Guide to Legal and Tax Considerations of Owning Property Abroad

August 2018

BDO has produced a comprehensive guide for those considering property ownership abroad.  In Foreign Property Ownership – A Guide we detail the legal and tax regulations for foreigners investing in property in nine countries within the Asia Pacific region, as well as in Canada, the UK and Australia.   
 
As global mobility increases it is becoming common for high net worth families to own homes in several countries, as well as make investments in commercial real estate and other property types outside of their country. Often this can be driven by children who have chosen to undertake their university studies abroad, or the desire to retire to another country once their businesses have been sold.
 
As a result of this, governments around the world are now more closely examining investment in real estate by foreigners, with many countries restricting ownership only to newly built houses in an effort to simulate the construction industry within their countries.
 
There is also an emerging perception that foreigners are driving up domestic residential house prices, and as a result many governments are restricting domestic banks’ ability to loan funds to foreigners to purchase new homes. Several jurisdictions have also introduced a 'vacancy levy' or 'empty homes tax' to encourage property owners to either live in their property or make it available for rent to increase housing availability and affordability.
 
Historically, many countries have been lax in recording foreign ownership of property.  Some countries are now moving towards a register of beneficial ownership to bring some transparency to the degree of ownership by people living abroad.
 
These registers, combined with the introduction of the Common Reporting Standard (CRS), have greatly increased transparency of foreign property ownership. The CRS will improve tax transparency by allowing financial institutions to release annual information to their domestic tax authority, and that information will be shared with tax authorities abroad. At this stage over 100 countries have committed to the CRS including the British Virgin Islands, Guernsey and Jersey.
 
Read Foreign Property Ownership – A Guide for more details on legal and tax rules for buying real estate abroad.
   

With special thanks to Mark Pollock and his team in BDO in Australia, for their leadership on this publication. Look out for more from our program of commentary on The World of Private Clients – from BDO Global Private Client Services.

Disclaimer: Information in the publication is for reference only. Taxpayers should consult with BDO prior to making foreign investments, as several jurisdictions have tax legislation pending.

This post was originally published by BDO Global.