# Canadian buying a Duplex in America



## mrcheap (Apr 4, 2009)

Hi all,

I'm still down in the US, now living and working in the midwest (Illinois). I'm here on an H1B visa. I've decided to buy property here and have settled on an upstairs / downstairs duplex (with a purchase price of $70k).

I'll be receiving rental income from the tenant, but will also be living in the unit year round. I'll be buying the building for cash (so getting a mortgage isn't an issue).

Any advice on things I should be aware of / look into? I was able to navigate the taxes with my American income last year, but does property make things complicated enough that I should hire a cross-border accountant?

Thanks in advance for any thoughts!


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## Ponderling (Mar 1, 2013)

Yes, it is always nice to keep long term complications in mind when considering acquisitions. 
First things first - are you planning on buying with cash, or are you going for a mortgage? If a mortgage, I would look to see if one is readily available. Non Canadian bank lenders, who do not have 100%loss protection courtesy of CMHC taxpayer funded entity can tend to be much more reluctant to lend to a non resident, let alone a resident.


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## Eclectic12 (Oct 20, 2010)

The articles I've read have indicated that some Canadians aren't aware they can't work on their property, if a rental is involved. I'm not what changes the H1B visa would make as I'm not familiar with it.

Here are some articles:
http://www.moneysense.ca/property/be-an-american-landlord-2
http://canadianinvestor.com/index.php/buying-u-s-real-estate-consider-this/
http://www.cpaontario.ca/MediaRoom/MediaArticles/RealEstateArticles/1009page17203.aspx
http://www.mnp.ca/en/media-centre/p...equences-for-canadians-who-own-us-real-estate


Cheers


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## Eclectic12 (Oct 20, 2010)

Also ... if you are buying RE, it sounds like you will be in the US a long time.

Have you passed the Substantive Presence Test yet so that you need to file for a closer connection exemption to avoid being taxed by the US on your worldwide income?
Passing the SBT changes the status to a resident alien.
http://www.irs.gov/Individuals/International-Taxpayers/Determining-Alien-Tax-Status
http://www.irs.gov/Individuals/International-Taxpayers/Taxation-of-Resident-Aliens

You might want to check out the thread in the Taxation section.
http://canadianmoneyforum.com/showthread.php/20754-FATCA-new-US-tax-law


Cheers


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## mrcheap (Apr 4, 2009)

Hi Ponderling, 

Thanks for your reply. I'll be buying with cash - no mortgage.


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## mrcheap (Apr 4, 2009)

Eclectic12 said:


> The articles I've read have indicated that some Canadians aren't aware they can't work on their property, if a rental is involved. I'm not what changes the H1B visa would make as I'm not familiar with it.
> 
> Here are some articles:
> http://www.moneysense.ca/property/be-an-american-landlord-2
> ...


Good articles, will read through them, thanks!


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## mrcheap (Apr 4, 2009)

Eclectic12 said:


> Also ... if you are buying RE, it sounds like you will be in the US a long time.
> 
> Have you passed the Substantive Presence Test yet so that you need to file for a closer connection exemption to avoid being taxed by the US on your worldwide income?
> Passing the SBT changes the status to a resident alien.
> ...


I was on a J1 Visa last year, but it looks from what you've linked to that I'll be considered a resident alien for tax purposes after this year. Bummer.

Thanks!


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