What are the laws of a foreigner buying a property in the US?

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What are the laws of a foreigner buying a property in the US?

I am in the process of buying a property in USA. I need to know if there is a different procedure as I am an Italian citizen and a resident in the UK.

Asked on November 4, 2010 under Real Estate Law, Michigan

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

A non-citizen can purchase US real estate.  However, there are a multitude of tax ramifications, financing options and legal requirements to be dealt with.  Property taxes and insurance don't represent any special problems; they should be the same regardless if you are a US citizen or not.  However, as for other tax consequences, things are different.  First off, you would need an Individual Taxpayer Identification Number (TIN) which you will use with all your tax transactions.  Your investment in real estates can be treated as investment income which can either be fixed or a periodic income, both of which are taxable.  This tax however does not apply though to all foreign investors.  Rates would vary depending on the tax entity that the foreign investor opted for; for instance, a corporation would be taxed differently than an individual.  There are also state taxes on real estate and other like matters which need to be considered.  Another important thing to remember when you're buying real estate is financing.  In today's economic climate,  financing can be difficult, especially for a foreign investor. 

You should strongly consider hiring a real estate attorney to guide you through the purchase process.  They can look over the sales contract, check on the title and related documents, and (perhaps most importantly) review your mortgage financing documents. Furthermore, experienced counsel can make necessary adjustments relating to various expenses involved in the purchase, as well as assist with tax questions (or at least recommend an accountant who can).  You can check on-line and look for a lawyer working within the state where you are considering purchasing a property.  If you need assistance with this, you can refer to www.AttorneyPages.com .  


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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