Nonresident International Buyers of Rental Property

By
Real Estate Broker/Owner with Ultimate Florida Real Estate, Inc

Considerations for Nonresident International Buyers of rental property:

1) Will you be paying cash or finance your investment property?

2) If financing, will you use a foreign bank where you already have an account or look for another foreign or local US financial institution?

3) Will your purchase require foreign currency exchange and have you compared the costs of the conversion? Have you considered fluctuations in exchange rate between time of offer and closing and possibly locking the rate?

4) Will you purchase the property as an individual, Limited Liability Corp (LLC), Real Estate Investment Trust (REIT) or other legal ownership structure? Have you compared these and other options financially and in terms of liability?

5) Will you within 45 days have to report the purchase to the Bureau of Economic Analysis? 

6) Will the interest and rent be subject to 30% tax withholding or is there an overriding tax treaty?

7) Will the tax withheld on investment-type income need to be reported and transmitted to the IRS within 10 days?

8) What is the Foreign Investment and Real Property Tax Act (FIRPTA) and how does it apply to buyers/sellers? 

9) Does the buyer have a Social Security number, Employer Identification Number (EIN) or an Individual Taxpayer Identification Number (ITIN)?

10) Where can buyers find information on Tax Treaties by Country? 
  http://www.irs.gov/pub/irs-pdf/p901.pdf

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