RISING WOMEN EXPERTS...  

What advice would you give to someone thinking of purchasing property in the U.S.?
    By Kim Turner of Invis

With the Canadian dollar hovering around par and an average drop of 25% in house prices across America, it is not surprising that many Canadians are looking to purchase in the U.S. There are many reasons for investing in the U.S., ranging from investment opportunities, vacation properties, to retirement homes. Making the decision to invest in a foreign country is a decision best made with as much information as you can gather.

The U.S. economy is in the throws of an unprecedented economic crisis. The recent collapse of Lehman Brothers and the takeover of Merrill Lynch by the Bank of America are two examples of once untouchable financial institutions crumbling. The uncertainty in the economy creates many opportunities for the informed and forearmed investor.

Engage a Good Real Estate Lawyer - Buying property in the U.S. today is a bit tricky, with approximately 10% of American homeowners defaulting on their mortgage, many properties are in foreclosure and may have tax and other liens registered against the title.

Be Informed About Property Taxes - Florida, for example, does not have a state income tax. Instead, state revenues are raised through property taxes. The result is a two-tied tax system which sees non-resident homeowners paying taxes as much as 10 times the amount of permanent residents.

Enlist Your Financial Planner, Accountant and Tax Lawyer - While joint ownership is common practice in Canada, it may not be the smart thing to do in the U.S. For U.S. estate tax purposes, jointly owned property is included as part of the estate in the first person’s death and again upon the second person’s death. You may wish to hold title to the property in a limited partnership, or in a Canadian corporation or a Canadian discretionary family trust. Through these options you may be able to avoid U.S. estate tax.

Consult a Mortgage Professional - The majority of Canadians purchasing in the U.S. pay cash for their U.S. investment by accessing the equity in their Canadian real estate. While the Canadian dollar is currently within reach of par or better, it was only 6 years ago when Canadians paid $1.62 for each U.S. dollar. If you finance the purchase with an American mortgage you have to ask yourself how you would handle your mortgage, taxes and condo fees if they were to increase by 40%.

To explore more on purchasing property in the U.S., contact Kim Turner, Accredited Mortgage Professional at 403.560.2247 or visit www.kimturner.ca