Alessandro a…, Home Buyer in Italy, TX

Which are the issues with home ownership by a non-US citizen?

Asked by Alessandro and Lilit, Italy, TX Fri Aug 8, 2008

I know that there are some of implications. How much are the tax of incoming rent? And If a day i want sell the house? I know there are particular rules

Forgive my english, i hope i could explain my worries

Many thanks

Alessandro

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7
Louise Warri…, , Lake Mary, FL
Fri Aug 8, 2008
Hi Alessandro -- I wanted to send you a link so that you could read about FIRPTA. This is not a tax that you pay when you sell your property in the US, it is money (10%) that is withheld from a foreign investor when they sell US property to assure that the foreign investor does not have other tax obligations that have not been paid. When the investor shows that there are no other tax monies owing the US government, then the 10% withholding is returned to you. Here's a link for more info: http://www.irs.gov/businesses/small/international/article/0,…

Sorry, I'm not sure if you will be taxed on the rental earnings differently than a US citizen. We are taxed on that amount as 1099 income. You could probably look that up on this website as well. My best advice would be to talk with an accountant.

Best of luck and Happy House Hunting. We're happy to have you come to Florida!

Louise Warring
Coldwell Banker Residential Real Estate
1 vote
Scott Godzyk, Agent, Manchester, NH
Fri Aug 8, 2008
The major tax burden is when you sell, the closing company will be required to hold back a portion of your proceeds. As far as rent collected , none of that is held from you, you collect it and use it to pay the mortgage, expenses etc as any landlord would. Your tax would show up when you filed a tax return. Ask a cpa for exact tax rates or check http://www.irs.gov
Web Reference:  http://www.ScottSellsNH.com
1 vote
Jacqueline F…, , Kissimmee, FL
Sun Aug 10, 2008
Hello Alessandro,

When you find your vacation/investment home, your management company will help you apply for the needed documents to rent out your home to vacationers and pay the taxes on rental income.
They will send or your accountant the needed documents to file your taxes at the end of the year.

You will need to send for an ITIN number. All your tax information will be connected to this number.
It is like a social security number for Americans.

Most investors in the Disney area hold on to thier investment home for 3-5 years and then sell.
At closing the title company will hold back 10% of the selling price to send to the IRS. When you file your taxes for that year you will get some of the money back.
You will not have to pay taxes on the sale if you can buy another home around the same selling price and close within 30 days. (1031 exchange)

This is just a brief overview of the process. I would sugesst you speak with a tax accountant
If you have any questions, please feel free to contact me.

Jacqueline Fortier
Cinderella Realty, Inc.
001-863-450-6449
0 votes
Jim Soda, Agent, Lakewood Ranch, FL
Sat Aug 9, 2008
We recommend any questions referencing Immigration and Foreign Buyers and Sellers, to discuss matters with an Immigration Attorney and Accountant.

Immigration: Donna Scarlatelli, Sarasota 941-917-0066 Email- donna@greencards4u.com

Immigration, Tax and Accounting. We use Renae Glendinning 941-953-7446 Email- rglendinning@kbgrp.com

Ciao
Jim Soda, Realtor - Prudential Palms Realty
941-809-7759
jim@jimsoda.com
Sarasota - Lakewood Ranch
Web Reference:  http://www.jimsoda.com
0 votes
Condo Metrop…, Agent, Orlando, FL
Fri Aug 8, 2008
Foreign nationals investing in the US may be asked to provide an Individual Taxpayer Identification Number (ITIN). This number is required when an individual who is not eligible to obtain a Social Security Number (SSN) opens an account with a US financial institution, sells a US real property interest (the seller needs an identification number so the purchaser can withhold and remit the required US withholding tax and file the applicable forms with the IRS), or is subject to reporting and withholding on investments in US partnerships and rental properties.

An ITIN may be obtained from the Internal Revenue Service (IRS). The IRS will issue an ITIN to an individual who has US federal tax reporting or filing requirements but does not qualify for an SSN. Generally only US citizens, green card holders, and certain visa holders are eligible to obtain an SSN.

If you send me your email address, I'll forward full details to you: Marcus@CondoMetropolis.com
0 votes
Broker Dave, Agent, Orlando, FL
Fri Aug 8, 2008
Alessandro,

An International Tax (I/T) Attorney is the best place to start as you stated that you are the point of others, your team could help with the fees of which will not be a great number for all.

Most International buyers get off the plane stop by the sales office and 'BAM' they own a Holiday Home, then they find out the future problems, remember the sales offices are in it for the sale of the home. A Realtor is about the sale and the relationship created between you and themselves for future business, we want to direct you to the right sources so you will recommend us to any future buyers you may know.

International Buyers tend to be in Holiday Homes for long term investment (and the ability to use at will for themselves), due to prices now your long term investment should trend up, the FIRPTA law comes into play when you sell the home.

Again see this link http://www.irs.gov/businesses/small/international/article/0,… or best to talk to an I/T Attorney.

As for the rental profit you will need to address this again set this up with an I/T Attorney.

Why do I point you to an I/T Attorney? He will listen to you and give options, and when you explain you are a possible group he might have give you more options.

I have an insight into Holiday Homes as three of our family members worked for the premier builder of these homes in the Orlando area.

Broker Dave
Orlando Florida
Web Reference:  http://two4oneoforlando.com
0 votes
L, , Naples, FL
Fri Aug 8, 2008
I cannot stress highly enough to have your agent introduce you to an International Tax Attorney. There are so many different ways to set up your purchase especially if you are married and if something were to happen to either one of you. The US tax ramifications are pretty stiff. I hope you also know that 10% of your sales (when you sell here) will be what is called the FIRPTA tax. That is the tax you pay the US government for selling a home in the US. Of course, there are disclosures made at the time of an agreement of contract and the buyers will be aware.

We just had an educational program at the Board of Realtors on this topic because of my helping a French couple purchase a home here in Naples I felt it was information every agent should know. Not every lawyer can do the work as the International attorney can.

You are doing the right thing by asking all these questions in advance. Good for you! One other issue you might want to investigate is the cost of insurance. i don't know how it relates to what you pay in Italy, but it is something you need to know.
0 votes
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