Seeling property in UK and invest in USA

[harryvg]

Looking to sell my property in UK and use use that money to purchase property in USA. How can i avoid paying the full tax on bringing those monies into the USA to invest in property?

 

[smparnel]

You must talk to the professional real estate attorney in order to avoid the tax payment while transfering a money to invest in US real estate sector. However, let me tell you one thing that US real estate sector is growing and it is the best time to invest in it.

 

[plova25]

The previous post gave you the first step, speak to a tax expert to see if this can be done from the UK. Here in the US we have what is called a 1031 tax free exchange but it is limited to investments made only in the US. In other words, if you invest in property in the US and sell that property for a profit you can avoid capital gains taxes by investing in another property in a certain amount of time. You generally have 45 days in which to "select" potential properties and then 6 months on which to purchase the property. You must use all of your sales proceeds so this usually means "buying up" to a greater valued property. This can only be done by buying another property in the US. The reason for the 1031 exchange is to promote further investment in the real estate market.

A quick tip if you are looking at investing in the US. It is easy for a foreign citizen to buy property in the US but not so easy to get financing. You will most likely need more money down than a US citizen / resident. When looking at areas to invest in there are a number of variable to consider other than simply price, gross income, location, etc. Taxes and other fees vary from state to state considerably. Some states have a state income tax while others do not. Some states have a sales tax (VAT) while others do not. Property taxes (rates) can vary greatly between state to state as well.

I live in Washington state (Vancouver)where we have a state sales tax of 8.2% but no state income tax. Five miles away is the state of Oregon (Portland) which has no state sales tax but an income tax of 7%-9%. The property taxes are also higher in Oregon than in Washington where I live. At first look you might think that it is better to invest in Washington state but then the net return comes in. In my case rental prices are lower in Vancouver than Portland mainly due to the fact that insurance companies and pension funds have invested heavily in my city for long term returns and like the fact of no state income tax. More supply leads to lower prices although we are in the same metropolitan area.

Just do your research and take into account all variables as everything varies greatly in the US from prices and return to management fees.