Realtors who deal with foreign investors often face some unusual challenges – which typically include having to deal with US taxes that relate to their client’s real estate investment.
The US tax rules and issues for foreign investors in US real estate are completely different from those that normally apply to US citizens and residents.
For example, foreign investors generally need to register for tax and obtain US tax numbers. And in addition to filing and paying federal and state taxes, in most cases foreign investors also have to deal with FIRPTA. FIRPTA is generally 10% of the gross selling price of real estate that is sold by foreign investors, irrespective of whether a gain has been made.
Foreign investors require proactive assistance to achieve both income tax efficiency and FIRPTA efficiency, and simply to avoid the steep penalties that can easily arise.
We are well placed to assist foreign investors with their US tax needs. In many cases we work with or through the investors’ US realtor to service foreign investors tax needs efficiently.