FAQ

  1. Foreigner can buy a property in the USA? Yes, any foreigner can buy a property in the United States, since that has a passport and valid visa and proof of the existence of the value corresponding to the price of the property like a copy of bank statements or statement of financial applications.The simple fact of having a property in the U.S. does not grant any type of visa or even permanent residence.
  2. What are the differences between the operation of real estate brokerage in Brazil and the USA? In many countries around the world, homebuyers have to go to many different real estate brokers to find a home. Homebuyers go from broker to broker to see what listings each broker has to offer. In the USA, the realtors have access to all the properties available and listed on the marketing, there is a database called MLS (Multiple Listing Service), that is a collection of real estate listings aggregated into one database used by real estate brokers who agree to share their listing agreements with one another to locate homebuyers for property listings more quickly than they could on their own. Is good to remember that In most sales brokered through the MLS, the seller pays the real estate brokerage fee, which means the buyer gets the benefits of agent representation FREE of charge.
  3. Should I work with a broker? Yes, because he has the necessary experience to help you in many ways. A realtor know everything related to the purchase, sale and resale, in addition to representing the buyer of the property and assist you in understanding of the purchasing process and paperwork, giving more tranquility in buying a property in another country and the chance for you to find the right home in the right place is facilitated. It is good to mention that the seller of the property is who pays for the realtors commission, making this a free service to the buyer.
  4. Who pays for the sales commission? The seller of the property, in the case of resale or the construction companies in the case of a new construction.
  5. What are the advantages of buying a property in the plant? As the same in Brazil, the buildings at the plant has prices more attractive, because the buyer is helping to finance the work. Construction companies increase prices during the work, usually once a month or even more, depending on the demand. Another advantage is being able to choose the area you want and what you want add on the house.
  6. Can foreigners finance? Yes. The financing process can be made direct with the construction companies (in the case of new constructions) or with a bank in EUA. The financing for foreigners, at the moment, is available by some financial institutions under the following conditions: Entry between 25% and 70% for 30 years with interest between 3.5 and 6% a year. The aplicante must be approved by the bank and have the credit approved, and the conditions can vary depending on the financial institution and the property. It is good to pointing out that not all the properties qualify for financing
  7. What documents do I need to start the finance process? The borrower will be asked to provide documentation to show sufficient income, bank statements, reference letters from their banking or credit institution, and two forms of identification. The foreign applicant should be aware that it is extremely important for the lending institution to know their borrower. The lender is required to conduct detailed reviews of the borrower’s income and asset documentation. The review is looking for transparency of the borrowers, getting an understanding of where (and) how their income and wealth is generated and how their assets move around. Depending on the buyer’s nationality, a visa will be required, so they will ask for a copy of their passports (and) a B-1 or B-2 (visitor’s) visa. The documents described above may differ from bank (or financial entity) to bank.
  8. What is the maximum that I can finance? Generally, for foreigners, banks finance 70% of the value of the property.It is good to mention that the bank will assess the value of the property in order to release the mortgage. If the value of the transaction is greater than the estimated by the bank, this difference will have to be covered by the buyer, which may or may not give up the purchase.
  9. There is a minimum value to finance? In Orlando, the minimum value for financing tends to be US$ 100,000, wich means that the house has to be the minimum value of $165,000. However there are some banks that finance lower values.
  10. How can I do the transfer of Funds? A bank account shall be opened in the name of the person who will perform the transfer. This person must be approved by the Bank to transfer the funds to your international account. In addition to the commercial banks, we recommend a company, MONEYCORP, who performs this type of transfer with great professionalism and with an exchange rate and competitive, and the is needed only few days for the availability of capital.
  11. How do I open an account in the United States? To open an account here in the United States, it is necessary: copy of passport and a deposit at least U$100.00
  12. What are the types of sales in Orlando? There are 3 types of sale SHORT SALE – is where the homeowner is asking the bank to accept a smaller amount than what they owe on their current mortgage. For all short sale always will have some fees and taxes that the owner did not payed and must be paid by the new buyer. REO – BANK OWNED – the bank has already foreclosed on the property and the (previous) homeowner is no longer in the picture. Banks have become very savvy and in some areas foreclosed property is not being sold at bargain basement prices. Banks employ brokers and appraisers to determine true market value for both short sales and bank-owned property. In general, short sales tend to sell for a little less. They are perceived as less desirable than other property because of the time involved in waiting for approval from the seller’s lender. Its an average of four months to close on a short sale vs. bank-owned property which can take anywhere from two to six weeks.
  13. What are the costs to the Buyer? Typically, home buyers will pay between 2% and 5% of the purchase price of their home in closing costs. Lenders are required by law to give you a good faith estimate (GFE) of what the closing costs on your home will be within three days of when you apply for a loan. But these are just an estimate, and many of the fees listed on the GFE can legally change by up to 10 percent, potentially adding thousands of dollars to your final closing cost bill. Within a day of your closing, the lender should give you a HUD-1 settlement statement, which outlines closing costs.
  14. How much is the Property Tax? The value of the property tax is basically around 1.6 % of the value of the property. These rates are assessed at the local level and can vary by county, and they are based on the value of the property.
  15. Who pays the condominium and property taxes when the property is rented? In the USA the owner pays these fees, and is responsible for the maintenance of the appliances such as refrigerator, stove, microwave, dishwasher, washer and dryer and air conditioning.
  16. If the owner does not live in the country, how can he administrate the property? No matter what will be the purpose of the acquisition (vacation or rental), we have prepared people to manage your property, taking care of the basic and necessary payments such as, homeowners association, condo fees, light, telephone, water, deposit of rent on behalf of the owner,and the administration and management of services such as garden, cleaning, repair, pool, etc. we also can help the tenants of needs that they may have. Therefore, even though you are far away, you can rely on our services, so your property will always be appreciated, and in perfect condition.
  17. Can I buy a property on behalf of two people? Yes, the property can be purchased on behalf of two people. In this case, the deed of the house will be on behalf of two owners.
  18. What is FIRPTA? FIRPTA – Foreign Investment in Real Property Tax Act –Under FIRPTA, when a foreign person sells their U.S. real estate, the closing agent or title company will deduct and withhold 10 percent of the gross sales price from his/her proceeds and send it to the Internal Revenue Service. Congress created FIRPTA as a way to prohibit foreigners from taking profits made from the sale of their U.S. real estate back to their native county without paying U.S. income taxes. The 15% withholding is intended to ensure that the IRS collects the income tax upon disposition of such interests. There is no retention required if the selling price is $300,000 or less and the buyer (including family members) has the intention to use the property for personal purposes such as residence for more than 50% of the time in which the property is in use by the first two periods of 12 months after the transfer. The days when the property is vacant are excluded in the calculation of 50 %.
  19. What is recommended to do, buy the property in the name of person or entity? When buying an investment property, you have the option of purchasing it in your own name or under another entity name, such as a real estate trust or a limited liability company (LLC). The reasons to do the latter mainly revolve around your desire for anonymity or liability protection. Also you may have the benefits and features of deductions and income statements; exemption from retention of 10% of the value (sale) of the property when it is sold; it avoids the tax transfer of heredity, which can reach up to 50 %, according to the value of the property; and, in general, reducing the risk of legal actions and juridical directly to the owner.
  20. Will i pay Income Tax in the USA? Any foreigner with financial transactions, resident or not, must declare Income Tax and pay, if due on income earned in American territory. We recommend that you be assisted by a professional in the area (acounter) which will give you all the assistance.
  21. What happens to my property in case of death? It is extremely important to have a succession planning and exemption from State Tax in the event of the death of the owner, because the State can retain up to 50% of the value of the property and take up to 2 years to release the inventory process if the property is in the name of a person.
  22. Will I have to declare income tax in the USA?Yes, if you are making some income with the property. The owner must declare the tax, because in this case there is capital gains. However, the expenditure as insurance, property taxes, condominium and interest on installment may be deducted in the declaration.
  23. When selling a property, what taxes does a foreigner need to pay? A foreign person needs to pay gains tax and FIRTPA withholding tax. Federal Gains tax is currently 15% – 20% of the net capital gain. Net capital gain is the amount of the gain on the property with the original purchase price, closing costs, and capital improvements (renovations), subtracted out. A foreign seller is also charged a Foreign Investment in Real Property Tax (FIRPTA). The FIRPTA withholding tax is discussed below. So we encourage our customers to seek legal advice-tax before the purchase of the property.
  24. If brazilians buy a property in the USA, are they going to be doubly charged (tax)? Everything will depend on the purpose of the property. When you have a property investment in the USA, and of the property or venture you profit (rent, for example), you have to declare the value of the profit on income tax of 2 countries. The Statement from the USA, you will declare the net value, the income of the property less the expenses incurred to keep it. In Brazil for example, you will have to declare it, but you might be able to deduct the amount of tax that you have paid in the US, or that is, you probably will have to pay tax in 2 countries, but the same will be diluted and only on the net profit.If you keep the property in the United States for housing or only for a holiday, you do not have to pay anything pro tax in the USA. Potentially you only pay tax if you sell the property and has earned with the transaction. As to the tax authorities in Brazil, you only pay tax if you bring the money back pro Brazil, but in this case only if you are bringing the value paid by property plus profits and dividends.If your property in the U.S. is in the name of a company, in the US, of which you are one of the partners or directors and you have earned with the same (in rent or sell later at a profit), you shall declare the property and gains tax American, paying 20% on the net profit of the enterprise.

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