2 August 2021
Why Americans Should Purchase Real Estate Abroad
It is well known that real estate is one of the safest investments. Appreciation and demand work in favor of those who understand the value of the investment. Many Americans, however, do not take advantage of the full scope of real estate investing across the globe. Owning real estate abroad is one of the savviest moves investors can make for many reasons. Imagine yourself in your home away from home, soaking up the sun on a beach in the Caribbean, skiing in the snowy mountains of Andorra, or enjoying the luxury of the UAE. All this while reaping the financial benefits of owning property internationally. Here are just a few reasons why more Americans should buy real estate abroad.
Residency or citizenship perks
Many governments want to attract foreigners to their countries to make real estate purchases. As an incentive, many offer residency or citizenship in exchange. It’s good for that country’s economy, and you get all the perks of second citizenship. With this advantage, you do not have to return to the United States after a certain amount of time as you would without residency privileges. When you invest in real estate internationally, you get more than just a dream home abroad.
The golden rule of investing: diversify! You wouldn’t put all of your money into a single business or property, so why ignore all the diversification benefits of investing in several countries? It also protects your assets from any instability or issues in the US, the lawsuit capital of the world. Purchasing real estate is already one of the safest investments you can make, and doing so abroad means you have your eggs in very different baskets.
Perhaps the biggest reason Americans choose to buy property internationally: higher return on investment. For many developing countries, their emerging markets have grown consistently over the last decade or more and will continue growing into the future. If you are looking to get higher returns on a property faster than you would in an already developed economy like the US, you might consider investing internationally.
When you own a property abroad, you expand your tax strategy options. If you plan to live at the property full time or use it as your vacation home, you are exempt from paying US taxes on the
property. So while your property is appreciating, you are not paying a penny to the IRS. Furthermore, there is no capital gains tax on foreign properties used as primary residence.
Now, if you plan to rent out this property, any income you earn will be subject to taxation. However, you can deduct property taxes, repairs, maintenance, utilities, insurance, management fees, and depreciation.
At Offshore Circle, we are a team of global citizens passionate about helping our clients create opportunities for themselves abroad. As our name suggests, we offer offshore investment services to help you diversify your portfolio, grow your global wealth, and strategize your tax planning. With jurisdictions worldwide in dozens of countries, we’ve established a comprehensive network of international contacts that help us design customized investment plans for our clients. If you are ready for the move abroad, contact us today. We will help you turn your international real estate dreams into reality.