I had a phone call yesterday from a gentleman living in Geneva, Switzerland. We had a good conversation about what he did and what he wanted to do as far as buying and investing in the US. When he bought his home in Texas, local – and US citizen Real Estate agent – told him he had to comply with a 30% withholding on the sale price of his home. You can’t really blame the agent, he just had no clue about immigration paper works needed.
Here is how it goes. When a foreigner is selling a property in the US, there is a 10% – not 30% – withholding for taxes purposes. It’s 10% of the purchase price. However, it is possible for an individual to avoid that withholding when the purchase price is under $300,000. Home Purchased for $300,000 or Less – No withholding or reporting is required if the property is acquired for the buyer’s use as a home. The buyer must have definite plans to reside at the property for at least 50% of the number of days that the property is used by any person during each of the first two 12-month periods following the date of the transfer. This exemption does not apply if the buyer is other than an individual.
So, no fear for a foreign buyer to have to give up some of the money invested. Of course, any profit should be reported to their country tax filing.
Comments (0) Apr 15 2012