The Real Deal Miami

IRS slows down foreign investors’ ability to buy real estate

International purchasers waiting six to 10 weeks for approval

urlThe Internal Revenue Service is taking a more conservative approach to issuing tax identification numbers to foreign real estate investors, a decision that threatens to slow down the growth seen in South Florida’s luxury market.

The IRS is responding to an increase in the number of fraudulent tax returns and identity theft.

“Until recently, if a client wanted to start a company to buy real estate or start a business, we could call the IRS, fill out the form and fax it over,” said Adam Seligman, real estate lawyer and a partner at Ward Damon Posner Pheterson & Bleau in West Palm Beach. Now he added, “clients ready and willing to spend millions of dollars to buy property and hire employees are sitting there just waiting on the IRS.”

But since January, foreign real estate investors must to wait six to 10 weeks for approval, according to the Daily Business Review. And instead of same-day decisions, applicants are being made to submit original documentation or certified copies from issuing agencies, which the IRS then checks for authenticity. [Daily Business Review]Christopher Cameron

  • kingp

    bound to happen, developers deserve it. Maybe it will get them incentive to build on our economic demand not on hype of foreign investors. They borrowed so much money from banks and caused inflating saturated numbers on condo sales, and have the nerve to claim they learned their lesson.

    • Lenny

      KingP….think it through buddy…
      The developers are always going to be fine. Demand is demand. Whether it is from South Florida, Pennsylvania, or Venezuela.
      When the Federal Gov’t purposefully uses policy to impede ALL foreign investors when only a FEW run askew of our laws, it is stupid.
      The unintended consequence may be that 25 construction workers will be laid off next month. The architect, the marketing company, the cleaners, the real estate brokerage firm. etc. etc.
      This law won’t do much to stop nefarious tax offenders, but it will impede investment in America, and it will encourage investors to consider other options. Panamanian real estate sales people are doing cartwheels and laughing at our stupid Internal Revenue “SERVICE”