Mortgages for foreigners in US

I'm a canuck. Recently went through this, but you don't need a special company. But you do have to create alternative credit through rentals, phone bills, whatever. But any mortgage broker or bank can do it. Chase did it for us. Takes forever and is a stupid pain. Very frustrating that the fact you have no debt is such a barrier. Then you get a credit rating which is crap because you don't have four credit products. But once you have a score you can then just negotiate, as they basiclaly need to get you accepted on their little computer formula, but I was able to get down to 3.15, with no real credit history or crappy (how crappy, I got rejected for a $2000 cc the other day, as I don't have enough credit products).

they need to change their name. dingow can be mistaken for dingo, a savage wild dog, or ding now.

Strange happenings , as many Co-Op boards frown upon foreigners unless there's a large down-payment

Ottawanyc
about 4 hours ago
Posts: 249
Member since: Aug 2011
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>I'm a canuck.

Really, what gave it away?

Thx Ottawanyc - it's funny how it can be so difficult for the banks to get credit history from Canada!

Crescent - it took me a while but I finally get it. Dingo = wild dog! Or it could be www.DingoW.com a wild dog with W as middle initials. Dingo Dubyah!

I'm so glad someone started this post. I'm Canadian as well and I've lived in NY (Brooklyn) for 8 years now. I am married with a green card. Does anyone know the taxes for Canadian buyers when they buy and when they sell? (The apt will by in my parents name). I read something like 30% tax when you sell so it's better to create an LLC as a foreign buyer. Any info is appreciated.

Hi Pro - I'm assuming you mean capital gain tax if you sell the place for more than purchase. From what I gather, there is no difference from that standpoint since the tax rate would be the same.

Just curious, why would you buy under your parents' name? Getting financing is difficult as it is, lending to foreigners is extremely difficult.

Yeah no you're thinking about estate taxes, so putting in your parent's name would be dumb. Otherwise is all same, same, unless you sell when not a resident and then there are withholding taxes, but that is just to make sure all your obligations are paid. So really no barrier. Go on canuskcs forum (or some name like that) has loads of stuff about buying. But really nothing to sweat.

http://www.theglobeandmail.com/globe-investor/personal-finance/taxes/buying-us-property-here-are-5-options-for-reducing-taxes/article4587685/

Great article thank you guys. We don't need financing as my parents are buying it for me cash. We are just at the stage of trying to figure out the best way to document everything so we are protected. Do any of you know a good real estate lawyer in Toronto? I think I'll be needing one here also.

Protected from what? Why would you need a RE lawyer in Toronto to buy RE in NY?

Really don't understand why this is a confusing transaction. More importantly, transfer your $ down now as loonie is favourable. Use Norbert's Gambit.

I'll be 100% honest and God forbid if my wife reads this post lol, but my wife is constantly threatening to divorce me~ so if my parents bought this home in my name then half will be hers. The 30% tax I was referring to is the estate tax in the States. I read the way around it is to set up LLC to make the purchase.

Ouch. Try explaining that to her - that might speed the divorce! I think buying a home is considered one of the most stressful things a person (and couple) can do. Maybe best to keep renting!

Otherwise, just a NYC lawyer would be necessary. LLC or maybe you could buy and put it as a tenancy in common?

Any case, good luck on both fronts. Leafs suck.

Pro make sure you get an estate lawyer. I believe if you are not a citizen, all the exemptions for estates do not apply to you. Happened to in law who died and was not. uS citizen. Entire estate was taxed in total. No spousal no nothing.

I know this is a little off topic but how do Canadians feel about "The Heart Taxation act" or do most Candians not know about th 8/115 limit yet?

Its starting to be widely discussed among the Australian community with a lot of people deciding to leave before their 8 year threshold kicks in.

lol @Caonima yeh those pesky foreigners who work for cisco and microsoft and start companies like google.....go to hell......we dont want your taxes and your degrees and your foreigner smarts.

lol.....caonima....you do realise Streeteasy was started by foreigners right...?

Who would make America laugh without Canadians? If caonima is example of intelligence level and wit, you might be in trouble.

What is 8/15 thing? Do they mine your organs?

Deanc: I think that taxing GC holders past the duration of their stay is fair. A GC holder has the right to return and keep their GC, it's not that big a deal to be responsible for filing U.S. taxes. Quid pro quo.

It's not double taxation. For most types of income, international tax treaties mean that a non-resident GC holder is not going to pay more than the higher rate of either country.

Canadians: for a very long time now, Canadians do NOT have to file a tax return or have to pay Canadian income taxes once they've established non-residency in the eyes of the CRA (no min. time requirement, just proof of having broken residential ties). On the other hand, Canadians returning to Canada qualify for provincial health insurance and preferential university/college tuition rates very quickly. Also, Canadians pay no estate taxes or gift taxes. Children born abroad to Canadian-born or naturalized Canadian citizens (this is a new thing to cut off 3rd gen+ kids) have Canadian citizenship at birth. Couple that with the small, insular Canadian job market -> there are many Canadian expats. Non-resident Canadians (aside from the usual military/diplomat exemptions) do not have the right to vote in Canadian elections.

Given all that, I think that it is a mistake for a country like Canada to extend its diplomatic protection and medical/social benefits to its citizens abroad and when they return home when those citizens don't pay taxes.

In the same way, a U.S. GC gives the holder a tremendous benefit. The point that some make is that GC holders will leave before 8 years to avoid having to file U.S. tax returns for a long time afterwards (bear in mind what I said about double taxation). I think when it comes down to whether a GC holder wants to keep their GC, the hassle of filing a tax return every year will pale in comparison. Besides, unless the GC holder moves to a lower-tax jurisdiction such as S'pore or HK or China, there should be no financial hit.

Deanc: I don't have a problem with the so-called exit tax either. As a Canadian citizen, when I gave up residency, I went through a similar exercise. Deemed disposition at market value of all my stocks, bonds, etc. Capital gains. But the deal is, you then acquire a new basis in the U.S.

I'm sure most people want to avoid paying taxes whenever possible, but from a "is this fair" perspective - one has worked to gain this equity in the U.S., isn't it fair that the U.S. should get a chunk of the gains? Otherwise, if I'd acquired huge (hitherto untaxed) gains, then I would immediately move to a low-or-no-cap gain tax place like S'pore/HK/China for a year, and dispose of my stocks there? It really is not too much to expect that the U.S. gets a tax chunk out of the gains that you've made while living here.

deanc, so are you saying all americans are either rednecks or slaves, without foreigners they are nothing? without foreigners americans will starve to die?

Ottawanyc, it's more like 8/29, 2 weeks later than your anticipated 8/15. Per the information you mean below, do you laugh as canadian or american? I don't think those foreign foreigners mine the organs?

http://www.vancouversun.com/news/Canadians+vigilant+three+more+NATO+soldiers+killed+Afghan+troops/7163412/story.html

@NYC10023 its not "just" the money you've made in the USA. Its your entire net worth globally based on valuation the day you exit.

For us this would mean we'd have to sell one of our apartments in Australia just to cover the tax if we left 'after' the 8 years is up.

I have no issue ppaying the tax while i'm here (and you are right more or less it works out to be about the same as what i woud pay living in australia though i have lived in other lower tax locations in my life.

At the moment unless the matter changes we'll be leaving before the end of the 2014 calendar year.

As I said, maybe not as big a deal for Canadians to get taxed on global worth, because already taxed once on way out. And Canadians generally don't get stepped up basis for properties in estate.

'Course you could do what I did, and become a US citizen.

Do these rules apply to non-Canadians e.g. immigrants from India and China?

You mean the "exit" tax (i.e. tax on gain on worldwide holdings)? Yes. And in the case of China/India, you might have a big hit because you don't do a similar exercise when you become non-residents of Canada.

Again, this can be avoided by becoming a citizen (though other issues surface).

One thing that hasn't been discussed is the estate tax that applies when you die in the U.S. and your beneficiary is a non-U.S. citizen.

Last sentence should read non-U.S. citizen SPOUSE.

Thanks for sharing your insights nyc10023! How are you able to know so much? Is there a good site or place to attain more info on this subject?

Much tax strategy depends on your previous (and possibly future) country of residence and countries where you have assets. You need to look at how those countries treat your income, assets and estate. The more you have, the more diverse the locations of your assets -> get thee to an international tax lawyer! Do not rely on sketchy Internet forums. Deloitte has a good global tax group. I spoke to them briefly many years ago, but concluded that our tax situation was very simple.

My (limited) knowledge stems from having gone through the work visa->green card->naturalization process, and acquiring foreign assets while a U.S. resident. I read the IRS regs on what happens when you enter/leave U.S. and when you re-enter Canada (Revenue Canada website). IRS.gov is a good source, as is Deloitte.

When you become a resident (for tax purposes, separate from work/immigration status) of the U.S., your global assets come under the scrutiny of the IRS. If the country where those assets are located (and/or your country of citizenship/legal residence) also choose to tax those assets, then it becomes very complicated, and you have to look at tax treaty treatments. Even if you don't have those assets when you become a U.S. tax resident, what if you get them through inheritance or gift?

Also, as a resident, you are subject to the U.S. estate tax regime, while possibly also being subject to the estate tax regimes of your home country.

Thanks for the tips again!

excellent info