Tax on Buying Property as Non Immigrant (Howe: sales, loan)

[ahmedbin11]

I am on L1 visa and if I buy property then I need to pay more tax as compared to USA Immigrant (green card holder). I am currently in Texas. Appreciated quick reply.

[widespreadfan]

You will not pay anymore taxes on the property than a US Citizen would pay. The property tax rates have nothing to do with your citizenship or visa status. If someone told you this they are trying to scam you.

[urbancuriosity]

I have never heard of more tax being paid by an immigrant. Everyone (regardless of citizenship) generally must provide proof of identity and likely either a social security number or a tax id number. None of that will influence your taxes.

[ahmedbin11]

thanks all. Appreciated your support.

[Threestep2]

Originally Posted by widespreadfan

You will not pay anymore taxes on the property than a US Citizen would pay. The property tax rates have nothing to do with your citizenship or visa status. If someone told you this they are trying to scam you.

Double check with all tax assessing entities concerning a particular location. Recently a big uproar in the Carolinas as a county did not grant homestead to employer based visa holders.

[widespreadfan]

That does bring up a point about Texas does have something called a homestead exemption which anyone can claim if they live in a home as their primary residence. More than likely at closing the title company will explain this to you.

The only other discounts/exemptions which can apply are an over 65 and a disabled veteran discount. If you are over 65 years old you can have your property taxes essentially "frozen" and if you are a disabled veteran, then you can be exempt from property taxes. Those are the only discounts or exemptions I am aware of at this time.

[supfromthesite]

Originally Posted by widespreadfan

That does bring up a point about Texas does have something called a homestead exemption which anyone can claim if they live in a home as their primary residence. More than likely at closing the title company will explain this to you.

The only other discounts/exemptions which can apply are an over 65 and a disabled veteran discount. If you are over 65 years old you can have your property taxes essentially "frozen" and if you are a disabled veteran, then you can be exempt from property taxes. Those are the only discounts or exemptions I am aware of at this time.

Is your username a reference to WSP?

[TeamLynn]

For the most part immigrants/or even non-immigrants do not pay different taxes than US citizens on the purchase.
You can get taxed differently on investment property vs owner/occupied property. However that is also the same for US citizen....some places like Texas if you live in the property as owner and occupant, you might get a discount on the property taxes.

Probably the biggest issues for non-citizens is what we call FIRTA. You need to be well aware of this as it can cause issues when you sell. If I remember correctly non-citizens have 30% of the sales price withheld and submitted to the IRS for potential taxes...and then you have to file tax return to prove what taxes you owe.

Maybe that is not an issue if you pay cash, but if you get a loan and don't have enough equity, then it can create issues for you. Let's say you put down 20% and hold for a year with no appreciation. When you sell you have 8% closing costs and realtor commissions....so now you have about 12% equity, but have to pay 30% of the sales price to IRS. Then you might have to come up with 18% cash to contribute to the deal to be able to sell it. Potentially you can get all or some of this collection back when you file tax return, but that could take a year or more to get it back. Even if you pay cash initially, you may not get that 30% back for a year or more.

So have a very nice discussion with YOUR CPA about taxes and filing returns and make sure they understand FIRTA backwards and forwards. It may not be something every CPA deals with enough to understand it....especially if they don't have international clients.

[widespreadfan]

Originally Posted by supfromthesite

Is your username a reference to WSP?

If you are talking about the band, Widespread Panic, yes. I have never had anyone ask me that before.

[widespreadfan]

Originally Posted by TeamLynn

For the most part immigrants/or even non-immigrants do not pay different taxes than US citizens on the purchase.
You can get taxed differently on investment property vs owner/occupied property. However that is also the same for US citizen....some places like Texas if you live in the property as owner and occupant, you might get a discount on the property taxes.

Probably the biggest issues for non-citizens is what we call FIRTA. You need to be well aware of this as it can cause issues when you sell. If I remember correctly non-citizens have 30% of the sales price withheld and submitted to the IRS for potential taxes...and then you have to file tax return to prove what taxes you owe.

Maybe that is not an issue if you pay cash, but if you get a loan and don't have enough equity, then it can create issues for you. Let's say you put down 20% and hold for a year with no appreciation. When you sell you have 8% closing costs and realtor commissions....so now you have about 12% equity, but have to pay 30% of the sales price to IRS. Then you might have to come up with 18% cash to contribute to the deal to be able to sell it. Potentially you can get all or some of this collection back when you file tax return, but that could take a year or more to get it back. Even if you pay cash initially, you may not get that 30% back for a year or more.

So have a very nice discussion with YOUR CPA about taxes and filing returns and make sure they understand FIRTA backwards and forwards. It may not be something every CPA deals with enough to understand it....especially if they don't have international clients.

This would have to do when someone is selling a property only. The immigration/citizenship status will have no barring on a purchase.