The Upsides Of Overseas Home Purchases

Americans cite a great many reasons for buying a home in another country. They may find their adoptive countries offer lower living and housing costs, the opportunity for delving into new cultures and languages, or the chance to live much of the year in a favored holiday destination they’d otherwise visit only on vacations.

Increasingly, American buyers are acquiring homes in foreign regions or counties such as Scandinavia or Costa Rica because those areas are more likely to make available sustainable and energy-efficient residences. Or the regions may offer more generous rental returns, providing dependable incomes streams for cash flow-minded buyers.

Here’s a look at several countries Americans often look to for overseas purchases, as well as a few of the inducements offered by each country:

Mexico

Substantially lower property taxes, absence of wealth or estate taxes and no worldwide income tax on residents who aren’t Mexican nationals deliver appeal. As well, Mexico offers temporary and permanent visas, allowing extended stays or permanent moves.

A dual lifestyle option is fully available in Mexico, because owning property there doesn’t require renouncing citizenship in the U.S.

Among favored destinations for American and other international buyers: Mandarin Oriental Residences Kanai, Riviera Maya; and The Residences at The St. Regis Los Cabos in Cabo San Lucas.

Barbados

A double taxation treaty between the U.S. and Barbados helps Americans bypass being taxed twice on the same income. This delivers benefits that include transparency for U.S. buyers. In addition, despite its ability to provide choice amenities, Barbados serves up a more affordable cost of living and cost of services than does the U.S., especially when it comes to luxury offerings. In choosing homes, Americans are selecting a number of communities in the land known as “Little England,” particularly the Pendry Residences Barbados and Emerald Chateau, Barbados.

The Bahamas

No personal income tax. No capital gains tax. No inheritance tax. No wealth tax. The absence of all these taxes enables property owners and retirees to savor large savings in the Bahamas. As well, the tax haven features a thriving and orderly real estate market where property values are comparatively stable and long-term gains can be enjoyed. The relative proximity of the Bahamas to such major U.S. markets as Miami and Atlanta allows Americans to reach their Bahamian vacation homes quickly and easily. Among the properties drawing many Americans is The Residences at Montage Cay.

Costa Rica

Foreigners residing in Costa Rica generally pay taxes solely on the income they earn within Costa Rican borders. Income sourced outside its borders is typically not taxed, although recent tax reforms make some passive foreign income taxable.

Foreigners can easily establish legal residency in the country through Costa Rica’s Pensionado and Rentista residency visa programs. The former visa is offered to those with guaranteed lifetime pensions, the latter provided to those pulling in consistent unearned income from sources outside Costa Rica. What’s more, those fearful of crime have less to worry about, as Costa Rica is known for low crime rates. The Residences at The St. Regis Papagayo Resort is among settings attracting Americans.

The Turks and Caicos

The islands do not levy property, income, capital gains or inheritance taxes, an attractive plus for Americans looking to make the most of financial assets. And being luxury destinations, the islands provide the promise of appealing rental income. Owning property there can streamline the mechanism of obtaining residency for those who wish to move to the islands permanently. Like the Bahamas, the Turks and Caicos are situated a quick hop from Eastern and Southeastern U.S. markets. Top destinations for those moving to the Turks and Caicos include The Point and South Bank.