Buying a flat in India as an NRI — a practical playbook

A flat is the most common NRI property purchase in India, and also the one with the most moving parts. This page is apartment-specific — the RERA mechanics, carpet-area pricing rules, society vs association handover, GST on under-construction stock, occupancy and completion certificates, and the handover disputes that still dominate homeowner complaints. For the overarching diligence workflow see the buy-property checklist; for registration mechanics see property registration.

Ready-to-move vs under-construction — different risk profiles

Dimension	Ready-to-move	Under-construction
Price	10-20% premium	Builder discount
Delivery risk	None	Real, even post-RERA
GST	None	5% (12% for affordable: 1%)
OC / CC	Must already exist	Issued at completion
Rental cashflow	From month one	Only after possession
Visible quality	Known	Sample flat only
Interest during build	None	EMIs without rent

Both routes are fine with the right diligence; they are not the same product.

RERA — the regulator every buyer should use

The Real Estate (Regulation and Development) Act, 2016 forces every residential project above the state's size threshold (usually 500 sqm of land or 8 apartments) to register before it can be marketed. Each state runs its own RERA portal.

Before any token payment:

Look up the RERA registration number on the state portal. Confirm the promoter name, project name, registered launch and declared completion dates, approved plan, sanctioned FSI.
Read the quarterly project progress reports. Builders must upload construction progress; a stale page means a stalled project.
Check the complaints history on the same portal. Adjudication orders against the promoter in other projects are public.
Verify the escrow account — 70% of buyer payments must go to a project-specific escrow. Pay into that account, not a generic "collections" account.

No RERA number for an under-construction project is a walk-away. Even "pre-launch" sales are illegal before registration.

Carpet area, not super built-up

RERA mandates sale on carpet area — the net usable floor area within the walls of the flat, including internal partitions but excluding the external walls, balcony, utility area (counted separately with statutory multipliers), and shared spaces.

Super built-up area can be 25%–35% higher than carpet area in typical projects, which is why pre-RERA brochures loved it. For any RERA-registered project, the price per carpet-area square foot is the apples-to-apples number. If a seller or broker quotes only super built-up, work backwards.

Occupancy Certificate vs Completion Certificate

Both are issued by the local municipal authority, but they mean different things:

Completion Certificate (CC) — the building as-built matches the sanctioned plan. Confirms construction is legal.
Occupancy Certificate (OC) — the building is fit for habitation: essential services (water, electricity, sewerage, fire safety) are functional and inspected.

Never take possession of a flat without the OC. An OC-less flat:

Cannot be legally occupied — the municipality can disconnect utilities or issue a vacate notice.
Cannot be resold cleanly — banks refuse loans, most buyers refuse to close.
Attracts higher property tax (often penal rates for unauthorised occupation).
In states like Maharashtra and Karnataka, leaves the buyer exposed to demolition orders for any unauthorised construction the builder slipped in.

Builders routinely hand over possession "pending OC" to start collecting maintenance charges and finalise payments. Politely refuse. The clause that matters in the sale agreement: possession and final 5% payment against OC, not against "substantial completion".

Cooperative society vs Apartment Owners' Association vs Condominium

How the project is handed over to the residents dictates every subsequent decision — maintenance, common-area control, resale NOCs, redevelopment rights down the road.

Cooperative Housing Society — typical in Maharashtra, Gujarat, parts of West Bengal. Registered under the state Co-operative Societies Act; each flat owner holds shares in the society; the society owns the land and structure; individual allotment is by share certificate. Transfers require society NOC, and a set transfer fee.
Apartment Owners' Association (AOA) — typical in Karnataka (KAOA), Tamil Nadu, Kerala, and most of the South. Each flat is held as freehold; undivided share of land (UDS) is registered with each flat; common areas are held jointly. Transfers do not need an NOC; just a change in the association records.
Condominium — the federal/central pattern; similar to AOA in most practical effects.
Builder-controlled management company — the grey zone. Builders form their own "facility management company" and retain control of common areas, parking, club facilities indefinitely. This is the single biggest source of post-possession disputes.

Before signing the Agreement for Sale, ask in writing:

Which legal entity will hold the common areas, clubhouse, and open land?
By when must the builder hand over control to an AOA / society (RERA typically requires within 3 months of registration of 51% of the flats)?
What happens to the residual FSI / TDR / future-redevelopment rights — do they vest in the owners collectively, or does the builder retain them?
What is the transfer fee / society NOC cost on future resale?

Builders who hedge on these answers generally intend to keep control. That is not negotiable later.

GST on under-construction flats

5% GST on under-construction non-affordable flats (without input tax credit).
1% GST on affordable housing (carpet area ≤ 60 sqm in metros, ≤ 90 sqm elsewhere, value ≤ ₹45 lakh).
Nil GST on ready-to-move-in flats with OC already issued (the one unambiguous cost advantage of buying ready).

GST is over and above stamp duty. Insist that builders disclose GST explicitly in the cost sheet. Some builders quote "all-inclusive" prices that turn out to exclude GST once the sale deed is drafted.

The Agreement for Sale — flat-specific clauses to negotiate

Carpet area definition matches the RERA figure and is locked in; any variation at possession above ±3% triggers a refund on the per-sqft rate.
Parking allotment — covered / open / stilt / basement — specified by number, not "at builder's discretion".
Preferential Location Charges (PLC) capped and justified.
Amenity list — clubhouse, gym, pool, lifts, power backup — enumerated, not described in brochure language.
Possession date with a penalty clause (typically SBI MCLR + 2% on paid-in amounts) running from the grace period.
GST treatment stated explicitly and the split between construction value and land value is shown.
Maintenance mechanism — who collects, for how long, at what rate, escalation terms, when the builder exits.
Handover clause — the building will be handed over to an AOA / society within a specified period after OC and 51% sale.
Residual development rights clause — any remaining FSI / TDR on the plot vests in the owners collectively.
Exit / force-majeure — what happens if you cannot complete due to sanctions, FX controls, or personal circumstances.

Payment mechanics for NRIs

All payments via NRE, NRO, or FCNR(B) accounts, or inward remittance. Cash is a dealbreaker.
NRE-funded purchases are fully repatriable on eventual sale (up to the investment amount and on up to two residential properties). NRO-funded falls under the USD 1 million / FY cap.
Payment against the RERA-designated escrow account only.
Keep a payment trail — bank advice, SWIFT copies, FIRCs where applicable — for eventual repatriation documentation.
TDS under Section 194-IA: 1% on purchase consideration of ₹50 lakh or above when buying from a resident. File Form 26QB within 30 days and issue Form 16B to the seller. When buying from an NRI seller, Section 195 applies at the capital-gains rate on gross consideration — higher paperwork, different form (26QC / 27Q).

Home loans for NRIs

All major Indian banks offer NRI home loans — SBI, HDFC, ICICI, Axis, Kotak — at rates close to resident rates.

Practical points:

LTV — typically 75%–80% of property value for NRIs.
Tenure — usually capped at 20 years or borrower age 60, whichever is earlier.
Income documents — overseas salary slips, tax returns of the resident country for the last 2–3 years, employment contract.
Servicing — EMIs from NRE / NRO account. Pre-payments allowed, often without penalty on floating-rate loans.
Section 24 deduction — interest on self-occupied or let-out property is deductible against Indian rental income; principal repayment qualifies under Section 80C. Useful for NRIs with rental income in India.
Joint loan with resident co-applicant — common way to access slightly better terms; parent or sibling as co-applicant.

A loan tilts the purchase strongly toward ready-to-move stock, because EMIs start from disbursement while rent starts only after possession — a two-to-three-year negative carry in an under-construction project can materially hurt the investment case.

Stamp duty, registration, and other one-time costs

Stamp duty — state-determined, typically 4%–7% of the higher of sale consideration and the circle rate / ready-reckoner rate. Concessional rates for women buyers in many states.
Registration fee — usually 1%.
GST — 5% / 1% on under-construction; nil on OC-issued ready flats.
Stamp duty on the Agreement for Sale — in Maharashtra, Karnataka, Tamil Nadu, the full sale-deed duty is paid at the Agreement stage and set off on the final sale deed.
Brokerage — 1%–2% of sale price is common; negotiate.
Legal fees — 0.25%–1%; worth paying for an independent lawyer's opinion, not the builder's panel lawyer.

Budget roughly 8%–10% of headline sale price as the total wrap-up of stamp duty, registration, GST, brokerage, and legal fees combined.

Pre-purchase diligence specific to flats

Approved plan — match what's sanctioned against what's built. Extra floors or a covered terrace "sold" as a bonus are usually unauthorised.
Encumbrance Certificate on the plot, reflecting builder mortgages released before sale to you.
Parent title — how the builder got the plot (purchase / development agreement / JDA). JDA-built projects must have the landowner's consent to each sale.
Sanctioned capacity — number of flats + commercial units the plan approves.
Society formation status — if the project is several years old and still "builder-managed", something is wrong.
Maintenance arrears — on a resale flat, confirm no dues with the society / AOA / builder.
Rental comparables — if this is an investment purchase, check actual rents in the same building, not the builder's projection.

Handover — the step that still goes sideways

The old version of this page relayed a specific post-handover dispute: builder forms a "management authority" in parallel to residents trying to form a society, and the builder hangs on to residual control for years. That pattern has not disappeared under RERA. Typical indicators:

Builder appoints the initial "management committee" and extends its term indefinitely.
Books of account for corpus and maintenance are never audited.
Resale NOC / society transfer is gatekept and priced as a revenue stream.
Any relaxation in local FSI or TDR rules is used by the builder to add more flats because the land is still on its name.

RERA addresses this on paper — Section 11 requires the promoter to form an association within three months of the majority of flats being sold and to hand over the common areas and documents. Enforcement is uneven. Buyers' collective action through RERA complaints is the remedy when the builder drags its feet.

If you are buying in a project that has already been "handed over", confirm the AOA / society is registered, the parent title has been conveyed to the owners' body, and the books are audited. Absent these, the builder still controls the asset you think you bought.

Post-possession checklist

OC in hand before taking keys.
Possession letter signed with snag list attached.
Utility transfers — electricity, water, gas — into your name.
Property tax — apply for the first tax ID within the state's window (usually 90 days).
Mutation in municipal records.
Insurance — structure cover at minimum.
Maintenance — pay into the AOA / society account, not a builder-controlled account, as soon as handover happens.
Tenant setup (if let out) — rental agreement above 11 months is registrable; TDS on rent to NRI is deducted by tenant at 30%+ unless a lower certificate is obtained.
Will — update to include the Indian flat.

Summary

Use the state RERA portal before paying anything on under-construction stock. Register the project, verify escrow, check complaints.
Buy on carpet area, refuse super-built-up pricing.
OC is non-negotiable before taking possession; CC is about legal construction.
Understand whether you are buying into a society, AOA, or a builder-managed company — it shapes every later decision.
GST on under-construction (5% / 1%) is a real cost. Nil on ready-to-move with OC.
Pay only through NRE/NRO/FCNR channels into the RERA-designated escrow account.
Budget 8%–10% of sale price in wrap-up costs beyond the headline price.
Do not take possession against promises. Insist on OC, signed snag list, parent title conveyance, and society / AOA registration.