What about domestic real estate after joining American citizenship?

Considering Mabel's education and future pension, Mabel's father David decided to apply for immigration to the United States before Mabel went to middle school. However, he doesn't know what to do with his real estate in China: sell or not? How much tax should I pay to the United States if I sell it?

Let's analyze it below.

First of all, we must clarify the issues of immigration and naturalization.

We often say that there are two ways to immigrate, one is the residence qualification abroad, commonly known as green card/PR; The other is to join a foreign nationality.

If you only have the long-term or permanent residency in an overseas country, such as the US green card, but still retain China nationality, in this case, you can go back to China at any time, because you are essentially a citizen of China, and domestic property will not have any influence.

If you decide to join another country's nationality, since China does not support dual nationality at present, when you choose to join another country, you give up your China nationality.

In this case, some Mabel parents are a little panicked.

Some people think that immigrants will lose their houses if they get foreign passports and cancel their China passports!

It is said that some people will transfer their ownership to their relatives in order to keep their houses in China, and then only take a foreign passport and live alone. That sounds terrible!

But can't foreigners buy and sell houses in China? If you think about it, you will know that this is not the case.

Property that used to belong to you is still yours even if you change your nationality. Please refer to China Property Law. After the introduction of the property law in 2007, there are clear provisions on the ownership of real estate and the right to use land.

Changing nationality will never affect the ownership of property. The down payment of real estate of foreign nationality still belongs to the personal property of the obligee. So your house still belongs to you.

How to deal with domestic real estate?

Sell or not sell?

On the issue of real estate disposal, it needs to be analyzed according to different situations.

1. At present, domestic real estate is still in the state of maintaining or increasing value.

If you are not short of money, you can temporarily keep the property and find someone to help you.

You can rent out the house to collect rent, or entrust the house to relatives to live and look after it, so that your assets can be preserved, because the domestic housing prices are still relatively stable and are relatively good assets. Wait until you are sure to adapt to life abroad and settle down for a long time before dealing with domestic real estate.

This method is applicable whether you have a valid domestic identity card or not.

2. If you don't want to be an American citizen.

In other words, Mabel's parents will still hold China passports in the future, which makes it much easier to deal with real estate. Only after the account and ID card are cancelled can the passport be used to handle the relevant procedures.

The whole family emigrated, changed their nationality and decided to sell the house.

If you have a valid domestic identity card, you can directly entrust the sale of the house.

If you don't have a valid domestic ID card, you must first entrust the name change, because the real estate license is linked to the old ID card (only visible inside the real estate bureau), so the first step is to change the name, and the real estate license is linked to the American passport. After the new house certificate comes down, we will entrust to sell the house.

Note: If you want to become a citizen of an immigrant country, especially if you change your name during the naturalization process, you must pay attention to keeping the evidence that "that person is this person".

Mabel's parents need to make a statement, which lists the previous Chinese ID number and the new foreign passport number, and attach copies of the two documents to make a notarial certificate, and then send it to the China Consulate for certification.

4. How to pay US tax when China real estate is sold after emigration?

The IRS doesn't care when your house was bought or when you landed. It only cares about whether you are an American taxpayer when you sell your house.

If so, then all your appreciation needs to pay capital gains tax.

How to pay taxes on the income from selling houses?

In the IRS tax clause, the provisions are as follows:

Real estate capital gains tax = (sales price _ sales cost adjustment cost price) * capital gains tax rate

Those held for less than one year are regarded as short-term capital income tax, and the tax rate is the highest, that is, the higher the income, the higher the tax rate, and the highest for more than one year, which is regarded as long-term capital income tax. The highest tax rate is 20%. If the annual income exceeds 200,000, there is also a net investment income tax.

For example:

Suppose David bought a house in Shanghai with 10 years ago with 10 yuan. According to the rising trend in recent years, this house is now worth 10 million yuan. He arrived in America this year. Five years later, the market value of this house was 6.5438+0.5 million, and David decided to sell it at this time.

If his capital gains tax rate is 15%, what he needs to pay is (1500-100) *15% = 21000 instead of (1500-/).

But don't be too afraid, there are still some principles in the United States that consider the interests of taxpayers.

0 1. Avoid double taxation

On the one hand, if a taxpayer pays taxes on an overseas income in an overseas country, then this part of the tax can be deducted from the taxable amount in the United States. In other words, taxes paid in China can also be offset in the United States.

According to the current policy of selling houses in China, the premise of tax exemption is that the house has been occupied for more than 5 years and the family has the only house.

In addition, there may be business tax, deed tax, stamp duty and so on in selling houses in China. China also has a lot of taxes. Just because China is a seller's market, this tax is actually paid by the buyer for the seller.

According to the Sino-US tax treaty, the tax paid in China can directly offset the tax burden of the United States. So as long as your name is written on the tax bill when you sell the house, you can use it to offset the tax.

02. Set up tax exemption for overseas income.

The United States has set an exemption amount for taxpayers' overseas income, which is 10000 US dollars in 20 19 years. In other words, if the conditions are met, the part below 1 10,000 US dollars does not need to pay any tax to the US government. However, you still have to declare your overseas income.

03. Tax incentives for owner-occupied housing

There are tax incentives for buying and selling self-occupied houses in the tax regulations of the IRS. Specifically, as long as you have lived in this house as your main residence for two years in the past five years, you can enjoy the tax exemption of $500,000 from the capital gains of the sale of the house by both husband and wife. It also applies to overseas properties.

That is to say, Mabel's father David sold his house in China in the first three years after landing in the United States, and the difference of 3.5 million RMB is tax-free.

Attention!

Considering the tax problem, some Mabel parents choose to sell their property before becoming tax residents in the United States to avoid paying capital gains tax on the property.

There are also some Mabel parents who will sell the property at a price close to the current price and then buy it back, so that the value-added part of the property will be reduced and the capital gains tax will be reduced in the future.

However, in fact, some taxes have to be paid in China. In the end, it is not cost-effective, or tax agents need to calculate according to the price of the house!