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Foreign nationals eyeing the booming property market in Goa should do a reality check. The government has decided to ban sale of land to foreigners in the state.

The change is being carried out through an amendment in the Indian Registration Act, 1908. Post-amendment, sub-registrars will wield more powers to check the validity of the documents being submitted. “It’s a policy decision that foreigners will not be allowed to purchase land in Goa. Earlier, there were no proper powers (given) to the registration authorities in Goa to check whether the Reserve Bank of India had cleared a land deal,” said state finance minister Dayanand Narvekar. Four other states, including West Bengal and Jharkhand, have already amended the Act.

The government would try to incorporate the changes in Section 22 of the said Act during the budget session beginning March 24. Postamendment, sub-
registrars will be vested with the authority to scrutinise credentials of the buyer and also the source of his/her money. All documents submitted by a foreigner will also be vetted by the Goa police and the home department. If found questionable, the sub-registrar concerned will have the powers to revoke such a sale deed.

The sale of land to foreigners had become a contentious issue with the state government unearthing 400-odd cases of sale of agricultural property to foreigners. “Anybody with a sale deed can bring in two witnesses and register land in Goa. We have cases where foreigners come with suitcases of money to buy land here and the registrar had no right to question them. This is not right,” said Mr. Narvekar. “By giving more powers (to sub-registrars), we can check who buys land and what is their activity in Goa.”

A sub-registrar can also deny the sale of commercial land to foreigners, if their ‘business plan’ is not found to be satisfactory. With this, the government hopes to curb drug trafficking mainly patronised by many foreigners here, who operate out of their ‘holiday homes’ and ‘shacks’ along the beaches across the state.

At present, sale of property to foreign nationals is permitted under the Foreign Exchange Management Act (Fema) after a foreign national has spent more than 182 days in India in the preceding financial year. Land can be purchased for commercial purposes like setting up an industry or running a hotel. The transaction has to be registered with the registrar of companies and also with the local branch of RBI. Currently, a foreigner can also purchase land purely for personal use — like setting up a holiday home. In both cases, the foreigner has to prove his/her intentions to stay in Goa for an uncertain period of time.

Foreign nationals can also jointly buy or register land with an Indian partner, where the paper work becomes simple. According to government sources, in most cases while commercial permission is sought to run a restaurant, shack or be rented out, its most often also used for drug trafficking “done hand in glove with the local (Indian) partner”.

The issue of violations in sale of land to foreigners came to light in July last year, when local farmers in south Goa protested over sale of ‘agricultural land’ to a foreign national for the purpose of building a resort. The government then set up an enquiry committee to scrutinise all land dealings involving foreigners.

The committee stated that over 400 cases of the total 482 land sale since 1999 violated Fema norms.

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