As Canadians approach retirement age, many of them decide that long vacations are in order, which is a great opportunity to purchase U.S. real estate.
Popular destinations are the warmer climates located all along the U.S. Sunbelt states. The most popular U.S. real estate hot-spot’s are Florida, Texas, Arizona and The city of Las Vegas. These are areas of the U.S. boast a variety of activities for retirees. This is a great way to enjoy life after retirement; however there are many things that you need to consider before purchasing U.S. real estate.
One of the first things to consider before purchasing U.S. real estate is the requirement for traveling back and forth between the two countries. The U.S. has laws which require travelers to submit identification when entering the country. This is known as the Western Hemisphere Travel Initiative and the identification is usually in the form of a passport. These requirements do change occasionally so it is important to check and make sure before making arrangements. If you have any questions you can contact with the Canadian Border Services Agency.
Another thing to consider before purchasing U.S. real estate is that security in the US has tightened over the last decade.
This is due wholly on the terrorist attacks in New York on September 11th. For this reason searches are common and you can expect your belongings to be searched the majority of the time. Be sure to go check a list of items that are not allowed before you travel because they will be confiscated if you have them. This includes anything that can even remotely be considered as a weapon like fingernail files, lengths of cord or lighters.
U.S. Tax laws are an important concern for extended stays, which is also key to think about before purchasing U.S. real estate. Canada allows up to 6 months of time spent out of the country and extensions are occasionally granted. But it is important to be careful to avoid coming under US tax laws. The way the IRS determines if you are subject to these laws is by taking the days visited in the year 1/3 of the days the year before and 1/6 of the days visited the year before that. If the amount of days spent in the country reach 182 or more you could be required to pay US taxes. This Is called the substantial presence test. The document required in this case is called a form 8840. To find out more information on how US taxes may be applied to you, be sure to check out the IRS web site to learn more. In the US, ignorance of the law will not offset your liability.
One of the best ways to learn about extended vacations in the U.S. when purchasing U.S. real estate is to talk to other people who enjoy them.
They can offer insight and advice on various situations that may arise in purchasing property or in time spent abroad.
These are a few of the most important things to consider for Canadians who are looking to take extended US trips after retirement. Once you take the time to educate yourself, you will find that it is not hard to navigate these minor things and be on your way to an enjoyable stay and a delightful purchase of U.S. real estate.