Institutional Guide: US Property & FIRPTA Compliance

1. Executive Summary

The US real estate market has always been a safe haven for international capital. Ownership without citizenship requirement makes this market globally attractive.

Strategic Highlights:

◈ Federal laws provide complete ownership rights to foreign nationals.
◈ LTV ratios typically range from 50% to 70%.
◈ FIRPTA compliance and LLC formation are essential for risk mitigation.

2. Ownership Structures

Choosing the right structure can reduce your liability and estate taxes by up to 40%.

Direct Holding: Simple setup but high estate tax exposure ($60k exemption limit).

Domestic LLC: Best for asset protection and tax pass-through benefits.

Corporate Trust: Better structure for maximum privacy and generational wealth transfer.

3. Institutional Financing

Financing Type	Down Payment	Interest Spread
Foreign National Mortgage	30% - 40%	+1.25% Par
DSCR Investment Loan	35% - 45%	Based on Yield
Private Asset Lending	40% - 50%	+2.5% Par

Documentation Checklist:

Passport & Valid Visa
International Credit Report
Proof of Liquid Reserves
Certified Tax Returns
Verified Proof of Funds
Bank Reference Letters

4. FIRPTA Regulations

Under the Foreign Investment in Real Estate Property Tax Act (FIRPTA), 15% withholding is mandatory, but some exemptions are possible.

Exemption Thresholds:

• Price < $300k: 0% Withholding (Resident use required).
• Price $300k - $1M: 10% Withholding rate.
• Price > $1M: Standard 15% rate applies.

Critical Compliance:

Withholding responsibility lies with the Buyer. Failure to file Form 8288 can result in severe penalties.