Foreign Investment in U.S. Real Estate – A F.I.R.P.T.A. Introduction

By October 23, 2020 No Comments

Originally published in Insights Volume 6 Number 4 by Ruchelman P.L.L.C. 


Whether in an up or down economy, the U.S. is attractive for foreign investors.  U.S. economic and legal transparency, as supported by appropriate legal protection and a predictable regulatory environment, further enhances the attraction for foreign investment.  According to Henley & Partners, a key concern for high net worth individuals (“H.N.W.I.”) is unease over political and economic uncertainty, which continues to drive key investment decisions such as owning wealth in offshore structures.  As a result, real estate has now become the third-largest asset class – with residential property being more sought-after than commercial property for those over 40 years old.

Like anyone else who invests in real estate, foreign investors buying real estate in the U.S. must evaluate the terms and conditions of the purchase to determine if it makes sense in a particular set of circumstances.  However, non-U.S. investors must evaluate an additional factor that will come into play when they dispose of the property, the Foreign Investment in Real Property Tax Act (“F.I.R.P.T.A.”).

About the Author 

Alicea Castellanos is the CEO and Founder of Global Taxes LLC. Alicea provides personalized U.S. tax advisory and compliance services to high net worth families and their advisors. Alicea has more than 17 years of experience. Prior to forming Global Taxes, Alicea founded and oversaw operations at a boutique tax firm, worked at a prestigious global law firm and CPA firm. Alicea specializes in U.S. tax planning and compliance for non-U.S. families with global wealth and asset protection structures which include non-U.S. trusts, estates and foundations that have a U.S. connection.

Alicea also specializes in foreign investment in U.S. real estate property, and other U.S. assets, pre-immigration tax planning, U.S. expatriation matters, U.S. persons in receipt of foreign gifts and inheritances, foreign accounts and assets compliance, offshore voluntary disclosures/tax amnesties, FATCA registration, and foreign companies wanting to do business in the U.S. Alicea is fluent in Spanish and has a working knowledge of Portuguese.

Alicea is an active member of the Society of Trusts & Estates Practitioners (STEP), the New York City Bar, the New York State Society of Certified Public Accountants (NYSSCPAs), the American Institute of Certified Public Accountants (AICPA) and the International Fiscal Association (IFA).  She is the New York/Northeast Regional Representative of the Women of IFA Network (WIN). Distinctly, in 2020, Alicea was awarded with a prestigious NYSSCPA Forty Under 40 Award. She was selected as someone that has notable skills and is visibly making a difference in the accounting profession.

Please note: This content is intended for informational purposes only and is not a replacement for professional accounting or tax preparatory services. Consult your own accounting, tax, and legal professionals for advice related to your individual situation. Any copy or reproduction of our presentation is expressly prohibited. Any names or situations have been made up for illustrative purposes — any similarities found in real life are purely coincidental. 

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