Accountant for Foreign Nationals that Own Real Estate in New York
Owning real estate in another country is rarely a simple proposition – all the more so when that other country is the United States. The many tax burdens imposed by the Internal Revenue Service include a number of things that impact foreign nationals, and navigating this labyrinth of codes, laws, and exceptions can be daunting, even for those who have a passing familiarity with U.S. tax requirements. That’s why, for those cases that exist beyond the bounds of traditional circumstances, an expert touch is needed.
The specialists at U.S. Tax Help have decades of experience in the field of international tax law. This team of certified public accountants has the knowledge and expertise you need to ensure that you are left with the smallest tax obligation possible while still remaining within the bounds of the law. Put the skills of the experts at U.S. Tax Help to work for you today; set up your first consultation by visiting us online or calling (541) 362-9127 today.
Use of Real Estate in New York by Foreign Nationals
Any foreign national can own property in the New York, regardless of citizenship or nationality; that said, there are some considerations that must be taken into account when determining the tax burden of a foreign citizen who owns American real estate. The two primary concerns are the use of the property – whether it serves as a residence or a source of income – and whether the owner of the property qualifies as a U.S. resident under the law; either of these details could have a huge impact on the financial obligations associated with your real estate.
Maintaining a Residence in New York
New York City and the surrounding areas have long been popular destinations for people around the world, so it is only natural that foreign nationals may want to own real estate in the area. If this property merely serves as a vacation spot for you and your family, you can relax; aside from property taxes, you probably have very little tax obligations associated with the property. If you live at the property for a substantial part of the year, however, you may be on the hook for more than you think.
Anyone deemed a United States resident by the IRS is taxed in much the same way as an American citizen: all worldwide income is subject to U.S. income tax, for one thing. This makes the residency thresholds set by the government important financial benchmarks for those who own real estate in New York, or in any other state for that matter. The IRS uses two tests to determine whether a foreign citizen is to be considered a U.S. resident:
- The substantial presence test looks at the number of days you have spent physically present in the United States over the past three years, including the current year. You will likely be considered a U.S. resident if you have been in the country for at least 31 days this year, as well as a total of at least 183 days during this year and the last two years combined; the IRS counts all days present this year, one third of the days present last year, and one sixth of the days present the year before that toward your total.
- The green card test is exactly what it sounds like: a simple measure of whether you have been issued an alien registration card (Form I-551, better known as a “green card”) by the U.S. Citizenship and Immigration Services. If so, you are considered a permanent U.S. resident under the law and will be taxed as such.
If you pass either of these tests, or if you are unsure about your residency status in the eyes of the IRS, consider reaching out to a qualified international tax specialist like those at U.S. Tax Help. With the assistance of a skilled accountant, you can avoid incurring any fines or penalties.
Owning a New York Rental Property as a Foreign National
Rental properties are somewhat simpler than residences, as tax law goes. Because all U.S. income is taxed by the government, regardless of the citizenship of the person earning that money, you can expect to have a certain amount of your rental income deducted from the total that you collect. The standard rate of taxation for rent is 30%, though there are some circumstances where you can elect to be taxed at a graduated rate instead.
Also keep in mind that anyone who owns property in New York will have to pay local property tax rates. These amounts vary depending on the value of your real estate and the county in which it is located; the average property tax in New York is about 1.6% of the property value, though in New York City the rate is about 0.8%. A knowledgeable accountant can help you determine exactly what you own at both the local and federal levels.
Skilled Accountants Serving Foreign Nationals with Property in New York
Whether you are looking to purchase real estate in New York, have owned property for some time, or want to sell your house or apartment, the international tax specialists at U.S. Tax Help can guide you to full compliance with the IRS. Set up your first consultation today and save yourself time and money down the road; visit us online or call (541) 362-9127 right away.