Q. Where is TSG Europe based in the UK or USA?
A. TSG Europe Ltd is based at Overseas House, 66-68 High Road, Bushey Heath, Herts, WD23 1GG, UK.
Q. What are the restrictions on foreigners purchasing property in the USA?
A. There are no restrictions; the USA does not discriminate against any nationality so you can own as much property as you want regardless of nationality. You can purchase property in your own name or through other entities. There are a few options. You can purchase through your personal name or you can establish a new LLC (Limited Liability Corporation – a US business entity). The single biggest benefit in setting up an LLC is asset protection. The USA is quite litigious and court cases are common. Whilst property owners carry insurance, there is always the fear that someone will act against the property, by holding the asset in a company you have an increased level of protection. However we suggest you take your own tax and legal advice before completing on the purchase of any property.
Q. Are you a regulated / affiliated company?
A. TSG Europe Ltd is a member of the Association of International Property Professionals (AIPP). As a consumer you will have complete peace of mind when dealing with an approved AIPP company. All affiliated members must comply with stringent industry rules and abide by the AIPP Code of Conduct
Q. Do I need to visit or can I visit the USA before purchasing a property?
A. No, you don’t need to visit, TSG Europe Ltd acts as a point of contact to give information and provide assistance with the properties. We are a conduit to assist clients with their purchase of USA property through The Solution Group Corp in the USA. TSG Europe Ltd will provide you with all the information needed.
You are more than welcome to visit The Solution Group Corp office in Miami, USA and to inspect the property prior to purchasing. Please bear in mind we can’t guarantee that the property or properties will still be available, as there is a wealth of clients purchasing multiples of property creating their own portfolios. TSG Europe Ltd can assist you with travel arrangements and will introduce you to the relevant representatives of The Solution Group Corp in Florida.
Q.Will I receive a Title Deed on completion of my property?
A. Once you have paid all your payments, your Lawyer / Attorney will register the Title Deed with the USA land registry as the new owner and you should then receive a copy of this deed depending on the arrangements you have made with your Lawyer / Attorneys.
Q. Why are the properties more affordable in the USA compared to Europe?
A. *The USA property market suffered a big down turn due to the Global Financial Crisis caused by overinflated property prices and over financing. However the market is now on the way back to recovery where some European countries are still suffering the USA property prices are down 33% on historic prices and in some areas still down 50% which has paved the way for foreign purchasers to enter the market. * Source: (NAR) & The Solution Group Corp.
Q. Once I have decided to purchase what is the process?
A. Please see our general guidance notes on purchasing property in Florida and this will give you a good indication of the procedures to follow once you have made your decision to move forward.
Q. What are the associated costs to purchasing properties in Florida?
A. In general there is no VAT on property in the USA. The average fees associated with property purchase in Florida are 2-3.5% of the purchase price, which covers legal fees and title deeds together with any financing opening fees. TSG Europe Ltd will introduce you to a USA attorney who will discuss the relevant details with you once you have decided on which or how many properties you are going to purchase.
Q. What are the associated running costs of the property?
A. Real estate taxes are paid annually, due by November of each year. HOAs (condominium association fees) are due monthly. If the property carries insurance, those premiums are paid annually. If the properties are owned by a company (LLC) the company will have to utilize the services of an accountant to prepare the annual tax returns. Please see the property management page.
Q. Are there any Communal Fees to pay?
A. In the USA, communal fees are issued through the Home Owners Association (HOA) these are the costs to maintain the property and surrounding grounds The fees differ from property to property as they are calculated on the size of the property and what facilities there are in the communal area such as gardens and swimming pools. HOA fees are normally associated with Condominiums & Apartments.
Q. How is the deposit paid?
A. The deposit is paid directly to the client’s lawyer’s / solicitor’s trust account or seller’s escrow provider.
Q. Will I need a USA Bank Account?
A. Yes, there are a few options for you. If you would like assistance in opening a USA bank account, TSG Europe Ltd can introduce you to our incorporation partners who can assist you with setting up a business account at Wachovia Bank which can be done remotely.
Q. Can I get finance to fund my property purchase?
A. Mortgages assisted finance is available; 60-70% LTV* is possible depending on your circumstances. The Solution Group Corp can introduce you to a mortgage lender. Banks in the USA won’t finance stage payments (off plan properties). * LTV (loan to value) means how much mortgage you require in relation to how much your property is valued at. It’s a percentage figure that reflects the percentage of your property which will be mortgaged and the balance which is required by you as a deposit, this is your equity in the property. For example, if you require a mortgage of £70,000 on a property that’s valued at £100,000 you have a loan-to-value of 70% – therefore you must have £30,000 as a deposit and this is your equity in the property.
Please see Mortgages
Q. Are the properties furnished or unfurnished?
A. The properties come unfurnished, tenants provide their own furniture.
Q. Are the properties tenanted?
A. Most properties come tenanted for a period of 12 months with the option of signing an extension if they wish to stay longer. Tenants often decide to stay in the property from 2-4 years in the Florida region as property is in such high demand for rental purposes.
All tenants are subject to stringent credit history checks. You will find that the tenant goes a long way to actually funding the purchase of your property and within a 10 year period of constant tenants the cost of your purchase maybe met through capital appreciation and net income. You must be aware that there is no guarantee of constant tenants however.
Q. Can I sell my property at any time or flip for capital gain and what are the costs associated with selling the property?
A. As the legal title holder of the property, you can sell your property whenever it suits you. The costs associated with the sale can vary but on average the Realtor fee is 6% and the legal costs are approximately 1.5% additionally, you will need to take independent advice from your accountant regarding Capital Gains Tax (CGT). If you are considering selling your property in the USA, please contact us as we are able to assist as we do this as part of our TSG Aftercare service.
Q. What about Income Tax? Do I have to pay in the USA & declare in my home country?
A. You will be issued with an Individual Taxpayer Identification Number (ITIN). If rental income is paid into a USA bank account then this should be declared in the USA. Once income is transferred outside the USA then this will be taxed in the country of residence. The USA tax rate varies from 15-35% and is based on the level of NET INCOME from your rented property after all deductions. In most cases, there is limited net income because of Tax Accounting depreciation, additionally travel expenses can be charged to the properties as a deduction. USA Income Tax is paid annually and is due 1st November each year and is paid in arrears, you have until April the following year to pay but should you pay in November you receive a 4% discount. The information in this paragraph should be used as general guidance notes only and you will need to take your own tax advice relating to this issue.
As part of the TSG Europe Ltd aftercare service we can introduce you to a USA Tax Accountant who specialises in Property Investments for foreign nationals.
Q. What is an ITIN?
A. An ITIN is yourIndividual Taxpayer Identification Number which is issued by the IRS (Tax Authority) for resident and non-resident alien individuals who are ineligible to obtain a United States Social Security Number but may be required to file a U.S. tax return. The number is primarily for tax purposes and is not to be used for identification.
Q. How do I obtain an ITIN?
A.If you purchase through a Florida corporation (LLC), you do not need to obtain an ITIN.
However an ITIN is applied for with the IRS, the form you need is W-7 Individual Taxpayer Identification Number.
Q. What about Capital Gains Tax?
A. The rate is 15-20%
Q. What about Inheritance Tax?
A. The rate can be up to 50%, this can be offset if you purchase through a Florida Corporation.
Q. Do I need to make a will?
A. This will depend on your personal circumstances and should be discussed with your Lawyer / Attorney.
Q. Do you provide quarterly statements to the investors outlining the income & expenditure?
A. The Solution Group Corp will provide you with a monthly report.
Please fill the form below in order to download the Monthly Report Example
Q. What about insurance and what are the costs?
A. The Solution Group Corp can assist you in organising insurance for your property if you wish as it has relationships with reputable insurance brokers in the USA and in particular the Florida state. The cost of insurance is dependent on many different factors which your broker will explain to you.
Q. What is a Title Insurance Company and why do I need them?
A. A Title Insurance Company is a specialised firm consisting of Lawyers and Attorneys who will act on your behalf as an Escrow Agent and Closing Agent to receive the deposit and further payments. They also provide homebuyers and lenders with vital protection against losses from certain title issues including forgery, fraud, and mortgage liens, to protect your asset and have an indemnity contract that will reimburse you for loss in the event someone issues a claim against your property that is covered by the policy.
The Title Insurance Company will also be present at completion with your Attorney to ensure the title deed is transferred appropriately. It is also common for the Title Insurance Company to provide a Lawyers / Attorneys service.
Q. When do I receive my first rental payment?
A. Your first rental payment receipt will be paid to you at the start of the following month after completion of purchase. Rental payments are directly transferred monthly to your USA bank account.
Q. What if I want my rental income transferred back to my country of residence?
A. TSG Europe works with several foreign exchange partners and we can introduce you to one of our partners.
Q. Will the exchange rate affect my purchase and income?
A. Yes, you should think about the exchange rate when you send your payments for the purchase of your property. Generally the higher the £ is valued against the USD, the cheaper it becomes to purchase your USA property.