Non-resident indians face tax hike on home properties

Non-resident Indian (NRI) overseas property buyers are facing higher taxes on their investments at home.

The Greater Hyderabad Municipal Corporation (GHMC) is proposing to fix a month's rent as a new annual property tax rate for residential properties that are not permanently occupied by their owners. Other Indian authorities are thought to be considering a similar move.

The plan is to plug a loophole in India’s tax collection system that allows owners who claiming to be residents to claim a 40% tax rebate, even though they are actually renting the house out.

GHMC Commissioner Krishna Babu told OPP this week that “a considerable number properties let out for rent” by owners based overseas and that the current year's average tax target per home is about Rupees 650 crore, which could “easily” rise to Rupees 1, 000.

Source: OPP.org.uk