Global Opportunities in Real Estate :
Foreign to Foreign Exchanges

Rocketing house prices in many countries have been a powerful draw for many U.S. real estate exchangers in the past few years.

Since mid 2005, prices have risen at double-digit rates in nine of the 17 countries listed in the table below. Those include six European countries: Belgium, France, Spain, Sweden, Denmark and Ireland. Danish property prices are up a whopping 21% over mid 2005.

According to the New York Times, the biggest lift in global housing prices has been in what urban economists call "primate cities.” Those are places where the worlds well-off want to live or visit regularly for work or fun. These cities include London, Paris, New York, Boston, Shanghai, San Francisco, Miami, Sydney and Vancouver. Other popular locations are coastal cities and tourist hubs. Record numbers of baby-boomer Americans are planning to invest in property and retire in Mexico, Canada or abroad in the next 20 years.

This sizzling foreign real estate market offers considerable real estate opportunities and specialized tools like the 1031 Foreign Exchange. Because the U.S. capital gains tax is still applicable to foreign properties owned by U.S. taxpayers, a 1031 Foreign Exchange is an excellent tool for real estate investors to utilize. Foreign exchanges are applicable to U.S. taxpayers who are selling and buying investment property located outside of the United States.* For example, if a taxpayer sells investment property in Canada and acquires investment property in Mexico, the taxpayer can defer the capital gains tax on the Canadian property. All of the normal rules and regulations of a standard, domestic 1031 Exchange apply to foreign exchanges.

As always, it is always important to do your homework before you buy. Regulations governing exchanging and purchasing property in foreign countries vary greatly and investors should be aware that there may be fewer legal remedies if they are defrauded. Some issues an investor should consider before buying foreign property are the ownership rules and regulations, language and cultural issues, currency/exchange rates, banking regulations and government and real estate stability. Many experts suggest working with a good local lawyer in the country you are buying property. Our affiliates (listed below) are always available to help you find a trustworthy, local attorney in their respective countries.

Home-price appreciation for 17 countries over the past year. Mexico not included :

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