With no hidden fees, a stable market, tax benefits, and flexible financing alternatives, many people wonder, “Can Foreigners Buy Land in USA” The answer is ‘YES’. Anyone, regardless of their citizenship status, can buy real estate in the United States.
However, thorough research is needed, as always. Gaining an understanding of all relevant legislation, such as tax policies and mortgage requirements, is extremely important. These may differ from your local country’s rules and as a result, knowing what to expect can help you make a profitable investment.
With its expanding real estate and stock markets, the United States is thriving. It is an ideal place for many to invest with its convenient and welcoming real estate investment policies.
Once you decide to invest in US real estate, the first thing that comes to mind is the procedure you need to follow. As a beginner looking to invest in a foreign land, we’ve prepared this guide with step-by-step instructions.
Step I: Choose Your Preferred Land
With no restrictions on where you can buy land as a non-US citizen, you have complete freedom to choose the property that best suits your needs. Do you intend to use the land for residential purposes? Is this a vacation property or a permanent residence? Do you intend to use it as a commercial space?
These are crucial questions to ask yourself while choosing a location. You must also evaluate various other elements, such as surrounding schools and community type for residential use. The accessibility of commercial transportation and natural resources, as well as the profitability element, are all important things to consider.
Step II: Look for Professionals
A realtor who specializes in international real estate transactions can help you avoid making costly blunders throughout the process. A CIPS (Certified International Property Specialist) designation is earned by an outstanding real estate professional. He or she has received specific training in international transactions and is multilingual, allowing him or her to work efficiently with both US and non-US investors.
Step III: Understand the Tax Policies
As the land of opportunity, the United States government provides numerous tax perks for international investors. Unlike the tax regulations of other nations, you will not be required to pay additional taxes if you plan to purchase the land to use as your primary home. In that instance, the only liability you need to be concerned about is property tax.
As a non-resident investor who is planning to purchase land in the United States for commercial purposes, you will owe taxes on the net revenue that you generate from the property.
The property tax obligation is common to all. If you do not have an SSN (Social Security Number), your real estate agent will most likely assist you in obtaining an ITIN (Individual Taxpayer Identification Number) so that you can purchase your preferred property.
The IRS Publication 515, which details all the rules that non-US citizens must observe, is the first thing you should investigate. To benefit from lower taxes, you also need to understand tax treaties.
Your tax amount will also be determined by the state in which you purchased your home, as some jurisdictions may impose a tax responsibility or withhold taxes.
To make sensible judgments, take the time to study and comprehend these constraints with the help of your real estate agent.
Step IV: Make an Offer
Your real estate agent will assist you in locating the ideal piece of property (if you have not found it by yourself). If you are unable to see the possibilities in person, your agent can show you images, and videos, and can organize virtual tours.
Your realtor will advise you on the appropriate price offers to make based on the sales of other, similar properties in that area.
Negotiating the pricing will fall under the purview of your agent. After you submit an offer, the seller may accept it, reject it, or can provide you with a counteroffer. Once the price has been finalized, you will become the proud new owner of your land.
Step V: Land Inspection
Because there is such a large sum of money at stake, it is common practice to inspect the new property before signing the contract. You can engage professionals to inspect your property for potential flaws or problems. Professionals can guide you through the procedure and their assurance can give you peace of mind about your purchase.
Step VI: The Contract
Signing the contract is the final step in becoming an American real estate property owner. Because this contract of sale will bind you to this transaction, you should carefully read the terms and conditions. You must give an earnest money deposit at the time of contract signing, which can range from 5 to 10% or even more depending on your agreement.
Related: How a Land Contract Works: Expectations vs. Reality
Is the Mortgage a Financing Option?
With or without a credit history in the United States, mortgage financing is feasible. It may be difficult to obtain a US mortgage as a non-resident but searching around for accessible deals and products that can assist you in obtaining a mortgage is the easiest approach. You have options ranging from a local lender to an international or global bank to help you meet the US credit checking requirements.
If you don’t have a US credit history and are looking for a mortgage, don’t worry. There are various US lenders offering mortgages to non-resident buyers or new immigrants at competitive rates. These do not need your US credit history and even provide foreign national mortgages to non-immigrant visa holders.
This option is quite convenient and will prevent you from having to wait several years to establish your US credit history. The US Lender will ask you for any of the following –
- ITIN or SSN
- Proof of Reserves
- A Driver’s license or US Visa or a valid passport
- Credit Score
- Bank Statements
- Tax Return
Related: Importance of Credit Score for Land Purchase
Time Period for Owning Land
If you choose cash as your payment method, you can own your desired land in as little as 30 days. However, because that option is not feasible for everyone and you pick another means of financing or a mortgage as your payment method, your projected time from signing the contract could be 60 days. You might ask your real estate agent to negotiate the terms of your property’s delivery to you sooner or later.
The Bottom Line
For non-resident citizens, investing in US real estate is a fantastic choice of investment. This investment might be made for commercial or residential purposes. You can pay cash or apply for a loan in the United States because of the accommodating real estate policies.
You should conduct a thorough study on real estate properties as well as government aid for overseas tax and lending rules, so you are aware of all the ramifications associated with owning a US property. After that, once you are ready to fulfill all the requirements, you will become the proud owner of your land.