Below is a list of the most common questions that we have
been asked. If you would like more information or have questions that you would
like answered then contact us here.
- Is it worthwhile to invest in the US property market? Most definitely. The returns available across a large number of US cities is incredible and one only needs to put in a bit of effort to reap the rewards.
- Can a foreigner purchase property in the US? Yes.
- What business structure should I use when buying a US property? This depends on your own personal circumstances and objectives. The most common method is by starting a Limited Liability Company, this is ideal for property investors and has many tax and legal advantages.
- Do I have to file a US Tax Return? Yes, by having income generating real estate, you are deemed to be carrying out a business and will need to pay tax. The type of tax return you need to file will depend on your chosen business structure and circumstance.
- Do you need to pay Stamp Duty in the US? Generally, no. There is no lump sum tax payment that needs to be made when purchasing a US property but there are annual state taxes that need to be paid.
- Do I have to pay tax in both the US and my home country? Yes. As well as filing a US tax return, you will have to pay tax on your taxable income. However, any tax paid in the US will help offset the amount of tax you need to pay in your home country. For Australian investors, a Tax Treaty exists between the US and Australia so this process is a lot more streamlined.
- Can I claim a my trip to the US as a tax deduction? Yes, as long as your trip is directly related to maintaining your US property. Any activities outside of this task can not be claimed on your tax return.
- What is Title insurance? Title insurance means that the Title Company handling the sale has examined and searched the title to the property and has deemed it clear and free from any debts. It is normally a one time payment and is shown on the standard HUD settlement statement.
- Do I have to have a US Bank Account? No but if you can open one then it will definitely help. Your property manager will be able to deposit the rent into this account and you will always be on top of your finances this way. However, there are ways around this depending on how flexible your property manager is. You definitely do NOT need a US bank account to purchase a US property.
- Is it worthwhile investing in a property situated in a mining town? Generally, no. The reason for this is that there is minimum to zero capital gains when you purchase a property in a mining town unless you make the purchase before the mine opens or there are plans to open new mines in the area. The very high rental returns that come with a mining property are great but are once again, short lived. Great care needs to be taken when considering such an investment.
- What are the forex risks when purchasing an international property? The forex risks can be mitigated by using dollar-cost averaging when purchasing a particular currency. It is also important to check the long-term and short-term average exchange rate for a particular currency pair and buying the property when the exchange rate is above this average.
- Is it better to rent or buy a home to live in? This is a complex question with many variables. Once you've done your research it is generally better to rent your home from a purely financial perspective. However, the benefits that come from owning your own home (ability to renovate and make changes, security of knowing you won't be kicked out, etc.) can not be understated. Basically, you need to look at a number of things, such as:
- Median house prices in the area you would like to live
- Median rental costs in the area you would like to live
- Median house prices in the area that you can afford to buy in
- Future plans and desired lifestyle
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Disclaimer: By viewing this website, you acknowledge that it
is for informational purposes only and does not imply any contractual
agreement, promises of returns or legal expertise. All investors should consult
with legal representation and appropriate accountants before making any
investment and should ensure that individual due diligence is done. Any
information provided here is for educational purposes only and should not be taken
as financial advice.
