. Consequent payment is to be made in installment according to the developer’s/engineer’s payment plan for the remaining part of the construction. The “Sale Deed” is signed once development/construction is finished and you can claim your property or can take possession of your property.
• Stamp Duty and Registration charges for property in Goa is presently a sum of 4% of the property value. Generally, half of this is paid at the time of the Agreement of Sale and the remaining amount is at the time of Sale Deed.
• It would be best if the person purchasing the property personally present in Goa for signing both, the Agreement of Sale and the Sale dead and also for registration of the documents but if this is not possible then the person can appoint a Power of Attorney to do this work on person’s’ behalf.

Guidelines for Buying Property^[12]

NRI/PIO’s desirous of purchasing property in Goa must be aware of the following:

1. Must have a legitimate OCI/PIO card issued by the concerned authority.
2. Appoint a Goa lawyer to verify and scrutinize the documents.
3. Must stick to FEMA (Foreign Exchange Management Act) rules predominant at the time.
4. Guarantee there is Nil Encumbrance on the property.
5. All the NOC’s (No complaint Certificates) are arranged in order.
6. On the off chance that the property is inherited it must have a probated will.
7. On account of land, it must not be assigned as ‘Agricultural Land’
8. House/property tax should be fully paid till date.
9. On account of house/apartment, title reports or duplicates from the first owner are required.
10. Close scrutiny of, municipal permissions, penalty clauses, payment plan, construction plan, violation of set-backs etc is highly prescribed.
11. Explore the property before buying it to see whether there are any defects in the material or construction.
12. Finalize the Agreement of Sale or Sale deed upon payment of government duties and property price.
13. Take the possession of the property according to the Agreement of Sale or Sale Deed.

References

^[1] Murari Shetye,No agri land for non-Goans, TOI, june 2 ,2011.

^[2] Ban on ‘other’ Indians buying residencies, settling in Goa is opposed to all civilised rules of citizenship, Navhind Times, August 3, 2014.

^[3] NOW THE NON-GoaNS WILL NOT BE ABLE TO BUY THE PROPERTIES COMING UNDER CRZ IN Goa, Goa Prism,April 25, 2017.

^[4] Supra 2

^[5]  http://www.saffronart.com/real-estate/Guidelines.aspx [Accessed 5 Jul. 2017].

^[6] Prakash kamat,Goa cracks down on property acquisition for foreign nationals, the hindu, MAY 23, 2016.

^[7] Supra 6.

^[8] Supra 5

^[9] Buygoaproperty.com. (2017). Buying in Goa | Buying Real Estate in Goa | Rules for Buying Property in Goa. [online] Available at: http://www.buygoaproperty.com/buying-property-in-goa.php [Accessed 11 Jul. 2017].

^[10] Landingoa.com. (2017). Buying and Selling Residential/Commercial Properties in Goa. [online] Available at: http://www.landingoa.com/buyingproperty.php [Accessed 11 Jul. 2017].

^[11]  Buygoaproperty.com. (2017). Buying in Goa | Buying Real Estate in Goa | Rules for Buying Property in Goa. [online] Available at: http://www.buygoaproperty.com/buying-property-in-goa.php [Accessed 11 Jul. 2017].

^[12] Anon, (2017). Guidelines for NRI’s Buying/Selling Property in Goa | Bonafide Goa Homes. [online] Available at: http://bonafidegoahomes.com/nri-guidelines/ [Accessed 11 Jul. 2017].