What is HOA?
When investigating US real estate, you will often come across HOA costs. This stands for Home Owners Association. The closest equivalent in Australia would be strata costs when buying an apartment. The difference is that in the US HOA fees can apply to any kind of dwelling, not just apartments. For example, many gated community properties, which are stand alone dwellings must pay HOA fees, which are normally calculated per month. These fees can be quite hefty so make sure, as part of your due diligence you enquire what the HOA fees are, whether they are in arrears, are they due to increase, and anything else that may cut into your costs. Often a property may appear to be cheap for its location, but the HOA fees are relatively high based on an array of factors.
HOA fees, like strata fees in Australia, should be used for overall management of the building or development.
HOA fees, as with strata fees in Australia, are tax deductible for investment properties.
Do we charge any fees for buying USA property?
Here at US Real Estate, we don’t charge you, the investor any fees for providing listings of USA property. We have formed relationships with experienced agents who earn the usual fees upon the sale of properties. For a DIY arrangement US Real Estate provides access to current listings and the associated agents to take some of the many, many hours out of traipsing the internet. However, if you are looking for a more hands off service, knowing that there are experienced service providers out there finding property that meet your criteria, we can offer access to our affiliates who take the stress out of investing in US property.
At US Real Estate, we are interested in people taking part in the huge opportunities that exist in USA properties right now and providing access to as much credible US real estate investment information, listings and services to enable you to expand your US property portfolio and catch the US real estate upswing.
What is property tax?
This tax varies from state to state in the US. For example, in Califiornia it is approximately 8% based on the land value only, whereas in New Jersey property taxes are around 15%. There are no state taxes in Nevada so you do not pay property taxes in this state.
When investing in USA property, be sure to investigate the property tax for the area you are investing in. This tax must be incorporated into your costs; these taxes are tax deductible for investment properties.
Is there capital gains tax in the US?
The short answer is yes capital gains tax does exist in the US. However there is an exemption for US real estate investors; if you sell your investment property and re-invest in US property of higher value, you defer the recognition of capital gains tax under Internal Revenue Code (IRS) Section 1031. To qualify for Section 1031 of the IRS code, the properties exchanged must be held for productive use in a trade, business or for investment.
This is one area that differs to Australia and is an attractive aspect of investing in US real estate.
