Effects Of Us Real Estate Legislation On Foreign Investment
Surprisingly, US Real Estate Legislation is not as troublesome to deal with as it is with other countries
. The US government has not much of a barrier for foreign investors interested in US real estate which makes it safe to assume they are encouraging foreign investment in US real estate.
Playing an important role in US economy is what US real estate investment does and so it is encouraged by the US government. It contributes to the creation of new jobs and more importantly, provides a substantial amount of capital to support a healthy real estate industry in the US. This is the reason US Real Legislation on foreign investment was made to be greatly similar to that of a US citizen.
The US government had to take action due to a certain problem they were experiencing with foreign investors in real estate and this is what had led to the Foreign Investment in Real Property Tax Act or FIRTPA being created. This was drafted and passed in order to ensure tax compliance for a foreigner that was selling property in the US by imposing an income tax on the property sold. To further strengthen the chances of collection, the property buyer is required to withhold 10% from the selling price and directly send this to the IRS or Internal Revenue Service- the government body responsible for handling taxes in the US. Before the existence of this act, many foreigners had gotten away with non-compliance with taxes in the properties they sold in the US.
This FIRTPA is the only most bothersome thing in US Real Estate Legislation that foreign investors have to deal with and keep aware of. If you would like to learn more about this and how to find a way around it, I suggest you read this article.
With the recent economic downturn experienced in the US, it would be greatly unwise for the US government to make changes to US Real Estate Legislation unless these were changes that were to further encourage foreign investment in US real estate. Now, more than ever, is the time they would be needing more cash coming in and the real estate market is definitely one of the best investments they could offer to foreigners.
To invest US real estate right now would be a most wise course of action given the low barrier set by the US Real Estate Legislation and the greatly higher chances of finding properties at bargain prices. The recent economic downturn in the US has led to a number of foreclosures and pre-foreclosure properties which would mean properties being sold at about 30-50% below market their market value. The financial crisis has led to many foreclosures and your purchasing these properties would somewhat lessen the burden of debt for the foreclosed properties' owners and for you, the benefit of a bargain buy.
To invest in the US is ideal, especially if you choose to invest in real estate which is a relatively safe investment when compared to stocks which are quite volatile. Plus, you will find US Real Estate Legislation to be fairly easy to deal with.
by: Martin Sejas
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