When it comes to Canadians buying property in the US there are various challenges associated with it. The idea of having a property in the US appears to be very appealing but the process involved in doing so is not that simple. Being a Canadian you definitely are unfamiliar with the US property procuring rules and regulations. You definitely need to hire cross border experts in order to understand US policies of property buying. These people have years of experience and knowledge when it comes to acquiring property and they can easily guide you through the process.
Well, when planning to buy a property in the US you need to adhere to certain rules and regulations designed by the county. For example, Canadians should be familiar with the concept of incapacity. If the property is purchased under the name of two people and one of the two people become incapacitated then the property will get frozen immediately. And to unfreeze the property you need to go through rigorous time consuming and expensive procedures. In order to overcome this challenge, it is ideal that you purchase this property in a corporation. This will provide you the necessary protection against all such unlikely circumstances.
US estate tax is another matter of concern for a Canadian. If the Canadian has a hold of US assets amounting to $60,000 or more then he/she has to accept a US estate tax upon his/her death. The complete value of all the US assets is equivalent to 35% U.S. Estate Tax. In order to understand and deal with such kinds of taxes the right way you need to consult a cross border advisor and seek his advice.
Below given are some challenges associated with Canadians buying US property:
- Probate is basically a lawful process designed with the purpose of settling down the property concerns of the deceased. No matter if your estate has already been probated in Canada you need to do it in the US as well pertaining to the US’s rules and regulations.
- Canadians need to have a complete understanding of this US probate process. And a probate can be extremely time consuming and expensive at the same time.
- Being a Canadian you can only develop a profound understanding of this procedure by hiring a cross border advisor. These advisors have absolute knowledge of such policies and know how to deal with them in the most appropriate manner.
- Incapacity is another such matter Canadians need to develop an understanding about. Suppose if you and your wife bought a property in US under your name and one you became incapacitated then the property will immediately get frozen. The same can be the case if a property is purchased under the name of more than two people.
- And if you want to unfreeze your property then you probably have to go through tough procedures which can be both time consuming and expensive.
- Again, in order to understand this concept and its treatment in detail you need a cross border advisor by your side.
A thoughtful solution to overcome all the aforementioned challenges is a cross border trust. This trust basically acts as a common platform between both Canada and US and represents established procedures of both the parties. Considering the situation of your family and the value of your concerned US assets, a cross border trust can even cut down the US estate tax. But it is more than necessary to discuss all the facts with your cross border advisor and ask for his opinion on the matter in order to come up with the best possible structure.