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Thinking of buying a foreclosure property in USA

  • 14-08-2017 8:47pm
    #1
    Benny122
    Registered Users, Registered Users 2 Posts: 133 ✭✭


    Hi there my partner and I are thinking of buying a foreclosure property in USA. Not sure of the area yet we have been looking a few diff places through CIRCA website.

    Some of these properties are selling for $35-50k which is less in euros. Our plan is to do it up and flip it on however we live in Ireland but my partner could get visa and go for 6months to work on it.

    We are really looking for legal advise what charges are there on buying properties in USA taxes etc


Comments

  • #2
    Peregrinus
    Registered Users, Registered Users 2 Posts: 27,258 ✭✭✭✭Peregrinus


    You're probably better off looking for this information on a US-focussed forum. Or, better still, putting these questions to the professionals that you will be engaging in connection with this purchase.

    But, to start you off: The US generally doesn't do stamp duties on property transactions like we do. So, no stamp duty on the purchase.

    What they do do is heavy annual property taxes - much heavier than anything we have.

    Fairly typically, when you buy a house in a foreclosure situation, there will be unpaid arrears of property tax, perhaps going back a few years. As the new owner of the property, you get to pay these off (or else your risk the local authority seizing the property in lieu of unpaid taxes). And they can easily amount to more than the stamp duty you would pay under the Irish system.

    Regardless of the amount of any arrears, as long as you hold the property you're going to have to pay the future property taxes on it. They can be quite steep, and they vary from locality to locality, so look into that for whatever house you put your eye on.

    When you sell the house and (hopefully!) make a gain, that gain is taxable in the US, regardless of whether you are resident there. It's also taxable in Ireland, but whatever US tax you have paid on the gain can be offset against your Irish tax liability. The end result is that you end up paying total tax of whatever amount is imposed by the country with the higher tax on gains of this kind. Note that the rules for calculating taxable gains differ as between the US and Ireland, and your tax liablity to each country must be worked out using that country's rules, so keep an eye on that.


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