The United States may be awash with property bargains, but getting a mortgage to buy a home, or even the visa to go over and hunt for bargains, is less easy than it was a few years back.
'There's no question that the country is in the middle of a lending crisis,' said Luigi Rosabianca, a principal lawyer and founder of leading New York property law firm Rosabianca & Associates. 'Foreign nationals used to be able to obtain up to 90 per cent in financing. Today, they're looking at a 60 per cent threshold, and that's if they're lucky enough to obtain it. Deals that are happening are usually in cash.'
Overseas property owners are liable to numerous taxes. Federal withholding tax on rental income is 30 per cent. Federal Capital Gains Tax on properties owned for more than one year is between 8 and 15 per cent, but there are exemptions. Significantly, a buyer must pay 10 per cent of the purchase price to the US tax authorities which hold it on account for capital gains tax.
Overseas investors are liable to Federal Inheritance Tax - only US$60,000 of the property's value is exempt from this levy for non-US citizens. State inheritance tax may also be payable.
Then there are the state income tax and transfer taxes.
'Income tax is based on the amount of income/climbing scale; New York City and New York state transfer tax on sale is 1.825 per cent,' said Mr Rosabianca. 'State Mansion tax of properties of US$1million-plus is 1 per cent; sellers pay this on sales but purchasers pay if it's new construction.