When moving overseas, you may be unsure of whether to sell your existing property in America. This depends a great deal on your individual situation.
- Do you expect to return to America in a year or so?
- Are property values low at the moment, making it a bad time to sell, or vice versa?
- Does your company have a policy where they will buy your house?
- Do you need the money from a house sale to pay for accommodation in your new location?
If it’s more advantageous to keep your property, you can rent it out through a reputable rental property management company – especially if you have friends or relatives in the area who can be entrusted to check on it from time to time.
It is important to remember, however, that rental income is still taxable in the state in which it’s located and it may increase your chance of qualifying all of your income for state taxes as well. It is also important to be aware that your local property tax obligations will remain the same. If you sell the property, even after you’ve moved, the capital gains tax situation remains the same. See the previous sections on Income and State Taxes for more information.
Before you buy a home, or even sign a long-term rental lease, in your new country, it’s advisable to first use temporary accommodation to give yourself time to orient yourself to your new city. In the event you are very familiar with the new city, you may be able to do a reconnaissance trip and secure housing before arriving. You may, however, be surprised by how much you didn’t know when you begin living day-to-day in a foreign land. In reality, the only reliable method in deciding where you want to live long term is by becoming a resident.
If you decide to buy property abroad, remember real estate transactions are probably handled very differently than they are in America. This is where an Expat Info Desk Expat Guide to your new country can be very helpful, as it provides you with a full explanation of local property regulations, the current housing market, how real estate agents work in your new country and how to find one. Each expat relocation guide also gives you detailed analysis of different areas in your new country where you might want to live.
Make sure you have a bank account in place in your new country and also seek the guidance of a good local lawyer. Some foreign property agents light up at the sight of what they think is a rich American – and they will take advantage if you’re not familiar with local house prices and customs. The important thing is to do as much research as possible on issues like property taxes and your home ownership rights if you don’t have permanent residency in your new country.