A guide to the legal and tax considerations of owning property abroad
23 July 2018
BDO has produced a comprehensive guide for those considering property ownership abroad. In Foreign Property Ownership – A Guide we detail the legal and tax regulations for foreigners investing in property in nine countries within the Asia Pacific region, as well as in the US, Canada and the UK.
As global mobility increases it is becoming common for high net wealth families to own homes in a number of countries, as well as investing in commercial and other real estate outside of their country. Often this can be driven by their children who have chosen to undertake their university studies abroad or alternatively the desire to retire to another country once their business’s have been sold.
As a result of this, Governments around the world are closely examining investment in real estate by foreigners with many countries restricting ownership only to newly built houses to try and drive the construction industry.
An emerging trend across a number of jurisdictions is the perception that foreigners are driving up domestic residential house prices resulting in governments restricting domestic banks to loan funds to foreigners to purchase a new house and also the introduction of a ‘vacancy levy’ or ‘empty homes tax’ to encourage property owners to either live in their property or make it available for rent thus adding to the supply of housing availability and affordability.
What is also apparent is that many countries have been lax in recording of foreign ownership of property with some moving towards a register of beneficial ownership to bring some transparency to the degree of ownership by people living abroad.
This combined with the introduction of the Common Reporting Standard (CRS) has greatly increased the level of transparency with families with real estate and bank accounts in many countries throughout the world. The CRS will improve tax transparency from 2017 onwards where financial institutions will release information each year to the tax authority in their country which will be shared with tax authorities in other countries. At this stage over 100 countries have committed to the CRS including countries like BVI, Guernsey, Jersey.
Look at Foreign Property Ownership – A Guide for more detail.