The Anna Maria Island Sun Newspaper


Vol. 16 No. 45 - September 7, 2016

REAL ESTATE

Taxes and international buyers

 

Florida has always attracted a lot of international buyers, and why not? The state has the weather, the beaches and great properties that are frequently bargains to international buyers. Some countries around the world encourage these buyers' others don't and some even punish them financially.

Unfortunately for us, foreign buyers appear to be pulling back from the United States housing market. According to the National Association of Realtors, purchases of U.S. residential real estate by foreigners who aren't residents fell by $10 billion in the year ending March 2016, the lowest level since 2013. The strong U.S. dollar and rising home prices as well as weakening economies in other parts of the world like Europe, South America and China are the probable reasons. In particular, this could impact the Miami luxury market but could also spill over to our coast, where we are already seeing fewer Canadian and United Kingdom buyers.

Although we might like to see more international buyers, the Canadian city of Vancouver is taking steps to keep them out. Starting in August Vancouver is charging an additional 15 percent property transfer tax for foreign buyers. This is on top of the already hefty general transfer tax of 1 percent on the first $200,000 of a home's value and 2 percent on the remaining value up to $2 million Canadian. This is an effort to keep in check the skyrocketing housing market, which has been exploding due to foreign buyers, particularly Chinese buyers. The price for a Vancouver home increased 39 percent in a year.

Just to keep these tax rates in perspective, Florida's real estate transfer tax or as we call it the Documentary Stamp Tax or doc stamp is conservative by comparison and there is no special assessment for foreign buyers. The real property transfer tax is $.70 (70 cents) per $100 of the total cost of the property. Miami-Dade County is an exception where the rate is $.60 (60 cents) per $100, but don't ask me why. For example, on the sale of a $250,000 property, the tax would be $1,750, typically paid by the seller.

In addition, there is also a mortgage doc stamp fee typically paid by the buyer on the amount of their mortgage. This fee is $0.35 (35 cents) per $100 of mortgage and would be $700 on a $200,000 mortgage.

Vancouver British Columbia, Canada, may be discouraging foreign buyers, but there are two other countries I recently read about who want everyone to come. New Zealand, one of the most beautiful places on earth, is welcoming new foreign buyers. New Zealand's relaxed attitude toward foreign buyers, its strong economy and friendly image are major selling points. In addition, the country does not include a stamp duty tax, capital gains tax or visa requirements. This has placed New Zealand in third place after Hong Kong and Sweden in Christie's International Real Estate survey of the top 10 housing price increase between 2012 and 2015. New Zealand had a 36 percent increase, and the Unites States, placing fifth, had a 32 percent increase.

And if you want to go a little more exotic, try another island country, Cyprus. Cyprus is offering an array of government incentives, including tax breaks for homeowners, half price title deeds and the opportunity to obtain a European Union passport. Also Cyprus passed legislation that allowed anybody who spends more than 183 days a year in the country to become a tax resident with additional tax incentives.

International real estate buyers have a variety of places to choose from with even more of a variety of tax structures. Florida, of course, wants more buyers and hopes that losing them is the bad news to our home values improving good news. Aren't you glad you're already here?

Real Estate Transactions
Real estate transfers of June 2016

Sponsored by Alan Galletto Island Real Estate

Sold Date | List Price | Sold Price | Address | Provision | Property Style

Anna Maria

16-07-11 625,000 525,000 122 Oak Ave 1176 3 Br/2 Ba SFR
16-07-08 745,000 689,000 405 Spring Ave 1696 4 Br/3 Ba SFR
16-07-01 899,000 850,000 302 Tarpon St 1878 3 Br/2 Ba SFR
16-07-05 1,099,000 919,000 525 Kumquat Dr 2288 3 Br/2 Ba SFR
16-07-22 1,200,000 1,100,000 116 Peppertree Ln 1996 3 Br/2.5 Ba SFR
16-07-14 1,250,000 1,153,500 229 Chilson Ave 1597 3 Br/3 Ba SFR
16-07-21 1,250,000 1,170,000 238 Lakeview Dr 2281 3 Br/2 Ba SFR
16-07-25 1,745,000 1,600,000 909 N Shore Dr 1868 3 Br/3 Ba SFR
16-07-25 3,500,000 3,300,000 825 N Shore Dr 3486 3 Br/4.5 Ba SFR
16-07-21 620,000 580,000 218 Palmetto Ave 1648 52x100 Duplex
16-07-15 399,000 350,000 710 N Shore Dr 60x85 Vac.
16-07-07 495,000 470,000 401 S Bay Blvd 76x105 Vac

Bradenton Beach

16-07-01 1,495,000 1,495,000 106 4th St S 3000 6 Br/5 Ba SFR
16-07-01 379,900 349,000 1301 Bay Dr N #5a 1079 2 Br/2 Ba Condo
16-07-28 610,000 585,000 1417 Gulf Dr N #1417 1524 3 Br/2.5 Ba Condo

Cortez

16-07-26 1,800,000 1,720,000 12614 Baypointe Ter 4677 3 Br/3.5 Ba SFR
16-07-12 123,500 107,500 12334 Baypointe Ter 110 x 151 Apx Vac.

Holmes Beach

16-07-11 489,000 475,000 406 Bay Palms Dr 1332 2 Br/2 Ba SFR
16-07-06 549,000 490,000 308 56th St 1080 2 Br/1 Ba SFR
16-07-12 579,000 575,000 208 Haverkos Ct 2181 65x98 3 Br/2.5 Ba SFR
16-07-18 619,000 620,000 5802 Imperiore Ave 1020 2 Br/2 Ba SFR
16-07-20 650,000 650,000 304 60th St #B 1150 3 Br/2 Ba SFR
16-07-15 849,000 790,000 206 67th St 2139 4 Br/3 Ba SFR
16-07-27 999,000 975,000 307 74th St 1676 3 Br/3.5 Ba SFR
16-07-11 1,299,000 1,185,000 671 Key Royale Dr 2885 221x78 3 Br/2.5 Ba SFR
16-07-19 2,190000 1,800,000 512 59th St 4544 6 Br/4.5 Ba SFR
16-07-11 2,399000 2,100,000 625 Key Royale Dr 3118 4 Br/3.5 Ba SFR
16-07-05 375,000 350,000 3215 Gulf Dr #3215 672 1 Br/1.5 Ba Condo
16-07-01 360,000 360,000 600 Manatee Ave #205 1187 2 Br/2 Ba Condo
16-07-01 389,000 375,000 3402 Gulf Dr #3 359 2 Br/2 Ba Condo
16-07-18 415,000 392,000 5806 Gulf Dr #204 1078 2 Br/2 Ba Condo
16-07-15 499,900 485,000 6006 Gulf Dr #111 1154 2 Br/2 Ba Condo
16-07-11 395,000 367,500 3009 Avenue E 751 2 Br/1 Ba Villa
16-07-26 469,000 425,000 5613 Guava St #A&B 1580 57x105 Duplex

Source: Mid Florida Multiple Listing Service


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