United States

United States

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1

Restrictions

Can anyone (including foreigners) own and occupy real estate in your jurisdiction (including shares in property owning companies)? Are there any restrictions?

Yes. Foreigners can own and occupy real estate in the United States and can hold shares in property owning companies. Subject to certain foreign ownership reporting requirements to the U.S. Treasury (Internal Revenue Service) for income received on properties, there are no restrictions barring foreigners from owning and occupying real estate in the United States. State Restrictions & Reporting Requirements

Are there restrictions on lending for the purchase of real estate by foreign companies? If so briefly give an outline?

No. However, U.S. Federal restrictions on certain money transfers and the classification of certain persons and entities as a "Blocked Person" can bar such persons or entities from receiving financing from a bank or other U.S. based lending source.

2

Taxes

Buying

Please provide a short summary of the fees and costs (including tax) relating to buying real estate in your jurisdiction.

Across the 50 States of the U.S., the fees and costs of buying real estate can vary somewhat (though not greatly) and are typically comprised of Title Search Fees, State and Local Transfer Taxes, Closing Escrow Fees, Attorney Fees, Property Due Diligence costs (for any engineering, environmental or other specialized due diligence needed based on the nature and location of the subject property). The amount of fees and costs will largely depend on the current use and intended use of the property, its location, and the value of the transaction. Some of these charges can be negotiated between Buyer and Seller as to which party pays which costs.

Owning

Are there taxes applicable to owning real estate and can the burden of the taxes be passed to someone else (e.g. a tenant or an occupier - not being the owner)?

In the U.S., owners of real property will have annual imposition of real estate taxes, which vary greatly by State and Local jurisdictions. The then current amount of taxes can be investigated ahead of any purchase, though they can change periodically thereafter based on "assessed value" of the subject property. For commercial properties occupied by a Tenant, it is customary throughout the U.S. that real estate taxes attributable to the term of the lease (or rent taxes, sometimes imposed on Landlord in lieu of real estate taxes) can be passed on as a cost to be paid by the Tenant during the term of the lease.

Tax Breaks

Are there tax breaks or other incentives for foreigners to buy real estate in your jurisdiction? If so what are they?

There can be, however, any available tax breaks or incentives that may be provided to foreign buyers are largely dependent upon the State and Local/City jurisdiction of the subject property.

3

Title of Real Estate

How is the ownership of Real Estate evidenced in your jurisdiction?

Ownership of real estate throughout the U.S. is evidenced by a conveyance Deed which is then recorded in the local County Recorder of Deed's Office as a "public record." Certain jurisdictions maintain a quasi-judicial record of ownership evidenced by a Certificate of Title that can be relied upon as proof of ownership and current encumbrances. Ownership of real estate is often "insured" by a Title Company issuing an owner's policy of title insurance to the Buyer at the time of purchase and closing. Whether the Purchaser or the Seller bears the cost of the premium for an owner's policy of title insurance varies by local custom, however, it can be a matter of negotiation in any Purchase and Sale Agreement.

Is it possible to keep the identity of owners of real estate confidential in your jurisdiction?

In six (6) states within the U.S. (Illinois, Florida, Indiana, Virginia, North Dakota, and Hawaii), the use of "Land Trusts" to hold title can effectively maintain confidentiality of ownership. A land trust company is a State licensed operation in the States that permit such form of ownership. Land trust companies are often a subsidiary or division of large banks and are reliable holders of title for the benefit of the "beneficial owner" of the land trust. In all other states, it is possible to hold title to property in entities formed for such a purpose, such as a limited liability company or a limited liability partnership, the underlying ownership of which in many cases need not be disclosed as part of property purchase and sale transaction.

Need more information?

Contact a member firm:

Gerald Sumida
Carlsmith Ball

Charles Jordan
Carrington Coleman Sloman & Blumenthal

Hope Krebs
Duane Morris

Kai Bitter
Frost Brown Todd

Wade Anderson
Gray Plant Mooty

Jorge Hernandez-Torano
Holland & Knight

Paul Havel
Miller Nash Graham & Dunn

Anthony “Tony” Nasharr
Polsinelli PC