Canadian buying Real Estate in US

5 Replies

Hi BP,

I was wondering if anyone can help me with legal and tax setup, basically what I need to setup before buying Real Estate in us (being a Canadian), I haven't find exactly what I need to do on BP or online. So far what I've learned, it doesn't make sense for me to setup an LLC in US (I will get double taxed, Canada & US)

Any information would be greatly appreciated.

Thank you in advance, 

@Saeid Safarmehdi

If you search the forums, this has been discussed frequently.

There is no one-size solution, what will work best for you will depend on a variety of factors:

  • Your short, mid and longer term real estate objectives in the U.S.A. (how many properties, whether you need to repatriate earnings, etc);
  • How you own properties and other assets here in Canada;
  • Your income and marginal tax bracket; 
  • ....

You should sketch out your business objectives, prepare a summary of your personal assets, debts and income and shell out a few hundred bucks to sit down with an accountant experienced with cross-boarder business and real estate.

@Roy N.

Thank you for the message, this is good for starting my search. Just out of curiosity, are you currently investing in US? and if you are how did you setup your tax and legals in US and Canada.

Thanks again, 

@Saeid Safarmehdi

We've done business in the U.S.A for over a decade and while not actively investing there at the moment still have interests.

Our U.S.A. holdings are in a child subsidiary of our Canadian company ... again, we are organised in a manner which best fit our situation.  What works best for you may be quite different.

Hi, @Saeid Safarmehdi .
Here are my views, as a foreign RE investor as well.
Foreign people in the USA are subjects of an IRS tax withholding when selling, via the buyer of your property.
The buyer, or his/her title agent has the obligation to retain this money, around 15% of the gross sale price, depending on the price, and to report it to the IRS.
You can apply to the IRS, prior to the sale but after signing the contract, for a reimbursement of the withholding amount or part of it in a very short time via a form filled by your CPA and signed by you.
But be aware that, depending on your numbers for the deal, the withholding could be more than your profit.
So plan accordingly and, above all, seek the professional advice of a CPA and a lawyer versed in Real Estate matters.

@Saeid Safarmehdi did you end up buying any property in the US? I am looking to do the same and very interested in how it went for you!

- Tarik

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