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Donald Trump birthright citizenship: Will it impact the Indian real estate market?

Jan 21, 2025 04:08 PM IST

Donald Trump birthright citizenship: Experts say the order signed by the US President may encourage some Indians to return and invest in real estate back home

US President Donald Trump has signed an executive order to end automatic birthright citizenship for children of non-permanent residents. A few experts say this order is expected to encourage Indians to return and invest in real estate back home rather than in the US.

"This is positive news for Indian real estate. It will be positive for Tier 1 real estate markets in India, especially Hyderabad, Bengaluru, Gurgaon, and Chennai, given that they are also technology/IT hubs that can provide opportunities to people coming back," Sandeep Reddy, co-founder at Propstack and Zapkey, posted on LinkedIn.

This policy shift will encourage Indians to go to the US, like other countries such as the Middle East, to earn money, but eventually, they may return and settle in India, he added.

Ravi Shankar Singh, managing director of Residential Transaction Services, Colliers India, said that this has created apprehension amongst resident Indians in the country. A big question that has arisen pertains to investing and owning property.

“There is no need for worry, given that buying and selling real estate in the US does not require one to be a citizen. However, recent trends have shown that NRIs have been actively investing in residential properties back home for various reasons, including wanting to be closer to their roots, having higher confidence in India’s economic growth, and having a backup plan should visa rules change. While there is no need for legal immigrants to worry, this trend of NRIs investing in India appears to continue.”

"In case the parents are working in the US on a permanent H1-B visa, then it means their children born on American soil won't become US citizens by birthright. This might lead them to redirect their investments to India for real estate opportunities. Out of the 10 clients we speak to, 8-9 buyers anticipate buying an apartment in cities like Bengaluru and Hyderabad because they want to return to India after some years. And after the recent changes, we may see an increased positive sentiment," Manjesh S Rao, Chief Real Estate Officer at BrokerInBlue, told HT.com.

"Some want to return to their cultural roots while others want to use their dollars to buy a luxury property in Bengaluru and Hyderabad," said Kiran Kumar, vice president of Hanu Reddy Realty.

There are a few legal experts, however, who believe this may not lead to a dramatic increase in the number of people on a work visa in the US to invest back home. "Property investment decisions are largely driven by appreciation and tax benefits in a particular country. Having said that, there may be a few Indians who will continue to invest in the US and hold a second property back home," they said.

Avnish Sharma, Partner in the Real Estate practice group Khaitan & Co, believes this may push more H1-B visa holders to consider investing in India as a safety net. Having said that, people who already have a green card and are settled in the US may think of investing there and have a second home investment back in India, as has been the case all along. It will not have a major impact on the real estate investment sentiment.

As per statista.com, the proportion of Indian buyers among foreign residential property buyers in the United States fluctuated between 2011 and 2024. In 2024, almost 10% of foreign buyers of property in the US hailed from India, making Indian buyers the fourth largest foreign buyer group in that year and registering the highest share of Indian buyers since 2011. In 2024, Chinese buyers were responsible for 11% of all foreign sales.

What does the executive order say?

As per the executive order, children born in the US will no longer be recognised as citizens if their father is not a US citizen or lawful permanent resident and their mother is either in the country illegally or present on a temporary visa, such as a student, work, or tourist visa.

The executive order effectively revokes the automatic citizenship granted to children born to parents who are on temporary work visas (like H-1B) or those awaiting green cards, explains Priyanka Kwatra, Advocate at the High Court of Karnataka.

The change, set to take effect in 30 days, targets automatic citizenship for children of parents unlawfully or temporarily residing in the country. Immigration advocates have responded by filing a lawsuit on Jan 20.

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