Foreign Investments in Sarasota
Sarasota as a Safe Harbor Opportunity for Foreign Investments
There is much interest from foreign nationals looking for an investment haven. This is especially true, considering the ease of identifying the available real properties through the Multiple Listing System (MLS), the availability of competitive mortgages and loans, the uniform taxation of foreign nationals versus nationals, the possibility of securing a residency visa when all conditions are met, etc.
The following may be of special interest:
Favorable Exchange Rate
The presently advantageous Euros to Dollars exchange rate as well as the exchange rates from other strong currencies are self-
Easy Financing
The Foreign Financing Program processes loans commensurate to purchase value. All that is needed:
• A Valid Passport
• A Sales Contract
• A Loan Application
• A Valid Appraisal
Residency Permits for Foreign Investors
Long-
More about American Real Estate Practices
American practices differ from other countries' way of handling real estate. But once one gets used to them, one can really appreciate the valuable saving of time and energy. Major aspects includes the Multiple Listings and the role of the Closing Companies.
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The convenience and effectiveness of the Multiple Listing System (MLS) might be unique to America. Instead of limiting exposure to a single real estate agent's or agency's own listings, every duly registered agent has access to the same and most complete information of every listed property in the region and is fully authorized to handle the sale of any of these properties.
That makes it pointless to visit one agency after another as they all have the same MLS information at their finger tips to scan for the objects available on the regional market.
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Contrary to practices in many countries around the world, in which real estate transactions are handled by an “official notary” who ensures that the transfer of properties is legally correct, in the USA, closing of a real estate sale is usually done by a specialized “Closing Company”, and securing a title insurance is the norm. However, both the seller as well as the buyer, upon their own free will, may each secure the services of "their own individual lawyer" to protect their own personal interests. The Golden Rule: When in doubt about legal matters, consult a qualified lawyer.
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Foreign nationals may invest in real estate in the United States, and like American investors, they must comply with the Federal, State and Local Regulations and Laws, including the requirements of the IRS (Internal Revenue Services), i.e. pay taxes.
Now, unless foreigners have a social security number, for ease of administration, foreign nationals investing in real property are required to obtain an Individual Taxpayer's Identification Number (ITIN) from the IRS, and that number must be made available by the foreign sellers at the closings.
As to the taxes, capital gain is treated as ordinary income. And, in order to ensure that taxes are paid, the Foreign Investments in Real Property Tax Act (FIRPTA) requires the broker who handles the sale to withhold 10 percent from the moneys realized on the sale. This withheld amount must then be deposited with the IRS.
As this withheld 10% is in most cases greater than the taxes due, the IRS has also foreseen that when certain conditions are met, the withheld amount may be reduced or eliminated. The procedures may require the support of a tax expert.
Disclaimer: While the information is deemed reliable at the time it was written, there is no guaranty. Also, things change and evolve. Therefore, in line with due diligence, the reader is always asked to verify the information prior to making any decision and taking any action.
© 2006, 2010, 2015
John Buecheler
