Reports are emerging that US President Donald Trump is contemplating imposing a 5% Tax on all Overseas Remittances.
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Some reports say it could be in effect as early as July this year.
In 2024, NRIs sent a record $129.4 billion in remittances to India, a new high for the country.
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2024 is the third consecutive year that India received over $100 billion in remittances. India remains the top recipient of remittances globally.
With this new tax, for every One Lakh Rupees an NRI sends to India, IRS will take 5000 Rupees.
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Trump believes that money earned there is helpful for the economies of other countries
This appears simple, but it will have a big impact, especially on the real estate in Hyderabad.
NRI buyers, especially from the US, make up a big part of the mid to high-end residential market in Hyderabad.
Hyderabad Real Estate is already sluggish under the pressure of HYDRAA Demolitions and the slowdown that took place under Revanth Reddy’s Rule.
The returns associated with Hyderabad Real Estate have been low, and now with this extra 5% cost will mean that investing here will be less fancy.
Many regular investors will start looking away from Hyderabad, at least for a while.
But then, there is also a good side to this situation.
For many years, NRIs have been investing so much in Hyderabad and are inflating the Real Estate.
Most of these assets are parked without proper usage or returns.
Hence, the purchase of Flats and Plots has become difficult for the Middle-Class and upper-middle-class.
Probably, this will help bring in a correction in Hyderabad Real Estate and make things affordable for the middle class.
On the flipside, this 5% Tax may impact the NRIs in other ways. Their plans of supporting aging parents, funding a sibling’s education, etc, will also be affected.
Keeping aside Hyderabad, this will also have a bearing on Amaravati. This rule may come when the enquiries & remittances towards real estate in Amaravati have just begun.
This rule means the investments will slow down, and it is a setback for an aspiring city, and at the same time, will give some room for the domestic investors by keeping the prices in check, away from irrational hedging.
