International real estate offers great amount of privacy and asset protection, where your government can’t seize it. Choose a proper location/jurisdiction and you have a safety net. It might also be your retirement plan, if you want to retire abroad.
If you are American taxpayer, there are some good news. You don’t have to report foreign real estate if it is held in your name. However, if international real estate is held by corporation, LLC or trust, then it must be reported. But if the property is on your name, then you have no tax obligations, unless you rent it out. Be aware that you can take all deductions if you rent it out, as you would with the U.S. real estate and that you can deduct one round way trip per year to check your real estate.
Please note that UK, Canada and France are not good jurisdictions to have an international real estate, because these countries have agreements in place, that allows US government to seize your real estate in this countries. For example, if you owe to the IRS, they can seize your property in UK, Canada or France. It shouldn’t come as a surprise, should other countries join in this agreement in the future.
Be aware of buying property in the European Union, as these countries are most likely to enforce a request from US to seize the property. Chose some exotic destination instead, where it is nearly impossible for your government to seize real estate.
These countries have a legal system that is difficult to navigate, cases take years and years to get resolved and they are reluctant to enforce US judgment in their own country. Pickup countries like Brazil, Thailand or China and see if they will enforce US judgment.
You can also decide where to invest, based on whether you will get second passport through investment. International real estate is becoming increasingly popular investment, as it provides privacy and asset protection, similar to gold investment. Over twice as many US clients are looking to buy property in foreign land. Most popular destinations include Colombia, Costa Rica, Philippines, Mexico, Brazil, Italy, Canada and Thailand.
In terms of buying international real estate in the U.S., Chinese buyers present 45% of all buyers, followed by Canada, India, United Kingdom and Mexico. There are 59% residents and 41% non residents investors, whereas this was split even in last years.