Considering purchasing US real estate – what you need to consider.

If you are considering that winter home in Arizona, that condo in Vegas, that mobile trailer in Texas or any other property purchase, the first professional you should speak with is not your lawyer, it’s your accountant. BC lawyers are not licensed to practice in US jurisdictions unless they have obtained credentials in that state. Property laws vary from province to province and state to state, so at the outset you should determine the rules of that state with respect to foreign ownership of property. More importantly though, your purchase of US real estate may have significant side effects for your estate should you pass away. Some US states will make a foreign land owner pay an estate tax on all of that landowner’s assets regardless of where those assets are located. As such, your Arizona house may create a significant tax bill for your estate should you die. There are ways to navigate through this potential mine field, but you will need to involve professional advisors (accountant, lawyer and realtor) in the US jurisdiction, and your accountant and estate planning lawyer in BC. This will clearly add expense to your purchase, which may make that great deal on that Vegas condo not seem so great. We recommend that owners of US real estate have a specific will drafted in that jurisdiction that speaks to that property only. The BC will should exclude that asset so that the estate administration process can likely proceed without additional or double taxation.

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