Buying real state abroad as a green card holder

[glulgi]

Hi! I entered the US with a Diversity Visa DV2017. I am considering buying a house in my home country as an investment (and for potential future use for my parents or for myself if I were to return there at some point). But I don't know if this is a good idea in thinking about the path to citizenship and for tax reasons. Also, I am uncertain of whether I will stay forever in the US or will return to my home country when my parents age older, so I want to consider the different scenarios. With this context, my questions are:

1) Does buying a house in my home country threaten getting US citizenship? Will I have to justify why I own a house in my home country and not in the US?
2) What are the tax implications of owning real state abroad? I'm not referring to the income gained through renting it out (that will go in my income tax return); I mean tax implications of owning property itself. I believe I will have to declare the FACTA/FBAR for assets over $100-150K, right? A house in my home country would probably exceed that amount. Will I have to pay the US for owning assets over that amount?

I am a bit lost on this topic to be honest, so I really welcome any feedback. If you are aware of good resources to learn about this please let me know! Thank you!!

 

[SusieQQQ]

You can own property anywhere you want. Many green card holders own property elsewhere. And you certainly don’t have to “pay” the US just for owning property elsewhere, what a strange concept, are there countries that make you do that?
You don’t declare it on fbar, that’s for cash and securities (and its $10k not $100k). FBAR declarations are not to punish you for owning assets abroad. They are to guard against potential money laundering as well as a check that you’re declaring what you need to for tax purposes. I’m unaware of where you may have to list real (property) assets held elsewhere.

If you sell it you’ll have to declare for capital gains tax purposes. If you rent it out you have to declare rental income. Any tax implications will depend on any tax paid in the home country and what if any tax treaty there is.

 

[glulgi]

You can own property anywhere you want. Many green card holders own property elsewhere. And you certainly don’t have to “pay” the US just for owning property elsewhere, what a strange concept, are there countries that make you do that?
You don’t declare it on fbar, that’s for cash and securities (and its $10k not $100k). FBAR declarations are not to punish you for owning assets abroad. They are to guard against potential money laundering as well as a check that you’re declaring what you need to for tax purposes. I’m unaware of where you may have to list real (property) assets held elsewhere.

If you sell it you’ll have to declare for capital gains tax purposes. If you rent it out you have to declare rental income. Any tax implications will depend on any tax paid in the home country and what if any tax treaty there is.

Thanks Susie. In addition to FBAR, I was referring to the Statement of Specified Foreign Financial Assets, which I believe one has to submit in addition to FBAR when having assets of over $150K for married filing jointly.

 

[SusieQQQ]

Thanks Susie. In addition to FBAR, I was referring to the Statement of Specified Foreign Financial Assets, which I believe one has to submit in addition to FBAR when having assets of over $150K for married filing jointly.

Maybe I understand differently to you, but as far as I know direct ownership of a property is not a “financial asset”. I’m not a tax expert though and I’m sure your tax consultant will ensure any forms that need to be filled out are done correctly.
In any case, regardless of what you do or don’t need to fill out, the US does not penalize you in pecuniary terms or with regards to naturalization just because you own foreign assets, whether real or financial. It is only income or capital gains earned that raise a tax implication.

 

[SusieQQQ]

In fact

Foreign real estate is not a specified foreign financial asset required to be reported on Form 8938. For example, a personal residence or a rental property does not have to be reported.

If the real estate is held through a foreign entity, such as a corporation, partnership, trust or estate, then the interest in the entity is a specified foreign financial asset that is reported on Form 8938, if the total value of all your specified foreign financial assets is greater than the reporting threshold that applies to you. The value of the real estate held by the entity is taken into account in determining the value of the interest in the entity to be reported on Form 8938, but the real estate itself is not separately reported on Form 8938.

https://www.irs.gov/businesses/corporations/basic-questions-and-answers-on-form-8938#CashQ2

I’m assuming that if you’re putting property into a trust you’re doing it on legal/tax advice anyway and would extend that to any US reporting obligations of same.