Navigating Global Real Estate: An Indian Investor's Playbook
Lalit Mukhi, a 40-year-old programme manager in Dubai, is among the growing number of Indian investors venturing into international real estate. This article explores the challenges and benefits of investing in properties abroad, from Dubai's high yields to London's prestige and Singapore's stability.
Real EstateInternational InvestmentsTax RegulationsRental IncomeProperty ManagementReal Estate NewsSep 03, 2025
For wealthy Indians, buying property abroad is not just about luxury and bragging rights; it is a strategic financial move. Dubai offers high rental yields and tax-free income, making it an attractive market. London, on the other hand, provides prestige and a strong currency, though with lower returns. Singapore ensures stability and a high quality of life, making it a preferred destination for those seeking a long-term investment.
However, overseas investments are governed by India’s Liberalized Remittance Scheme (LRS) rules and tax regulations. Legal complexities and tenant management add another layer of risk, making it essential for investors to plan carefully and align such investments with their long-term financial goals.
Under the LRS, remittances above ₹7 lakh for overseas property purchases attract a 20% tax collected at source (TCS). For instance, a remittance of ₹5 crore would incur ₹98.6 lakh in TCS. Although this can be adjusted against overall tax liability, it significantly affects cash flow. When Indians buy property abroad, taxes vary. In Dubai, there are no upfront taxes; only registration and agent fees apply. In London, standard stamp duty land tax (SDLT) ranges from zero to 12% based on property value, plus a 2% surcharge for foreign buyers, making the effective total up to 14%.
In Singapore, foreigners pay standard buyer’s stamp duty plus 60% additional buyer’s stamp duty (ABSD), making the total upfront duty far higher than for locals and placing Singapore among the world’s costliest property markets to enter.
Rental income from foreign properties is taxable in India under the head “income from house property.” It is added to the taxpayer’s total income and taxed according to the applicable income tax slab rate. If tax is paid on this income abroad, taxpayers can claim a foreign tax credit in India to avoid double taxation. Proper disclosure of such income is essential, typically through specified schedules, said Abhishek Goswami, principal partner and sales director-GCC markets, real-estate marketplace Square Yards.
Effective strategies to mitigate double taxation include leveraging the double tax avoidance agreement (DTAA) between India and the foreign country, and consulting tax professionals familiar with both jurisdictions. The DTAA is a treaty between two countries that ensures individuals and companies do not pay tax on the same income twice. For example, if an Indian resident earns income abroad, taxes paid in that foreign country can be credited against their Indian tax liability.
Indians must report the overseas property’s market value as of 31 March, cost of acquisition including purchase expenses, rent received converted to INR, outstanding mortgage principal, and interest paid (not deductible under Section 24B) in Schedule FA of their ITR.
Indian residents can remit up to $250,000 per fiscal year under the LRS. This limit applies to approved purposes, including overseas property purchases. Family members can also pool their individual allowances, effectively raising the overall limit. “The best and easiest way is self-funding. If the LRS limit doesn’t permit, then people buy in multiple names—across family members or multiple financial years,” said Sanjay Guha, founder and chief executive of Mumbai-headquartered property consultancy firm Acquist.
The other option is to take a loan abroad, but that may come with a set of challenges. “Local overseas mortgages may provide greater leverage and access to local interest rates but often require navigating foreign credit systems, meeting down-payment requirements, and handling complex documentation,” said Daga. While it is simpler in Dubai, in London, you would require a larger deposit and often a mortgage broker to access the right lenders. In London, property buyers usually need a minimum deposit of 5%, although putting down 10-20% is common to access better mortgage rates. In Singapore, credit checks can take weeks, delaying approvals.
Overseas luxury properties often deliver competitive rental yields, with cities like Dubai offering approximately 7% annual returns, while London and New York range between 3.5-4.5%. Indian luxury real estate generally offers yields between 2.5% and 4%, especially in key locations such as Mumbai and Delhi, said Goswami. Though rental yields abroad may be higher, Indian luxury properties attract stable, premium tenants and provide strong capital appreciation.
For affluent Indians, overseas property is not just about returns—it’s also about creating a global footprint and securing assets in the most dynamic cities in the world. “When you buy in places like London or Dubai, you’re not just getting a physical asset. You also have the backing of a stable economy, a strong currency, and a legal system that actually protects you—often more than in India,” Guha summed up.
Since investing in a foreign property involves high entry costs and stricter regulations, one must carefully plan their investment moves. A prudent strategy would be to blend high-yield markets such as Dubai with stable, prestigious destinations like London or Singapore. This would allow investors to secure solid financial returns and, in turn, align with their aspirations, lifestyle, and migration plans.
Managing properties abroad can be complex, as investors must handle tenants, maintenance, and legal requirements in unfamiliar markets. So, it would involve partnering with trusted local property management firms. In Dubai, you can get services like tenant sourcing, rent collection, maintenance, and legal compliance. Singapore also has licensed property managers who handle leasing, tenant relations, and repair. You will also find similar property management agents in London. Partnering with local property managers ensures legal compliance by strictly adhering to tenant laws, safety regulations, and lease agreements.
Buying property internationally is a bit like ordering off a global menu—Dubai serves up spice and tax-free sizzle, London offers classic prestige with a hefty price tag, and Singapore is about stability at a premium. Smart investing means finding the best fit for your needs.
Frequently Asked Questions
What are the upfront costs for buying property in Dubai?
In Dubai, there are no upfront taxes; only registration and agent fees apply.
What is the tax on rental income from foreign properties in India?
Rental income from foreign properties is taxable in India under the head 'income from house property' and is added to the taxpayer’s total income, taxed according to the applicable income tax slab rate.
What is the LRS limit for remittances for overseas property purchases?
Indian residents can remit up to $250,000 per fiscal year under the LRS for approved purposes, including overseas property purchases.
What are the challenges of taking a loan abroad for property purchase?
Local overseas mortgages may provide greater leverage and access to local interest rates but often require navigating foreign credit systems, meeting down-payment requirements, and handling complex documentation.
What are the benefits of investing in luxury properties in Dubai?
Dubai offers high rental yields, tax-free income, and a stable economy, making it an attractive market for luxury property investments.
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