Purchasing Investment Property in the US ?
Considerations when planning to purchse US property as a foreign national
This program evolved out of a desire to develop a best-in-class model that offers a superior alternative to buying homes on the secondary market. From beginners starting with their first home, to sophisticated, institutional, real estate investors purchasing in bulk, the Build-to-Rent™ platform offers a truly first rate ownership and investment experience. Take a minute and read through why using our Build-to-Rent program is the right investment for you.
Establishment of an LLC
For sound legal and tax reasons Greystone recommends all foreign nationals should consider establishing a US based (Limited Liability Corporation), if they have not done so already. While there are initial costs involved there are many benefits to holding your assets in an LLC.
LLC Formation and Running Costs
Greystone provides all our foreign nationals a suite of services including the initial set up of your LLC with all required legal agreements establishing your US based LLC at a discounted, one time flat rate of $600 plus state filing fees. All LLCs are required to have a registered agent (RA), who collects your correspondence for tax and bookkeeping purposes. An RA fee can vary depending on the amount of work, starting at around $100 per year. However, Greystone takes on the position of the RA free of charge.
Accounting and Tax Benefits of Using an LLC
We work with a panel of leading US accountants that understand how to maximize the tax advantages, write-offs, and deductions that naturally accrue when owning property through an LLC. LLC’s are pass-through corporations that are legal for foreign buyers, meaning all income is passed through the corporation to your personal home country tax returns. LLCs are also designed to maximize the tax deductions and benefits that are accorded to all US nationals, too. All startup and capital costs associated with getting the rental business off the ground, including licenses, permits, registration, legal, associated travel, and agency and other professional fees, including CPA fees, can be expensed.
Same treatment on Short & Long-Term Capital Gains Tax:
Capital Gain Tax (CGT) accruing on assets held one year or less is taxed at the ordinary income rates in effect for that year ranging from 10% – 35%. CGT accruing on assets held longer than a year are generally applied under the long-term CGT rate which depends on what income tax bracket the investor falls under. Zero Percent Rate if total income including capital gains, places investor in the 10% – 15% tax bracket, up to $75,000. 15% Rate if total income (including capital gains) places investor in the 25% tax bracket or higher.
Capital Gains 1031 Exchange Program
Another benefit enjoyed by foreign nationals is the 1031 Exchange Program, which allows deferment of gains accrued upon the sale of real estate by investing the proceeds of disposal into similar properties, within a defined period of time. This does not eliminate the liability but sequesters the liability as long as the new investment is not sold. Once the new investment is disposed of, Capital Gains is due, unless the investor elects to use the 1031 Exchange program for another investment, and so on.
We are committed to ensuring a legacy of integrity and value by building quality homes and communities for customers, enriching our investors through long-term wealth building strategies and sharing success with our employees. Greystone is dedicated to offering our customers superior products and services and to adding value for our investors through out expertise, innovation, foresight, and reliability.