What is a Builder Floor Apartment?

A Builder Floor Apartment refers to an independent residential unit built on a single floor of a low-rise building (usually 2 to 4 floors). Each floor typically has one apartment, offering more privacy and independence than high-rise apartments.

Key Features:

• One apartment per floor

• No or limited shared amenities (unlike gated communities)

• Separate entry and more control over space

• Often built on smaller plots, sometimes by local builders or individual owners

2. Why Invest in Builder Floors in Chennai?

Location Advantage

Chennai is:

• A leading IT, automobile, and manufacturing hub

• Seeing continuous infrastructure development (Metro expansion, expressways, etc.)

• Home to top educational institutions & medical facilities

High Rental Demand

• NRIs can earn steady rental income from IT professionals, students, or expats.

Appreciation Potential

• Upcoming areas like OMR, ECR, Velachery, Anna Nagar, and Porur are witnessing price appreciation.

Customization

• Builder floors allow more flexibility to design interiors as per personal preference.

Lower Maintenance Costs

• No high charges for swimming pools, gyms, etc.

Better Privacy & Ownership

• Independent access and fewer neighbors.

3. Legal Eligibility for NRIs

Who qualifies as NRI for property investment?

• Indian citizens residing abroad for employment, business, or studies.

What can NRIs buy?  Residential properties (apartments, builder floors, villas) ? Commercial properties ? No agricultural land, farmhouses, or plantations (unless inherited)

Regulations:

• Governed by FEMA (Foreign Exchange Management Act)

• No special permission required for residential property.

4. How NRIs Can Fund the Investment

Funding Options:

1. Self-Funding

   • Through NRE (Non-Resident External) or NRO (Non-Resident Ordinary) accounts.

   • Repatriation possible up to two residential properties.

2. Home Loan

   • NRIs are eligible for home loans from Indian banks & NBFCs.

   • Loan can be repaid through:

     • NRE/NRO accounts

     • Remittances from abroad

     • Rental income from property

5. Essential Documents Required

For Property Purchase:

• Valid Indian Passport & Visa copy

• OCI (Overseas Citizen of India) Card (if applicable)

• PAN Card

• Proof of Address (local & overseas)

• Recent photographs

• Power of Attorney (if authorizing someone to act on your behalf)

From Builder/Seller:

• Sale deed & title deed

• Encumbrance certificate (ensures no legal dues on property)

• Building plan approval by CMDA (Chennai Metropolitan Development Authority)

• Completion certificate & occupancy certificate

• Property tax receipts

• NOC (No Objection Certificate) from society, municipality.

6. Process of Buying Builder Floor in Chennai

Step 1: Market Research

• Research locations with good infrastructure, growth potential, and rental demand.

• Popular Areas: OMR (IT Corridor), ECR, Adyar, Velachery, Anna Nagar, Tambaram, Porur.

Step 2: Engage a Reputed Builder or Seller

• Check track record, past projects, legal clearances.

• Avoid small builders without proper documentation.

Step 3: Legal Due Diligence

• Hire a real estate lawyer in Chennai.

• Verify:

  • Title deed

  • Land use permissions

  • Encumbrance certificate

  • Building approvals

Step 4: Financing

• Arrange funds or apply for an NRI home loan.

• Get a Pre-Approval letter from bank for faster processing.

Step 5: Sale Agreement

• Sign an agreement mentioning:

  • Total cost, payment plan

  • Delivery date

  • Penalties for delays

  • Cancellation clauses

Step 6: Registration

• Register the sale deed at the Registrar’s Office in Chennai.

• Pay applicable Stamp Duty (7%) + Registration Fee (4%) on market value.

7. Taxation for NRIs

Income Tax:

• Rental income taxable in India (after standard deductions).

• NRIs must file IT Returns in India for income generated here.

Capital Gains Tax:

• If sold after 2 years: Long-term capital gains (LTCG) taxed at 20% + surcharge & cess (benefit of indexation allowed).

• If sold within 2 years: Short-term capital gains taxed as per slab.

Double Taxation Avoidance Agreement (DTAA):

• Can avoid double taxation by availing benefits under DTAA (India has agreements with many countries like USA, UK, UAE, etc.).

8. Repatriation of Funds

NRIs can:

• Repatriate up to USD 1 million per financial year from their NRO account (sale proceeds, rent, etc.).

• Sale proceeds of maximum 2 residential properties can be repatriated, if purchased with NRE/FCNR funds.

9. Power of Attorney (PoA)

If you cannot travel to India, you can:

• Assign Power of Attorney (PoA) to a trusted person (family, lawyer).

• Must be notarized and attested by Indian embassy in your residing country.

10. Risks & Tips for NRIs Before Buying Builder Floor Apartment in Chennai? 

Risks:

• Unverified builders

• Legal disputes over property title

• Poor construction quality

• Delays in delivery

Tips:

• Due diligence is key.

• Always check RERA (Real Estate Regulatory Authority) registration.

• Prefer ready-to-move-in properties to avoid project delays.

• Engage a local property manager if planning to rent it out.

• Consult with a qualified tax consultant for filing returns in India.

Investing in Builder Floor Apartments in Chennai can be a profitable option for NRIs, offering privacy, customization, and rental potential. However, thorough legal checks and professional advice are essential to ensure a safe and smooth transaction.

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