General country information
Although the USA is well over twice the size of Europe, much interest from UK property investors is centred on Florida, home of the Everglades, Orlando, Key West, Miami and Disney World.
The US as a whole has a mostly temperate climate (excepting Hawaii and Alaska) and offers a comprehensive range of conditions and scenery including the Grand Canyon, Death Valley, and the Rocky Mountains. There are also various natural hazards to consider including volcanoes and earthquakes around the Pacific basin, tornadoes in the mid west, and forest fires in the west.This state has a tropical climate and an extensive coastline that passes from the Atlantic via the Florida Straights into the Gulf of Mexico. Florida is a popular holiday and retirement destination with good letting potential, but is also prone to hurricanes such as the infamous Hurricane Katrina which struck the Gulf Coast area in 2005, and Hurricane Sandy of 2012.
The USA has the world’s sixth largest GDP per capita, and is the worlds largest single national economy. Its nominal GDP was estimated at $16.62 trillion in 2012. It has a mixed economy and has maintained a steady GDP with moderate unemployment and high levels of research and capital investment. Consumer spending was 71 per cent of the USA’s economy in 2012.
The United States is a federal constitutional republic, with the current 2013 President being Barack Obama, the first African-American to hold the position.
The firm warns those wanting to purchase property in the US to obtain legal advice on whether restrictions apply in their circumstances.Also, ‘many states place restrictions on the ownership of real property by foreign nationals. For instance, some restrict, or even prohibit – ownership of land, others deny the right of an alien to inherit real property, and still others permit land ownership by aliens only if the alien’s country of origin grants similar privileges to US citizens’.
Buyers should also check whether the state in which they are purchasing has imposed disclosure requirements on foreign property owners.
Whether or not property is purchased in the name of the investor or through a company can be important in terms of taxation.
‘A foreign investor may purchase real property within the United States in a variety of ways: in his or her own name; through a US corporation, partnership, or trust; or through a foreign legal entity. The income and estate tax consequences of owning or selling property will vary depending on the vehicle through which the actual investment is made’.
The firm warns that ‘a foreign investor who owns the real property directly or through a US corporation or partnership will also likely be subject to US estate and gift taxes, although the insertion of a foreign corporation into the ownership structure may eliminate this exposure’.
Property conveyancing laws vary from state to state but most have disclosure laws that make it illegal for sellers to lie or try to cover up defects in their properties.
When buying, the full cost of the property purchase will be set out in a payment schedule agreed as part of the contract. Some states require escrow accounts to be set up during the buying process to be held in readiness for completion of a deal. Legal fees and other costs are likely to be around 2 per cent of the price of the property. If a mortgage is needed there will be further costs of about 4.5 per cent of the purchase price.In Florida a Contract for purchase and sale or Purchase and sale agreement provided by a real estate agent becomes binding when signed. Although usually pre-printed it is not an official document and can be varied by agreement.
Country information – USA
Area: 9.8m sq km
Population: 311.6m (July 2013 est.)
Principal cities: Washington D.C, New York, Los Angeles, Philadelphia.
Median age of population: total: 36.7 years, male: 35.4 years, female: 38.1 years (2008 est.)
Language: English, Spanish (spoken by a sizable minority – 10.7%)
Employment rate: 95.5% (2007)
Flying time from UK: New York – 7.39hrs, Phoenix – 9.35hrs, Seattle – 10.35hrs
Currency: 1 US dollar = 100 Cents
Time difference from UK: Philadelphia, New York and Washington UTC/GMT -5 hours, Los Angeles UTC/GMT -8 hours, Phoenix UTC/GMT -7 hours, New Orleans UTC/GMT -6 hours, Seattle UTC/GMT -8 hours.
Rate of inflation: 10.7% (2013)
GDP per person: $48,442 (2007)
International dialling code: +1
Average house price: $181,800 (NAR Oct 2008 – existing single family home)
Climate: Mostly temperate, but tropical in Hawaii and Florida, arctic in Alaska, semiarid in the great plains west of the Mississippi River, and arid in the Great Basin of the southwest; low winter temperatures in the northwest are ameliorated occasionally in January and February by warm chinook winds from the eastern slopes of the Rocky Mountains