#1: A Possible Safe Place to House Their Money
Nearly three-quarters of all EB-5 visa-holders in the U.S. are now Chinese. According to one survey, it is the American legal system that makes real estate investment here so attractive. In the entire world, the U.S. ranks the highest for real estate investors.
How is foreign investment taxed in US real estate?
As of January 1, 2018, non-U.S. corporations are subject to a tax of 21% on U.S. business income and gains (including real property income and gains). The benefits of investment through a foreign corporation or trust also include estate tax protection and anonymity of shareholders.
How do real estate investors avoid taxes?
As long as the new property you buy is of equal or greater value than the one you sell, the program lets you swap them for tax purposes. That means you can defer paying the capital gains tax on the sale of the first property. You can use 1031 exchanges indefinitely.
Can foreigners freely invest in US real estate as long as they comply with the tax laws and pay tax on income they make here from such deals?
Residency Status of the Foreign Investor
If you own real estate or have invested in real estate in the U.S. but you are a non-resident, then the Internal Revenue Service (IRS) likely will only require you to pay taxes (federal taxes, and in some cases state taxes) on any income you earn from real estate within the US.
Is China's housing market so bad people are rushing to the U.S. to buy a home?
China's housing market is so tough that buyers have been heading to the US to purchase a home. Chinese buyers spent $13.6 billion on US residential real estate in the year ending March 2023. A shaky economy and lower confidence in the property sector have weakened the housing market in China.
How is foreign property taxed in the US?
If you sell your foreign home, the tax treatment is similar to selling a home in the U.S. If you lived in and owned the property for at least two of the last five years, it qualifies as your primary residence. You you can exclude up to $250,000 of capital gains (or up to $500,000 for married taxpayers) from the sale.