Scottsdale Real Estate - Phoenix Real Estate
AZ real estate - Canadians investing in AZ Real Estate
Arizona, always one of the United States' strongest appreciating real estate markets, has seen increasing for-sale inventories, sliding housing prices, and special buyer incentives.
As a result, an increasing number of Canadians are choosing Arizona as their destination of choice for investment and recreational properties.
America has suddenly become less expensive for Canadians - the slumping U.S. housing market and a strong Canadian dollar combine to create a historic opportunity for Canadians considering a second home purchase south of the border
What to know before purchasing real estate in the US:
Currently, Canadian citizens may spend up to 182 days in a twelve month period as visitors
A Canadian national can purchase a second (vacation) home or investment property with no intention to live in the USA on a permanent basis. Most loan programs require a copy of your Canadian passport or driver’s license.
If you are not a US citizen, they you may be subject to FRIPTA - the Foreign Investment in Real Property Tax Act of 1980. IRS FRIPTA Page If you are a foreign national purchasing real estate here in the states, when you sell the sale could be subject to 10% withholding. The buyers are responsible for making sure the 10% is withheld, though it is usually handled by the escrow company. FRIPTA's objective is to force no-resident aliens to file U.S. tax returns and pay taxes on profits generated in the U.S. One of the most common exceptions to FIRPTA withholding is that the transferee (purchaser/buyer) is not required to withhold tax in a situation in which the purchaser/buyer purchases real estate for use as his home and the purchase price is not more than $300,000.
FRIPTA requires that 10% of the total amount realized (generally the sales price) be withheld and forwarded to the IRS whenever the Seller is a "Foreign Person". It also applies to foreign corporations, trusts, etc.
FRIPTA imposes the obligation to withhold upon the Buyer
The IRS keeps the held funds until a determination is made regarding taxes owed by the Seller. Upon deduction of applicable taxes, the remaining held funds are returned to the Seller by the IRS.
Sellers must have a US Tax ID number in order to withhold. The seller should make application for the TIN as soon as possible. The required deposits may be applied to any tax liability owed by the Seller...not just capital gains taxes, such as payroll tax, income tax etc. For answers to Questions about the US Tax ID - What it a ITIN? What documents are acceptable as proof of identity and foreign status? How do I apply for a ITIN? W-7 Form - How about obtaining home financing ? For Canadians, the loan process is very similar to that for Americans. First of all the borrower will need to complete a mortgage application. The borrower will be required to furnish a letter of employment, relevant bank statements and a copy of a valid Canadian passport with an acceptable entry visa stamp. Once all the information has been verified the lender can then determine the most suitable program.
Can I lease my property? Yes, but Canadians who earn U.S. rental income must report such income in both countries. If you they U. S. income tax, however, they can claim a foreign tax credit on their Canadian return to avoid double taxation.
Consider hidden costs associated with living outside Canada.
- Supplementary health insurance can be expensive
- Canadian Medicare only covers a portion of medical care if you are out of the country.
- tax considerations (see above)
Now that you are ready to consider your purchase the process follows the same timeline as a US buyer. You can find the buyer information on our Buyer Web Page.
For additional information regarding Arizona Real Estate,
Contact us for all yout AZ Real Estate Sales needs:
please send direct e-mail request to GaryandClaudia@cox.net
or call our Toll Free Number
866-464-2140
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