Foreign Property Ownership: A Guide
06 October 2021
Mark Pollock, Director - Tax and Advisory, BDO in Australia |
As global mobility increases it is becoming common for high net wealth families to own homes in a number of countries, as well as investing 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 business’s 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 only to newly built houses to try and drive the construction industry. An emerging trend across a number of jurisdictions is the perception that foreigners are driving up domestic residential house prices resulting in governments restricting domestic banks to loan funds to foreigners to purchase a new house and also the introduction of a ‘vacancy levy’ or ‘empty homes tax’ to 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 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) has greatly increased the level of transparency with families with real estate and bank accounts in many countries throughout the world. The CRS will improve tax transparency from 2017 onwards where financial institutions will release information each year to the tax authority in their country which will be shared with tax authorities in other countries. At this stage over 112 countries have committed to the CRS including most of the ‘tax haven’ countries like BVI, Guernsey, Jersey.
In this publication we detail the legal and tax rules of foreigners buying real estate in the Asia Pacific region as well as popular countries of Canada, USA and UK