All Topics / Overseas Deals / Investing in India

Viewing 12 posts - 1 through 12 (of 12 total)
  • Profile photo of ankitjainankitjain
    Participant
    @ankitjain
    Join Date: 2006
    Post Count: 27

    Hi, Do the rules of negative gearing apply to Australian residents buying property overseas? I am an Australian citizen of Indian origin. I would like to buy property in India. I wish to get the loan from an international bank such as HSBC, Citibank etc which is present both in India and Australia. Of course the catch is if negative gearing would still apply to myself. Where can I get clarification regarding this from? Is this possible? I would rent out the property in India of course.

    Regards
    Amit

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Must admit i have financed deals all over the world but India would be a first.

    You will not find that either of the lenders you mentioned here in Oz would lend on an Indian security. Possibly if you approached their Indian branch they could give you their poilcy on FN lending.

    It is the same for clients wishing to purchase in the USA and maybe even Citibank or HSBC clients and wonder why they won’t lend to them over there.

    Good luck.

    Richard Taylor
    Residential & Commercial Finance Broker
    Ph: 07 3720 1888
    [email protected]

    Richard Taylor | Australia's leading private lender

    Profile photo of redwingredwing
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    @redwing
    Join Date: 2003
    Post Count: 2,733

    I see Harvard and Yale are looking at building Universities in India..I presume this will affect the International student Market of Australia?

    “Money is a currency, like electricity and it requires momentum to make it Effective”
    Count The Currency With This Online Positive Cashflow Calculator

    Profile photo of ankitjainankitjain
    Participant
    @ankitjain
    Join Date: 2006
    Post Count: 27

    Property in India is doubling every 3 years currently. Being an Australian citizen of Indian origin I find it easy to relate to that market and I know people who can alteast go and visit the property if the need be. It is all a case of how much does it increase!!!. I went to India over Christmas. I got a loan pre-approval from ICICI bank (India’s largest private bank) on my recent trip.
    I rang up Citibank Australia today and they said that I need to talk to the local branch i.e. Citibank branch in India.

    So based on these two things —

    1. Do negative gearing rules apply in India (or any overseas country e.g. USA etc)?
    2. I would be more comfortable going via a global bank e.g. Citibank or HSBC – don’t know how much of a presence ANZ has in India.

    I will find a bank – that is not a problem — By posting on this forum all I am trying to find out is – does this model work? Can I buy property in any overseas country (in my case it would be India) and claim negative gearing in Australia? How about paying taxes at two places – tax in India on rent received in India? E.g. If you had a USA property would you do a tax return in USA as well?

    Please advice?
    Regards

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    As i stated earlier funding the deal is no problem but you would not fund it from an Australia Bank based here.

    Double Tax Agreements
    There are Double Taxation Agreements between Australia and a number of countries. These agreements mean that, in most cases, taxation is only imposed by the country of residence and not by the country where the income is sourced. However, the country where the income is sourced may impose withholding tax on dividends, interest and royalties.

    India if you check from the ATO website is one of those Countries.

    Richard Taylor
    Residential & Commercial Finance Broker
    Ph: 07 3720 1888
    [email protected]

    Richard Taylor | Australia's leading private lender

    Profile photo of pyramidpyramid
    Participant
    @pyramid
    Join Date: 2005
    Post Count: 64

    I have heard (may be true, may be a rumour) that it is impossible to get tenants out of a property because the legislation in India is very landlord unfriendly. Even if they default![wha]

    Cheers
    Pyramid

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213

    Namaste Amit

    I beleive you can negative gear property overseas. Would you be making such a loss over there? From what I have heard yields are rather high over there – not sure of the interest rates tho.

    Pyramid, where the legislation is unfriendly, you usually will find other other methods……

    Terryw
    Discover Home Loans
    Parramatta
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    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of redwingredwing
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    @redwing
    Join Date: 2003
    Post Count: 2,733

    If you get a chance read Greg ROBERTS (Australian)book about his time in India, Johny DEPP has bought the rights to make it into a movie..

    Ties in with Terrys comment

    “Money is a currency, like electricity and it requires momentum to make it Effective”
    Count The Currency With This Online Positive Cashflow Calculator

    Profile photo of Chief WigamChief Wigam
    Participant
    @chief-wigam
    Join Date: 2004
    Post Count: 60

    Hey Amit, I just came across this thread. I was wondering whether you bought property in India and where? I have a friend who recently bought there. He was eduacated there and his friends who are still there are making truck loads on property.

    Did you find out about the negative gearing side? I would have thought you could not do it since the Aussie govt incentive in allowing neg gearing is to provide accommodation for Australians in Australia.

    We find comfort among those who agree with us – growth among those who don’t. Frank A. Clark.

    Profile photo of Dave LDave L
    Member
    @dave-l
    Join Date: 2005
    Post Count: 40

    I am currently in India at the moment and doing a bit of research into the property market in Goa. I hope to get there in about two weeks for a first hand look and from all accounts property there is still very cheap ie 30 -40k for a 1 bedroom app. The returns on this is in the range of 5-10% but the capital growth is quite large I have no official figures as yet but over the last 3-4 years it has almost trippled. Most of the property is being bought by expats as it is a very popular holiday destination and construction is booming over here.
    I see some devlopment company shares rising last year between 600-1000% not bad money if you bought into them early. There are restrictions on ownership in that you need to live there for 182 days to qualify for resident visa which allows ownership or be a national of course.
    Anyway shall continue with the research and keep all posted as I find out more.

    Dave

    Profile photo of grossrealisationgrossrealisation
    Member
    @grossrealisation
    Join Date: 2005
    Post Count: 1,031

    hi ankitjain
    not sure if this will help but a group called propertynet international
    lankan bal ( a very switched on both real estate agent and investor)
    email [email protected]
    do both investing in india and sri lanka and have investors from there investing here and they should be able to answer your questions
    02 98965000 ph
    I have no involvement in there company and this is just for information.
    I have purchased sites from them

    here to help
    If you want to get involved in some of the projects I’m involved in email to [email protected]

    Profile photo of kiwiduvetkiwiduvet
    Member
    @kiwiduvet
    Join Date: 2004
    Post Count: 92

    Redwing is that the Book “Shantaram” I got halfway through it a very good insight to things there though

    when the going gets weird the weird turn pro

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