A common question among foreigners looking to invest in local Orange County and CA Real Estate: Do I need to be a citizen?
The answer?
No, you won’t need your citizenship or a green card, but you will need an Individual Taxpayer Identification Number (ITIN). That’s a tax-processing number assigned to foreign nationals who are required to have a U.S. taxpayer identification number, but do not have one and are ineligible for Social Security numbers.
An ITIN can be issued by the Internal Revenue Service or by a Certified Professional Accountant approved by the IRS. You will have to fill out a Form W-7 (in English language) or a Form W-7(SP) (in Spanish language) in order to request your ITIN. On the W-7 form you will be required to give a valid reason for your application.
Depending on your nationality, you may also need a valid foreign passport, visa and two or more current photo identifications, such as a driver’s license.
Is there a type of property Foreigners can’t buy?
Foreign buyers are eligible to buy single-family homes, condominiums, duplexes, triplexes, quadraplexes and townhomes.
Housing cooperatives or co-ops often have rules prohibiting foreign ownership. That’s because co-ops generally require that a buyer’s source of income be from the United States and that most of the majority of the buyer’s assets be kept in the U.S. Luckily for the foreigner buyer, there are not that many co-ops in Orange County, CA.
How will a U.S. real estate purchase affect my taxes?
A foreign property owners’ tax liability in his home country will vary depending upon where the purchaser is from and whether that country has a tax treaty with the United States. Consult a tax attorney familiar with your home country’s treaty to get answers to tax-related questions.
The United States government requires that foreign nationals pay U.S. income taxes (state and federal) on any net income (rental revenues less expenses) received from rental property. If tax returns are not filed in a timely fashion, a tax of 30 percent of the gross rental income may be assessed. Even if you’re incurring losses in the early years of your investment and you don’t owe any taxes to the government, you still must file your tax returns in a timely manner or be subject to financial penalty.
For many Americans, purchasing a home can be a daunting and confusing process. For foreigners looking to buy California property, the process can be even more complicated. But with America’s economic opportunities and low interest rates, foreigners are snapping up Orange County real estate. Are you a Foreigner interested in buying property in Orange County, California? Call us now at (949)395-0960!
Jaleesa Peluso is one of only 450 Certified International Property Specialists in the State and she will be able to help you with your purchase and any questions you may have.
About Jaleesa Peluso, Orange County Realtor & Certified International Property Specialist
Jaleesa specializes in South and Coastal Orange County real estate. We serve buyers and sellers in all of ‘South’ Orange County, including: Dana Point, Irvine, Laguna Beach, Laguna Niguel, Newport Beach, Newport Coast, Costa Mesa, Lake Forest, Aliso Viejo and San Clemente. Thinking of making a move in to Orange County? Call us now at (949)395-0960!