As global mobility increases, it is becoming common for high net worth families to own homes in a number of countries, and to invest in commercial and other real estate outside of their country. Often this can be driven by their children who have chosen to undertake their university studies abroad, or alternatively, the desire to retire to another country once their businesses have been sold.
As a result of this, governments around the world are closely examining investment in real estate by foreigners, with many countries restricting ownership to new builds in an attempt to drive their country’s construction industry.
An emerging trend across a number of jurisdictions is the perception that foreign owners are driving up domestic residential house prices, resulting in governments restricting domestic banks from loaning funds to foreigners for home purchases. The introduction of ‘vacancy levies’ or ‘empty homes taxes’ encourage property owners to either live in their property or make it available for rent, thus adding to the supply of housing availability and affordability.
What is also apparent is that many countries have been lax in their recording of foreign ownership of property, with some moving towards a register of beneficial ownership to bring some transparency to the degree of ownership by people living abroad.
This, combined with the introduction of the Common Reporting Standard (CRS) and Foreign Account Tax Compliance (FATCA), has greatly increased the level of transparency of families with real estate and bank accounts in many countries worldwide. The CRS will improve tax transparency, with financial institutions releasing information each year to the tax authorities in their country, who then share this information with tax authorities in other countries.
At this stage, over 124 countries have committed to the CRS, including most of the ‘tax haven’ countries like the British Virgin Islands (BVI), Guernsey, and Jersey. Here, we detail the legal and tax rules for foreigners buying real estate in the Asia Pacific region as well as popular countries such as Canada, the USA and the UK.
Wealthy individuals, their families, and their businesses’ financial interests often cross international borders.
BDO’s global private client services team is experienced in working with high net worth and ultrahigh net worth individuals and their families, entrepreneurs, and family offices.
We work with our clients to structure their domestic and international affairs in an efficient and compliant manner. Our goal is to ensure clients’ wealth is structured effectively for long-term preservation and in compliance with the demands of regulators.
BDO’s global private client services team is a global network of private client specialists who have a multijurisdictional understanding of leading issues and a commitment to exceptional client service.
The professionals on our global private client team work together to provide a complete range of tax services to individuals, including:
BDO ensures that clients get the best tax advice no matter where they live or invest.
BDO’s global real estate and construction team is available to collaborate with you, wherever you do business.
Our best-in-class people utilise the resources and global footprint of our cross-border network to give you key audit, tax, and consultative advice, as well as risk management, transaction services, corporate finance, direct taxation, VAT and forensic services.
By staying focussed on your issues and opportunities we can help you navigate the challenges of our dynamic industry efficiently and with confidence. Our experienced local teams will take the time to get to know you and your real estate business.
Whether you are a developer, an investor or a fund manager, we will deliver tailored, commercially focussed and technically proficient solutions to you as a client active in one of the world’s largest and most important industries.