Home Buying in Cambridge>Question Details

Lp, Home Buyer in Cambridge, MA

I'm a foreigner & intend to buy an apartment in Cambridge, MA, USA. Questions: 1. Which bank willing to lend to foreigner?

Asked by Lp, Cambridge, MA Sun Jul 17, 2011

2. Should I used a "trust" to purchase the property to minimise tax expenses if one day we transfer the title to member of family. (any "inheritance" tax issue?)
3. If one day we sell the property and re-invest the proceed to buy another property in the US, what would be the tax rate from the capital gain?
4. If we take out the profit and send it overseas, what is the tax rate? any tax issue ?
Thank u for your advice.

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send me an email and I can refer you to my loan person. I have helped people in your situation before.
0 votes Thank Flag Link Mon Jul 18, 2011
In order to get a loan today, you have to show income in the US, and often the down payment has to be traceable - so even if you put the down payment in a US Bank, if its there only a short time, you will have to show where it came from for most lenders. There are credit unions and portfolio lenders who may lend to you - but the interest rate may be a bit higher than the rates you see advertised. In Cambridge, I can recommend the Cambridge Portuguese Credit Union - you don't have to be portuguese :)

You can put the property in a trust, which is advisable for many reasons besides taxes - I don't believe it has any effect on the tax expenses when you transfer title to an individual.

You can sell and reinvest the property without paying taxes on the gain if do so within 45 days - its called a 1031 exchange, which is the name of the tax code allowing it.

You will have a tax obligation is you sell with a capital gain and don't purchase another property, regardless of where the money goes. But if you hold the property and simply refnance with cash out, or take out a home equity line of credit, you don't hae to pay taxes on the money and you can take it wherever you like.

Please be advised that the questions you are asking are best answered by an attorney who deals with trusts on a regular basis, and an experienced CPA who knows Massachusetts tax code. A realtor can give you some general advice but you really need to consult a lawyer and a tax specialist before you go ahead with purchasing. You should be able to do that without a large expense. Good luck!
0 votes Thank Flag Link Mon Jul 18, 2011
1. BBVA Compass. I have somebody I can refer to you.
2. Yes. Many loans don't allow "assignments" but a property held in a trust fund doesn't change ownership when you add or delete members of the trust fund. I would confirm with a real estate attorney.
3. Tax rates are subject to individual cases. You have 2 years to invest again to avoid the taxes. Better yet, do a 1031 Exchange. You should consult a CPA to confirm.
4. Again, this is a CPA issue.

I hope that helps.

Cathy Bureau
Green Home Realty
0 votes Thank Flag Link Sun Jul 17, 2011
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