New rules might affect your plans if you are a foreign investor wanting to buy real estate in the U.S.
On November 1, 2024, the U.S. Treasury Department expanded the Committee on Foreign Investment in the United States (CFIUS) oversight of real estate deals. This update increases checks on foreign investments, especially near sensitive U.S. government sites.
Steps to ensure compliance
To help you handle these changes, here are some critical steps to follow:
- Research property locations: Before buying, check if the property is near any newly named sensitive sites. This can save you time and possible legal issues.
- Consult legal professionals: Understanding these rules can be challenging. Talking to a lawyer who knows about U.S. real estate and foreign investments can help you follow federal and New York state laws.
- Understand tax implications: Foreign investors must know about the Foreign Investment in Real Property Tax Act (FIRPTA), which withholds tax on foreign persons’ sales of U.S. real estate. Also, New York imposes transfer taxes and a mansion tax for properties over $1 million.
- Register your business: If you plan to buy real estate through a foreign LLC, ensure it is properly registered. New York requires foreign entities in the state to get a certificate of authority.
- Prepare for more inspections: Deals involving properties near sensitive sites may face extra review. Be ready to provide detailed information about your investment and its impact on national security.
These steps will help you understand the new rules and make smart choices about your real estate investments.
Benefits of professional help
Hiring a legal professional can help you navigate these new rules smoothly. They can help with due diligence, ensure you follow all relevant laws and help you understand the tax implications of your investment.
By staying informed and seeking professional guidance, you can invest in U.S. real estate while following the latest rules. If you have questions or need help, contact a lawyer experienced in foreign real estate deals.