Property tax in India for foreigners (UK guide)

This guide is for informational purposes only and does not constitute tax advice. Get professional tax advice and guidance from your lawyer or tax advisor when dealing with property taxes.

Considering buying property in India? You might be considering moving there permanently from the UK, or renting out a property you already own to earn some extra income.

Whatever your plans, you need to get to grips with property taxes in India and how they apply to foreign nationals. We’re here to help, with a rundown of all the main India property taxes you need to know about, including current tax rates.

We’ll also show you a cost-effective way to pay property tax and other expenses in India from the money services provider Wise - the Wise account. It’s not a bank account but offers some similar features, and your money is safeguarded.

Over 14.8 million people worldwide use Wise to send, spend and convert money in pounds and 40+ more currencies – for low, transparent fees and no-markup exchange rates close to what you can see on Google. Plus, you’ll get dedicated support and volume discounts when sending large amounts.

➡️ Learn more about the Wise account

Do foreigners pay tax in India?

Yes, foreign nationals - including British citizens - do pay tax in India, but it all depends on whether they are classed as resident or non-resident for tax purposes.

You’re considered a tax resident of India if:¹

• You live there permanently or spent more than 182 days in the country in the previous tax year year
• You spent more than 60 days there in the previous tax year, and spent 4 full years living there in the years immediately before this tax year

If you’re classed as a resident, this means you have to pay income and other taxes on worldwide earnings and income.

If you spend less than 182 days in the country (for example, if you split your time between India and the UK, or another country) per year, you’re considered a non-resident.

This means you’ll only have to pay income tax on anything you earn in India. Other income and earnings will be taxed in the country you’re considered to be domiciled or a permanent resident in - for example, the UK.

Who has to pay property tax in India?

Everyone who buys, sells or owns property in India will probably have to pay property tax.

However, which ones you’ll have to pay, the rates, exemptions and reliefs vary considerably between the different states and territories of the country. It’s best to get in touch with the local authority in the area your property is based in to find out more.

Property taxes in India for foreigners - an overview

If you buy, sell, own or rent out property in India, you’ll need to read up on the different types of property taxes and which ones apply to you.

There are quite a few of them, and they apply to both Indian citizens and foreign nationals.

Here’s an overview, with more details on each below:

Taxes when you buy a property in India

Property Transfer Tax

Also known as Stamp Duty, this tax is paid by the buyer when purchasing residential property in India. The rate varies by state, but is generally between 5% and 7% of the total purchase price.²

Taxes for selling property in India

Capital gains tax (CGT)

Capital gains tax (CGT) is paid on the profit you make when you sell a property in India. Profit means the amount you sell it for, minus the amount you paid for it originally.

CGT rates in India vary depending on when you bought the property and how long you’ve owned it:³

• Short Term Capital Gains (STCG) - if you sell the property within 2 years, you’ll pay tax according to personal income tax rates
• Long Term Capital Gains (LTCG) - if you sell the property after 2 years, you’ll pay a CGT rate of 12.5%.

If you’re planning on selling property in India and bringing the proceeds back to the UK, you may also need to find out whether UK Capital Gains Tax rules will apply.

It’s worth getting specialist tax advice on this, to help you understand your obligations and which country’s tax laws apply to you.

Annual property taxes in India

There is also an annual tax every property owner in India must pay.

These are collected by local authorities in each Indian state, and the funds are used to pay for public services such as road repairs, sewer maintenance and street lighting.

The rate varies between states, but it's generally somewhere between 0.2% and 3% of the property’s annual value⁴ - as assessed by the local authority.

How is property tax in India calculated?

Different states in India use different methods to calculate property tax. There are three main methods:⁵

1. Capital Value System (CVS) - tax is applied as a percentage of the market value of the property
2. Annual Rental Value System or Rateable Value System (RVS) - tax is calculated based on the yearly rental value of the property (whether or not it is actually rented out)
3. Unit Area Value System (UAS) - tax is levied based on a calculation of the per unit price, with a fixed price per square foot, per month.

Taxes on rental income in India

If you rent out your property in India, there are two main taxes you need to be aware of.

Withholding tax

Withholding tax on rental income is charged at a flat rate of 15%, based on the gross rent. It's credited against your total income tax liability.²

Income tax

There’s also income tax to pay on rental property income, with rates ranging from 0% to 30% depending on your taxable income.²

Send money to India with Wise

If you own or rent out property abroad while still living in the UK, you’ll need a way to manage your money between currencies. You’ll have bills to pay in India, as well as taxes.

Wise offers a cost-effective solution, with a powerful multi-currency account that lets you send money to India for low, transparent fees and mid-market exchange rates.

Plus, you can get a Wise card to spend in Indian rupees whenever you’re next in India. This clever contactless card automatically converts currency at the mid-market exchange rate, only adding a tiny currency conversion fee, whenever you spend, making it easier to cover everyday expenses.

✅ Sign up with Wise for free

**Investments in funds are never guaranteed and your capital can be at risk. In the UK, Interest and Stocks are provided by Wise Assets — this is the trading name of Wise Assets UK Ltd, a subsidiary of Wise. Wise Assets UK Ltd is authorised as an investment firm and regulated by the Financial Conduct Authority (FCA). Our FCA number is 839689. We do not give investment advice, and you may be subject to pay tax. If you're not sure, seek qualified advice. You can find more information about the funds on our website.

Sources used:

Sources last checked 14-Nov-2025