Introduction: Why NRIs Choose Mumbai for Luxury Real Estate

Mumbai isn’t just India’s financial capital—it is the city where luxury real estate has become a global talking point. For Non-Resident Indians (NRIs), Mumbai continues to be the most aspirational property market in India, offering high-value assets, stable appreciation, and lifestyle-driven investments.

In 2025, the cost of luxury property in Mumbai is soaring, powered by new infrastructure projects, global investments, and redevelopment supply. But for NRIs, buying luxury flats in Mumbai comes with specific rules, tax implications, and regulatory guidelines that must be understood before entering a transaction.

This guide provides a complete roadmap for NRIs buying luxury property in Mumbai—covering legal rules, Reserve Bank of India (RBI) guidelines, tax liabilities, financing options, and the best locations to invest in 2025.

Can NRIs Buy Property in Mumbai?

The Foreign Exchange Management Act (FEMA) governs NRI property ownership in India. According to RBI regulations:

• Allowed: NRIs can freely purchase residential and commercial property in Mumbai, including luxury flats, penthouses, and second homes.
• Not Allowed: NRIs cannot buy agricultural land, plantation property, or farmhouses in India.
• Joint Ownership: NRIs can co-own property with another NRI or an Indian resident (but not with a foreign citizen who is not of Indian origin).

NRIs don’t need RBI approval for residential property purchases, making Mumbai’s luxury market relatively easy to access.

Documentation Required for NRI Property Purchase

When buying a luxury flat in Mumbai, NRIs must prepare key documents to avoid delays:

• Valid Indian Passport or OCI Card (for Overseas Citizens of India).
• PAN Card – Mandatory for property registration and taxation.
• Proof of Address (both overseas and Indian, if available).
• Power of Attorney (PoA) – If the NRI cannot be physically present in India, a registered PoA holder can execute agreements on their behalf.
• Bank Account in India (NRE/NRO) – All transactions must be routed through an NRE (Non-Resident External) or NRO (Non-Resident Ordinary) account.

How NRIs Can Pay for Property in Mumbai

Under FEMA guidelines, NRIs can pay for property in India only through:

• Funds remitted from abroad via banking channels.
• NRE/NRO bank accounts in India.
• FCNR (Foreign Currency Non-Resident) deposits.

Cash payments are strictly prohibited. For NRIs buying luxury apartments in Mumbai, most developers require payments to be made in phased installments linked to construction milestones.

NRI Home Loans for Mumbai Properties

Many NRIs finance property purchases in Mumbai through NRI home loans offered by Indian banks.

• Eligibility: Available for NRIs with stable overseas income.
• Loan-to-Value Ratio (LTV): Generally, banks offer up to 80% of property value, with the rest as down payment.
• Tenure: Maximum of 20–25 years.
• Repayment: EMI payments must be made through an NRE/NRO account.

Banks like HDFC, ICICI, SBI, and Axis actively lend to NRIs purchasing premium real estate in Mumbai.

Tax Rules for NRIs Buying Property in Mumbai

Taxes play a crucial role in NRI real estate investments:

1. Stamp Duty & Registration

• NRIs must pay stamp duty (5–6%) and registration charges (1%), just like resident Indians.

2. Income Tax on Rental Income

• Rental income from Mumbai luxury flats is taxable in India.
• NRIs can claim deductions (standard 30% deduction, municipal taxes, interest on home loans).
• Double Tax Avoidance Agreement (DTAA) can help NRIs avoid being taxed both abroad and in India.

3. Capital Gains Tax

• Short-Term Capital Gains (STCG): If sold within 24 months, gains are taxed at the applicable slab rate.
• Long-Term Capital Gains (LTCG): If held for over 24 months, gains are taxed at 20% with indexation benefits.
• TDS (Tax Deducted at Source) applies on property sale proceeds.

4. Wealth & Inheritance

• India does not levy a wealth tax. However, if property is inherited, tax implications arise only at the time of sale.

NRI Repatriation of Funds

One of the most common questions from NRIs: Can I repatriate my sale proceeds abroad?

Yes, NRIs can repatriate up to USD 1 million per financial year, subject to:

• Payment of applicable taxes in India.
• Proof of original investment through NRE/NRO accounts.
• Proper documentation of the property transaction.

Best Areas for NRIs to Buy Luxury Property in Mumbai (2025)

1. South Mumbai (Malabar Hill, Walkeshwar, Marine Drive)

• Ultra-luxury sea-facing apartments, priced at ₹1.3–1.7 lakh per sq. ft.
• Limited new supply, strong long-term appreciation.
• Attracts legacy investors and family offices.

2. Bandra & Juhu

• Celebrity-driven demand, boutique low-rise apartments.
• Prices average ₹75,000–1.1 lakh per sq. ft.
• Popular with NRIs seeking a modern lifestyle and brand value.

3. Worli & Lower Parel

• Iconic luxury towers like Lodha World One and Oberoi 360 West.
• Prices at ₹65,000–1.05 lakh per sq. ft.
• Attractive for NRIs due to its central location and expat-friendly ecosystem.

4. Powai, Chembur, Navi Mumbai

• Emerging micro-markets with strong rental yields.
• Prices range ₹35,000–60,000 per sq. ft., offering relative affordability.
• Benefiting from infrastructure projects like MTHL and Coastal Road.

Why NRIs Prefer Mumbai Over Other Indian Cities

• Global Connectivity: Direct flights to London, New York, Dubai, and Singapore.
• Financial Hub: India’s wealth creation capital, home to global banks and stock exchanges.
• Cultural Capital: Film industry, fashion, and arts contribute to lifestyle appeal.
• Strong Returns: Mumbai luxury property has historically appreciated faster than Bengaluru, Pune, or Delhi.

Tips for NRIs Buying Luxury Homes in Mumbai

1. Always work with a RERA-registered developer.
2. Conduct legal due diligence on land titles and approvals.
3. Use a trusted property advisor or platform specializing in luxury real estate.
4. Structure payments through official banking channels only.
5. Plan for tax liabilities well in advance to optimize gains.

Conclusion: Making the Right Move

For NRIs, buying a luxury property in Mumbai in 2025 is not just a financial decision—it is an investment in legacy, lifestyle, and status. With strong capital appreciation potential, world-class infrastructure, and stable regulatory frameworks, Mumbai continues to be the No.1 city for NRI real estate investments in India.

But navigating developer credibility, tax rules, and legal compliance can be complex. That’s why curated platforms like HomeSharp are becoming the preferred choice for discerning buyers. HomeSharp is India’s definitive luxury real estate platform, offering verified listings, legal due diligence, and market intelligence tailored for HNIs and NRIs.

For those searching to buy a luxury flat in Mumbai, HomeSharp ensures a transparent, data-backed, and personalized experience—helping NRIs access India’s most elite property market with confidence.