Selling Indian Property While Living in Europe: What India Takes, and What Your New Country Wants

Every April, a message arrives from the neighbour who wants to buy my plot in Bangalore. Last April he tried something new: "A second runway is coming. Your plot is under the flight path. Values will drop. Sell now."

My response: "If that were true, why would you want to buy?" He didn't respond.

I bought this plot over twenty years ago, when I was still in India. I've since lived in China, France, and now Basel. The plot has sat there while the neighbourhood changed in ways I mostly hear about second-hand. One day the residents association found me on LinkedIn and demanded dues for obligations in an annex I'd never read. A court had already ruled those don't apply to plot owners, but I only knew that because I happened to look it up. In India, you'd hear about it in the news cycle. From Europe: nothing.

At some point I will sell. Not to that neighbour. What it costs me will depend less on India than on which country I live in on the day I sign, and most of what is written about NRI property sales assumes that country is the United States.

What India Takes

Property held for more than 24 months is a long-term capital asset. Since 23 July 2024, long-term gains on property are taxed at 12.5% without indexation, plus surcharge and 4% cess. Held for 24 months or less, the gain is taxed at your slab rate.

Two exemptions are open to non-residents: reinvesting the gain in a residential house in India, or putting up to ₹50 lakh into specified bonds within six months of the sale. Both keep the money in India. If the point of selling is to move the money to where you live, they solve the tax and defeat the purpose.

Two rules catch people who sold nothing in India for twenty years. Sell below the stamp duty value and India taxes the gain as if you had sold at it, with a 10% tolerance. And if you inherited the property, your cost is what the previous owner paid, not its value when you inherited it. India has no step-up on inheritance. That one comes from American articles, and it doesn't apply here.

The Buyer Withholds Before You See a Rupee

When the seller is a non-resident, the buyer has to deduct tax at source and in practice deducts it on the full sale price, not on your gain. On a property bought decades ago that is close enough not to matter. On anything bought in the last ten years it can mean several times your actual liability sitting with the Indian tax department until you file a return and the refund clears, into your NRO account.

The fix is a lower-deduction certificate from the Indian tax department, applied for before the sale, which tells the buyer to withhold at your real liability. It takes weeks. Apply before you sign the sale agreement, not after you have a buyer waiting.

Getting the Money to Europe

Sale proceeds land in your NRO account. From there, up to USD 1 million can leave India each financial year, with Form 15CA filed by you and Form 15CB from a chartered accountant. The limit covers everything leaving your NRO accounts that year, not just the sale.

The exception is the money you originally paid in from abroad. If the property was bought with NRE funds or money remitted from outside India, that original amount can be repatriated outside the USD 1 million limit, for up to two residential properties. Which account paid twenty years ago decides how easily the money comes out now, as the NRE/NRO piece explains.

What Your Country of Residence Wants

India gets the first claim because the property is in India. Whether your country of residence wants a second one varies more than any other part of this transaction. Three examples:

• Switzerland leaves foreign real estate out of the Swiss tax base altogether (Article 6 of the federal direct tax act, mirrored in cantonal law). It counts only to set the rate on your other income and wealth. The gain on an Indian sale is not taxed in Switzerland. That is my case, and it is the exception.
• Germany taxes private property sales only when the property was held for ten years or less (§23 EStG). Past ten years, Germany has no claim on the gain. Inside ten years, it belongs on your German return and the treaty decides how it is relieved. Do not assume that relief is total.
• The Netherlands has no capital gains tax on private property, so the sale itself creates no Dutch tax. The cost came earlier: the property sat in Box 3 every 1 January you owned it, and the relief Dutch rules give for foreign real estate has to be claimed on the return. It is not applied for you, and since 2023 it is calculated in a way that gives back less than it used to.

The same plot, sold on the same day, can cost three different amounts depending on which of these countries the seller calls home. If you have moved within Europe while owning it, the country you lived in when you bought it and the one you live in when you sell may treat it differently again.

Twelve Months Is the Right Lead Time

None of this is hard with time. All of it is expensive without it. A registered valuation, the original purchase documents and cost, the lower-deduction certificate, a view from your residence country on how it treats the gain, and a repatriation plan that fits the annual limit. Done in that order, the sale is a transaction. Done in reverse, it is a refund claim and a year of paperwork.

The neighbour's runway story works on people who don't know what they own, what it is worth, or what selling it costs from where they live. Knowing those three things is the only preparation that matters.