Home buying in the states with non U.S. citizen spouse.

[carl.hops]

I'm back! It's been quite a while since I've browsed this forum, but not much has changed. My wife and I live in China, and we are ready to buy a home in the states. As I don't have a job anymore and no real income to report we plan on borrowing from her parents so we would be paying in cash for our home.

 

My question is this: is it possible to buy the house in both our names? I've read that a foreign home buyer will need a tax identification number and that they can indeed buy property, but it seems that a foreign buyer is subject to high taxes. Have any of you who have a Chinese wife (married in China only) bought a house together in the states? Thanks.

[dnoblett]

Yes, you are still a US Citizen not a foreign buyer, many members on the board have bought homes and had their non resident spouse added to the deed.

 

Yes, probably would need some sort of tax ID number such as ITIN, should already have one if you have been filing Joint IRS tax returns as a married couple.

 

As for tax on buying a home, I have not heard of such a thing, normally the seller may pay a cap gains tax, but the buyer or new owner would have property tax to deal with, however that should be based on home value assessment which is the same no matter if Citizen, Resident, or Non-resident.

 

You should have no issues buying a home and adding your spouse to the deed as a co-owner.

 

Since you say paying cash, then no mortgage will be involved, so non of the usual bank issues would come into play either.

[carl.hops]

Thank you for clarifying that for me :-) I don't think her parents would agree to just give out 100,000 USD willy nilly with out her name on it too. I didn't mean to say that I'm not a citizen anymore, just that if she were to try and buy the house she would be taxed more yearly. I don't plan on ever changing citizenship <insert flying american flag n such>

[Randy W]

You should be clear - are you talking about HER buying the house with money from her parents, or what? Whose name(s) will go on the deed?

 

What are you expecting to be taxed on and why?

 

I doubt there are any issues with her paying cash for her house,letting you live in it, and paying the typical annual property taxes, like Dan says. Any arrangement she has with her parents would not enter the picture, unless her parents were to hold a lien (possible, but I don't think this is part of your picture).

[credzba]

Thank you for clarifying that for me :-) I don't think her parents would agree to just give out 100,000 USD willy nilly with out her name on it too. I didn't mean to say that I'm not a citizen anymore, just that if she were to try and buy the house she would be taxed more yearly. I don't plan on ever changing citizenship <insert flying american flag n such>

 

I think your mixing China and American house buying.

In China, there is an extra percentage foreigners pay when buying a house.

America taxes foreigners and citizens the same (wrt. house purchase).

 

Her parents could buy the house in America in their own names, and let you guys live in it if they wanted.

The US allows foreigners to buy property anytime they want. ( I know that is not the plan, just saying )

 

We bought our house in America in both our names 5 years ago, and we even took out a bank loan.

We had my wifes ITIN number at the time, but no social (she didn't have a visa yet), and neither the bank not the title company were concerned.

(Interesting, the bank was ADAMANT that her name be on the loan... The wanted multiple ways to recoup their money if we couldn't pay)

 

As a side note, have you used www.zillow.com to see what house prices are in the area your planning to live?

Here in Texas, $100,000 wont buy much (in the city), and your probably going to have to get a job/loan to get a house your willing to live in.

 

I'll ask a harder question. I know your in love and marriages never fail.

If her parents are paying 100% of this house, shouldn't it be in her (or their) name only ?

Divorce is one circumstance that would cause you to have to divide property, and while today you say you would of course give all the money back to her parents, when two people seperate, sane thought is not always present.

Second is death. I know Chinese don't like to talk about bad outcomes, but it IS possible you both die. Then who is to make sure her parents get their $100,000 back?

Lastly, I will tell a horror story, a friend (was korean/american) got engaged to be married. The parents sold everything they had, and took out mortgage on their house to give her $50,000 for her marriage. The boy spent all the money, and walked away from the girl.

A less dramatic, but closer to my pocketbook is my own daughter was engaged, we gave her $5,000 to help pay for the wedding. They broke up, cancelled the wedding, but our 5,000 was never returned. Needless to say we are not happy.

 

I would suggest that the finances be legally specified as to who owns what with property, and anything of value.

 

If you need help on this, I'll be happy to provide as much detail as you want/need.

[tsap seui]

Nice to see you post again Carl. Wondered how you were doing in Chiner.

 

As has been said, you won't see any additional tax on a buyer. There will be closing costs which may surprise someone not used to our system when they sit down at the closing table to finalize the deal, but nothing additional will be added on.

 

I married my wife in China and since she came over in Aug 2011 we've bought a private home in October 2011 for us to live in, as well as 3 rental homes bundled together as one commercial purchase in January 2012.

 

My wife had a 10 year green card from the day she came to America on her IR-1 visa. As well she had a SS card when we both both places. Taking out a loan on both properties proved to be a flea bite for us. No one from the banks seemed to be too sure of what to do with a green card for one, and no matter how you try and spin it these gals DO NOT have a credit rating. We got the private home loan and the commercial loan, just had to wait until after closing to get Wenyan's name put on both. Pennsylvania real estate and marriage/divorce law covers the wife without her name being on the home deed, but I wanted Wenyan's name on the deeds. We're gonna pay off the commercial loan in 5 years and at that time take my name OFF of the deed altogether. It's Wenyan's business and has been from day one. I'm a firm believer of a wife having everything possible with their own name on it, their own credit rating, their own relationship with the bankers, etc, etc.

 

Something happens to me, I want to know she can proceed right on with her life, hardly losing stride, and certainly not having a ton of stress about how she is going to make it here in America. Soon, our bankers here will see that I am just the American man driftin' around on his Harley in the background with Wenyan Li as the shinning star and person to deal with.

 

If your wife's parents are going to do a cash deal for you guys, you will have no problems that I can see. A loan could get tricky but it doesn't look like you have to worry about that. Your wife's parents are very nice to do this for you guys, and do it here in America. It sounds like you two will have a great start on your new life in America, even with making payments to the inlaws. I'm really happy for you both.

 

As a side note, in your shoes, I'd go to the inlaws and ask them to put the home, solely, in their daughter's name....but that is jes me. I figger guys like you and I can always take care of ourselves.

 

Good luck and happy trails buddy.

 

tsap seui

[carl.hops]

We would like to buy a home in Portland, Oregon. There are still plenty of condo's, townhouses and detached homes around 150,000. We plan on borrowing 100,000 from her parents, and paying the rest with what we have saved. So we wold be paying all out in cash. I had given up the idea of getting a loan because I'd rather not get stuck in a bad interest rate, I can personally qualify for a VA home loan at an interest rate around 3.3 but I'm unable to now because I haven't worked for over three years and haven't payed taxes for two.

 

I wonder if she would be able to secure a good interest rate...

 

Her parents have no problem lending us the money (they know we plan to take care of them later) but I'd rather get a loan and a more expensive house at around 250,000 if we can land a good deal on a loan from a bank, I'd much rather loan from the bank than her parents just so we can avoid and future problems that might occur. If we do end up lending from her parents, I don't see it being a huge problem as the money we make together now is kept in a bank account under her name (for the majority of funds) that includes our savings, so if a divorce ever did happen I'd most likely be the one with the short end of the stick. She will have her name on the deed which ever route we take.

 

I was just shown Zillow and Redfin yesterday and I've been looking into which counties in Oregon are cheapest property tax wise, thank you guys for your thoughtful replies. I should hang around here more often.Also, it's really good to hear you finally were able to go back to the states WITH your wife tsap!

 

It looks like I'll be giving my bank a call later and asking them what I should do in order to get a loan for my wife, hopefully I can use Navy Federal still.

Edited September 26, 2012 by carl.hops (see edit history)

[knloregon]

Carl ~ ! I'm in Portland Oregon, and have (in the past) renovated several houses, and built the one we are in now. In addition, we are in the final stages of a refinance (one of several) --- so I know just how much the rules have changed since the melt-down. The first question --- if its an all cash sale: ARE the funds in the US today??? If not, how do you plan to transfer them from PRC?? --- last time I checked, the max you could transfer from PRC to the US annually was in the neighborhood of $50,000 And yes, you probably have picked a good location --- even if to market tanks (again) Chinese want to live in Portland, particularly, here on the east side, which helps prop up the market, on the low end ---- the area of your search. An 'all cash' offer speaks volumes to a seller, and your realtor should be able to milk it for all its worth --- having said that, property (at the low end) in Portland is red-hot right now, which may be a sign of recovery, particularly in the ethnic neighborhoods (for Chinese. the cross-hairs are 82nd Ave. North/south, Powell Blvd. East/west.

[carl.hops]

knloregon,

 

All of the funds are in RMB currently, I remember almost six years ago hearing my first Chinese girlfriends boss telling me he could only transfer $50,000 a year, I'm surprised it hasn't changed. I'm guessing it would be more than a hassle to have say, me send 50,000 over, then have her transfer 50,000 over (I'll be getting her, her own account with Navy Federal) and then have say, one of my parents transfer money over? I'm not sure how I'd put all that money together, maybe I could just make three payments? At this point a loan is not out of the question, but it will be a hassle considering I haven't paid taxes in two years going on three.

 

I just spoke to my bank and they said that all I would need is her ITIN like dnoblett stated earlier, but, she would simply be a co-signer considering that she doesn't have a visa and has never visited the states. Still, with her (our) assets I don't think it will be a problem getting the loan. We will need to make a trip to Korea in order to go to the nearest branch however.

 

I'm interested in talking to you some more about the market in Oregon, especially about your experience building your own house.

Edited September 26, 2012 by carl.hops (see edit history)

[knloregon]

Hey Carl, PM me any time, be happy to discuss Portland's housing market !

 

But an: "all cash sale" means exactly that. You have no leverage in the real estate market if you arn't ready to put ---- all the cash on the table.

 

--- The only other form of leverage is credit --- Extremely high credit ratings open doors otherwise closed. but that doesn't seem to be an option for you, since you (apparently) don't have an income stream. I would highly recommend that, if you haven't yet --- get your credit rating from the three major credit agencies --- isn't going to cost that much, (probably under $50.00 combined) -- but if there were ever a practical application to the term: "knowledge is power" this would be it. Your credit rating may very well be better than you think --- but if you go to a lender and lead off with the fact that you haven't filled taxes in three years --- their natural reaction is to give you the worst possible terms on a loan. Once you know your credit --- there are tables on line (suggest BankRate.com) --- you will know where you stand relative to acquiring a home loan. As for a foreign national, without a green card, as a co-owner this turns out to be problematic, at least in our case --- our lender absolutely required proof of permanent resident status. All of this is sliding scale --- you can probably close a loan without that proof, but pay a higher interest rate etc...

[dnoblett]

Very true about transferring money to the USA, the $50,000 limit has more to do with the mac allowed by a Chinese citizen for converting RMB to USD and then sending to the USA than what is allowed by the US government to transfer into the USA. There is no limit on how much can be brought into the USA, it is your money. Any amount above $10K needs to be reported, not for tax reasons.

 

However in many cases if the sum is large, the bank may ask where the cash came from.

 

I came across a thread about it here: http://www.shanghaiexpat.com/phpbbforum/large-money-transfer-from-china-to-usa-taxes-t114012.html

[2mike&jin]

I have just a slightly different spin...on the max amount that can be wired into the US. THERE IS NO LIMIT. The limit we all encounter, is that within the PRC, a single citizen, or person with a visa to live there, can CONVERT $50,000.00 USD per Calendar Year and do anything they want with it. When people want to transfer several million dollars out of China - it's a line of friends, neighbors, work associates etc...that line up to move the money out of the country. They all use their individual PRC ID card and each can convert/or/send the $50K overseas - or take it out and burn it in the street if they want to.

 

There are exceptions. If you want to buy a single family house in the middle of Xiamen - just transfer your $7Million USD to the Bank - hold in USD account - then go talk to an officer to pay the purchase price in RMB - with a single conversion. Retain this paperwork/along with the sales and purchase tax - and at the other end if you ever sell - all the purchase price or the "Cost Basis" can be converted back to USD in one CHUNK. The profit however, if you owned it more than FIVE years, will not have taxes, but is subject to the same "conversion" rules.

 

When one has profit on "Things" one usually get's the cousin, the cousins wife, the mother-in law, etc..etc..to waltz down to the bank - convert $50K, and the bank manager will usually just make ONE BIG transfer to your US bank account.

 

YES, I have done this, yes it has worked every time...yes it is a pain in the ass.

 

Reference the House buying: Dnoblett as always is a great resource. The limit, is in fact $50K USD per person per calendar year. The banks are linked so you can't go to 5 or 6 banks and get around the limit (I tried it). However, there is NO LIMIT on how much can be transferred out of the country -- it is in fact a PER-PERSON limit for conversion. As stated, you can bring back $10M in a suitcase if you want to...just declare it at both ends!!! (Another point on the conversion - added during edit - if someone or multiple someones have done the conversion over several years and your Chinese relative has kept $200K USD in his/her dual currency bank account - they can transfer the ENTIRE $200K USD to you in one shot, no restrictions)

 

BUYING THE HOUSE:

We all have differing views on how title should be held and most of the salient points were brought out. The issue is not a concern when buying but as others have pointed out, when selling, or during divorce. Any person that is not a USC has special "requirements" in terms of paying the "Capital Gains", leaving the country with permission (I think they call it a departure/sail approval - that no one pay's attention to), and some states - have big restrictions on NON- State residents selling without having all of the tax withheld at closing. (Hawaii is one of these that collects all possible Capital Gains, with a cost basis of Zero, on all sales of Real Estate on Foreigners or Non-Legal Residents). For example, you buy a house in Hawaii for $1M and sell it 1 year later for $2m and you are a non-resident or a foreigner - the State requires the closing Agent to withhold tax on the entire $2M a the rate of 7.2%, as if the place didn't cost you a cent. You then file for an adjustment immediately to tell them the cost basis - and they will refund that portion back to you, if it is reasonable....need to send cost paper work. Then at the end of the year you file a tax return for Hawaii and give them all the details of the sale, supporting paperwork, and the last dollars and cents are worked out. All an example of how they treat owners from a different state or country. All considerations for buying property and having any LPR, or Foreigner involved in the title. For your wife this will not be an issue. For the parents it is a big issue....recommend not to muddy the waters with this issue. Also, if you decide to get any "loan" other than from the family they will ask if any of the money has been gifted or borrowed from anyone. I thought I heard that you view the 100K as a loan from the family. DON"T FORGET TO BE HONEST - and list this as a liability...per the rules. Of course, you don't want to do this....so think about what you really want and need to do!

 

Best of luck in buying your house......it is an exciting time in a young couples life. Sounds like there are local members there than can assist and give local knowledge.

Edited September 28, 2012 by 2mike&jin (see edit history)

[tsap seui]

I was hoping you'd see this thread and respond, Mike times duce. If anyone knows what to do , it's you, especially with trying to get large money out of China.

 

I've racked my brain on the home buying end of things for Carl and his wife but I can't see anyway either of them could get a loan with zero income and no active credit score...then again, anything is possible. I called my ol' buddy (a mortgage broker) and asked him about any ideas or programs out there for a loan, and he couldn't come up with anything other than cash. The banking industry has no wiggle room anymore since the crooked dealers took their money and broke the system...no one is gonna want to get caught writing a mortgage in this day and age to a couple with no income stream and no credit history for Carl's wife and no active history for Carl for a couple or three years or so.

 

I'm excited for Carl and wife that they have mom and dad who are willing to help them get a great start though. I remember that first house my first wife and I bought shortly after I came home from Vietnam. Heck, she had just turned 18 by a few months and I was 21...it was a great feeling to have our own place. Heck, even got that feeling with Wenyan last October when we bought the place we're in now, our first American house.

 

Good luck with getting the money into America Carl, you've got a couple of hurdles but ones that can be gotten around fairly easily. And with Kim to help guide you in Portland, you should be finding the home you want pretty quickly.

 

By the way, what visa are you guys going to file for? Have, or will you have been married 2 years or more by the time she has her interview (or would enter POE)? That IR-1 visa is by far the best deal, and least hassle and stress down the road

 

Good luck buddy, I look forward to hearing more good news for you guys..

 

tsap seui

[carl.hops]

Mike, I planned on having her and her parents just send 50k each like you said but I had no idea the bank would just send it all in one amount, that's really good to know! I'm sure it will be a pain in the butt, but so has been sending money back home with western union, no one ever knows what the heck their doing, this I'm sure they've got down to an art in some places.

 

The wisdom in this thread is priceless, we aren't currently planning on moving over to the states for another six or seven years. Right now we are trying to have a baby (trying to conceive) and once our child is ready to start school, we will move back to Portland. Yakun has a business here, that I volunteer at, as I don't have a work visa, and her income is more than enough. We will be back and forth between China through out the year in order to manage it. So for now this house is mostly for investment purposes, but also a possible future home.

 

Tsap, we know it's a long shot but before she gets pregnant she's going to go down to the Beijing embassy and try for a tourist visa (or some other visa that allows her to visit my family) we will be completely honest, we don't plan on getting married in the states or staying, I think showing her bank statements may be enough to persuade someone that she's got a business worth coming back to. We have been married for almost two years, by the time we move over we will go for that IR-1 visa, the house should come in handy as my proof of residence for the affidavit of support. Do you think I'll need to move back to the states for a few months before she comes over, or is having a home enough to convince them? Also, will I need a job before hand as is needed with the F1 visa? If so I'd have to leave my family, but for how long... I remember you were off in aus with the SO before you made it to the states.

[tsap seui]

Okay, now I understand better what you are trying to do, Carl. Pretty ambitious plan you guys have there, and darn smart too. I hope they give her a visitors visa so you guys can do this. Just keep filing if they deny her.

 

I like your scenerio, if this visitor's visa works out, for her IR-1 application and interview ....your wife has a debt free home in America for you guys to live in, you've been married and lived together in China for several years (maybe 6 or 7 years), and you've got a child together....pretty dang strong bona fide relationship.

 

You won't need to lose one minute from your family by moving over to America, ahead of the family to prove anything for her interview. But, you realize you will need a co-sponsor for the I-864, as well, a job of sorts or at least job prospects will be of help. You can preload your initial application with the house information and highlight the other excellent strengths of your bona fide relationship. A good co-sponsor is going to be a must though.

 

You should have no problem with the immigration visa, the visitor visa may be a bit tough, but let's hope for the best.

 

I'm glad Mike posted for you. He's smart and worldly.

 

I sent over wads of money to build, finish, and furnish our home in China...but did it by Western Union. Only took out $9,500 out of my bank account in any single 10 day period, and sent less than $7,400 (or so) in any 10 day period as per the IRS and Western Union requirements. It took weeks of time to send over what wound up being quite a bit more than $50,000. I didn't get into any trouble other than Western Union finally stopped transactions with me until I sent them proof of where I got the money in my bank account, then they let me send money again....and Wenyan got a visit from a Chinese official who was very polite and humble to she and her family. Once he sat at her mom's kitchen table and saw her new home contract he closed his folder file on her, laughed, and said she was very lucky to have met an American man who would send her lots of money to buy herself a home with. When the official left, Wenyan's mom said, "If Chairman Mao was still alive we would all have been taken outside and shot."

 

It looks like you guys need to send over lots more money to the US than I sent to China, Mike's methods are much better and more sophisticated than stretching out the Western Union process, it was never intended for home buying....LOL

 

I am very happy to see things working out so well for you Carl.t

 

tsap seui