A strong dollar means it’s time to look for deals abroad, but making international real estate plays also comes with “complications.”
The number of U.S. buyers searching for homes abroad has increased 30 percent in the last year or so, according to data from Leading Real Estate Companies of the World, cited by the Wall Street Journal. But experts recommend doing some hefty research before taking the plunge.
Mortgages abroad often require a larger down payment than in the U.S. And fixed-rate mortgages can be hard to come by in many markets.
In the Caribbean, minimum down payments often range from 30 to 40 percent and loans are typically repaid with 15 years, Anita Ashton, managing director at Caribbean Mortgage Services, a mortgage broker based in St. James, Barbados, told the Journal.
Moreover, if you are renting out your home abroad, you need to report the income to the IRS, and the lease could be considered a foreign financial asset, David Lifson, an accountant with Crowe Horwath LLP in New York, told the Journal.
And if the house is held by an entity like an LLC, it must be reported as a foreign financial asset.
The upshot: be sure to grill local real estate experts regarding taxes and other costs. [WSJ] – Christopher Cameron