Buying Property in United States
Non-US Citizens can purchase property in the United States and can even apply for a mortgage if required, however, there are far more complex tax considerations for international buyers, which is why it can be crucial to understand and receive the right advice before going ahead with a property. Aside from the legal and tax considerations, the property transaction process typically takes 1-2 months and includes the following steps:
Currency required to purchase: US Dollars (USD)
- Research - Finding a realtor with experience in working with foreign buyers in the USA can be crucial, given the tax and legal considerations for a non-US citizen and an experienced realtor can ensure the process goes smoothly and there are no unforeseen costs.
- Tax - The Tax implications for an international buyer can drastically affect the viability of a purchase, so it is best to seek guidance from a specialist. Generally speaking, UK citizens who intend to use the home as their primary residence are only responsible for the property tax and if the purchase is intended as an investment, the tax will need to be paid on the net income generated by the property and not on any of the value growth. That being said, the tax status changes in different states across the country so specialist advice is recommended.
- Negotiation - Once a property has been identified, an offer can be placed and a realtor will assist with the negotiations to agree on a sale price.
- On completion day, the Public Deed will be signed by both parties in the presence of the appointed Notary, who will oversee that all relevant documents have been completed, fees have been paid and the balance has been settled according to the provisions set out at the promissory stage. The property can then be registered in the new owner´s name and the exchange is concluded.
- Inspection - After a sale price has been agreed upon, it’s crucial for the buyer to carry out a home inspection to ensure the property is physically sound and there are no development restrictions.
- Purchase Agreement & Deposit - After the home inspection, the buyer and seller will enter into a purchase agreement, which will be drawn up by an appointed legal representative. This contract is legally binding and contains the full details of the transactions and once both parties have signed, the buyer will place a deposit which is typically 5-10% of the purchase price, which is transferred to the lawyer.
- Before the completion can take place, a title report will need to be submitted which outlines the previous owners and whether there are any outstanding debts against the property, which is an important step as it safeguards the buyer before they acquire ownership.
- Once the title report has been finalised and the completion date has been reached, the exchange can take place where the deeds of the property can be transferred to the new owner. The associated paperwork will then be certified by a Title Closer and filed with the local government office, and the transaction is complete.