David Fite Shares Insights on U.S. Tax Regulations and Impact on Foreign Real Estate Buyers At International Real Estate Symposium January 17, 2018
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David Fite Shares Insights on U.S. Tax Regulations and Impact on Foreign Real Estate Buyers At International Real Estate Symposium London, UK (Jan. 17, 2018) - David Fite, of The Fite Group Luxury Homes, headquartered in Palm Beach, FL, was a featured speaker today at the 12th Annual International Symposium of Who’s Who in Real Estate held in London, United Kingdom.
Speaking on the topic of U.S. Tax Regulations and their influence on real estate transactions, Fite discussed the recent U.S. tax overhaul by the Trump Administration including the curtailing of state income tax breaks and the impact that
change is having on the residential real estate market in the U.S, as well as U.S. tax regulations as they pertain to foreign investors. Fite explained that under the former tax code, U.S. citizens could deduct the amount paid in state and local income taxes, including property taxes, from their federal tax return. However, under the new tax plan, taxpayers may only deduct up to $10,000 in total. Previously, interest on mortgage debt up to $1 million could also be deducted, across multiple properties. But under the new tax plan, interest paid on mortgage debt up to $750,000 can be deducted on a primary residence only. While the actual impact of these tax code changes on real estate has yet to be determined, it is expected that homeowners from states with high income taxes, such as New York, Connecticut, Massachusetts and California, will migrate to states that do not charge state income tax, such as Florida. Fite shared that
this shift is already being felt at The Fite Group Luxury Homes as many prospective buyers began vetting properties in the Palm Beach County market over the recent holidays. The luxury marketing in Palm Beach County includes many second-home buyers and Florida’s lack of state income tax is expected to be even more compelling to potential buyers now that the new deduction limits are in place as of the new year. While these new tax code changes do not directly affect foreign buyers or sellers of U.S. properties, these individuals are subject to the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA). Under this code, foreign investors are subject to income tax withholding on dispositions of interests in U.S. real estate. As a mechanism to ensure the collection of tax from foreign taxpayers, FIRPTA requires the buyers of U.S property priced over $300,000, previously owned by the foreign national, to withhold 15% of the sales price. This 15% withholding is con-
Lucien Douwes of ImmoPartners, Luxembourg Jamie Mi of Kay & Burton Real Estate, Australia and David Fite of The Fite Group Luxury Homes
sidered a deposit that will be applied to the actual tax which is calculated when foreign nationals file a U.S. income tax return. Under certain circumstances foreign sellers can apply to the Internal Revenue Service for a reduction in the amount of withholding from 15% to 10%.
his remarks by recommending buyers consult a U.S. tax accountant prior to purchasing real estate in the U.S. so the most favorable deal structure can be put in place at the onset.
During his presentation to leading real estate professionals from Europe, Asia and South America, Fite explained that there are multiple ways to structure purchases of U.S. real estate by foreign nationals. The use of a foreign corporation, U.S. corporations and/or limited liability corporations can help the foreign national achieve limited legal liability, estate tax and asset protection, lower taxable income on the sale of U.S. real estate and minimal double taxation. Fite closed
For almost a decade, The Fite Group Luxury Homes has represented buyers and sellers of luxury properties throughout the Palm Beaches. With four offices and more than 110 agents, the firm has completed more than $4 billion in sales since its founding by tapping into the team’s exceptional local knowledge and unparalleled committed to providing the highest levels of service. A market leading boutique firm with global capabilities, The Fite Group Luxury Homes is
About the Fite Group:
known for prioritizing relationships over transactions and people over properties. Their strong local brand distinguishes The Fite Group in the markets they serve while a vast global referral and distribution network provides even greater value to their clients. Headquartered on Palm Beach Island, the firm has offices in Delray Beach, Palm Beach Gardens and Wellington. For more information visit www. FiteGroup.com Contact: David Fite / The Fite Group Luxury Homes dfite@fitegroup.com Nadine Fite / The Fite Group Luxury Homes nfite@fitegroup.com
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The Fite Group For almost a decade, The Fite Group Luxury Homes has represented buyers and sellers of luxury properties throughout the Palm Beaches from Palm Beach Island to Wellington and from Jupiter Island to Boca Raton. Headquartered on Palm Beach Island, the firm has offices in Delray Beach, Palm Beach Gardens and Wellington. Having completed over $4 billion in sales, The Fite Group Luxury Homes enjoys a prominent stance in Palm Beach County representing buyers and sellers of a diverse luxury real estate portfolio ranging from ocean to Intracoastal estates to exclusive country club properties to iconic waterfront condos. Strategic alliances with the most successful luxury real estate firms in global gateway cities and membership in ‘Who’s Who in Luxury Real Estate’, the premier global network of the world’s most elite real estate brokerages, give The Fite Group clientele and agent base a unique and influential global network. Today, The Fite Group has four offices and more than 110 agents with exceptional local knowledge dedicated to providing the highest levels of service to their clients in Palm Beach County and beyond. For more information, visit www.FiteGroup.com
The Fite Group Specialists in Palm Beach County Established 2008 Over 110 agents strong
Palm Beach 101 North County Road Palm Beach, FL 33480 561-655-6570
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Wellington 13501 S Shore Blvd Wellington, FL 33414 561-440-4560
Palm Beach Gardens 11300 Mirasol Way Palm Beach Gardens, FL 33418 561-622-7070