What is the U.S. real estate investment policy?

In recent years, buying a house in New York has become the first choice for overseas investment by domestic high-net-worth individuals. As the center of global finance, fashion and culture, New York has also attracted the attention of global investors. Come with me to see what the U.S. real estate investment policy is.

1. Main taxes related to housing

The main taxes related to housing in the United States are: ① Real estate tax, also known as real estate tax. Levy on land and buildings requires annual payment. The tax base is a certain percentage of the assessed value of the property (the regulations vary from state to state, most ranging from 20% to 100%). Currently, all 50 states in the United States levy this tax, and the tax rates vary between states and local governments, ranging from about 1% to 3%. Real estate taxes are mostly levied by local governments. ②Real estate transaction tax. Payable when real estate is purchased or sold. Different states have different tax rates, ranging from 0. 01% in Colorado to 2. 2% in the District of Columbia. About two-thirds of the states that impose this tax have tax rates below 0. 5%. Fifteen states, including Mississippi, do not impose a real estate transaction tax. ③Income tax. Personal income tax is subject to a progressive progressive tax rate, with the lowest tax rate being 10% and the highest tax rate being 35%. This tax is applicable to income from real estate rentals. Capital Gains Tax is levied based on the price difference income obtained from the sale of real estate. If the interval between purchase and sale exceeds one year, the applicable tax rate is lower. The interval between purchase and sale does not exceed one year, and the applicable tax rate is higher. The same rate as general income tax. ④Inheritance tax and gift tax. This tax is levied on homes as inheritance and when they are gifted.

2. Tax preferential policies for the housing industry

The tax incentives for the U.S. housing industry can be divided into two types based on the objects. One is tax incentives for homeowners, and the other is tax incentives for homeowners. This is a tax benefit for housing investors. The total housing-related tax expenditures of the US federal government in fiscal year 2007 were US$131.1 billion. Affected by the financial crisis, the total tax expenditures in fiscal year 2008 decreased to US$111.1 billion.

1. Tax incentives for homeowners

(1) Deduct mortgage interest and real estate tax from taxable income.

Early U.S. tax laws stipulated that interest payments on all mortgage loans could be deducted when collecting personal income tax. Since 1986, only interest payments on loans used to purchase, build and repair housing have been tax deductible, which has greatly stimulated the development of housing construction and people's enthusiasm for buying houses. Since 1997, homeowners have been allowed to deduct from their taxable income mortgage interest on their primary residences and secondary residences worth up to $1 million. Deducting mortgage interest from taxable income is one of the federal government's largest tax expenditures, reducing taxes by approximately $73.7 billion in fiscal year 2007. In addition to mortgage interest, homeowners can subtract from their taxable income the real estate taxes they paid on their primary residence during the tax year. Through this policy, approximately US$28.5 billion in tax relief was achieved in fiscal year 2007. In fiscal year 2007, personal income tax relief resulting from these two deductions accounted for 78% of total housing-related tax expenditures that year.

(2) Capital gains exemption on the sale of primary residence.

With the implementation of the Taxpayer Burden Reduction Act in 1997, the original capital gains tax exemption policy for housing sales was adjusted, the standards for exemptions and exemptions were unified, and the scope of benefits was expanded. Under this act, homeowners are exempt from federal capital gains tax on (part of) the proceeds from the sale of their primary residence that they have lived in for two (which may be non-consecutive) years within the past five years. The maximum gain that is exempt from capital gains tax is $250,000 for single homeowners and $500,000 for married couples. Since housing prices in the United States are not high and housing prices change relatively little, few housing sales can reach the above amount. For certain special circumstances, such as change of work location, health reasons, unforeseen changes in circumstances (death, divorce, separation, multiple births by the taxpayer or other specific qualified individuals), the home can be sold as if it had been lived in for the past 5 years. Capital gains tax is reduced based on the number of qualifying days equal to 730 days (two years). Householders can enjoy this discount once every two years. Through this policy, approximately US$16.8 billion in tax relief was achieved in fiscal year 2007, accounting for 12.8% of the total housing-related tax expenditures that year.

(3) Tax reductions and exemptions for homeowners who are below the tax exemption standard.

Households who are below the tax exemption standard cannot enjoy the income tax deductions brought by mortgage interest and real estate tax deductions. According to the Housing Assistance Act implemented in 2008, in 2008 and 2009, this group of homeowners can deduct a certain amount of property tax (Property Tax) from their taxable income each year to obtain corresponding tax relief. For single homeowners, the maximum deduction is $500; for married couples filing jointly, the maximum deduction is $1,000.

When the property tax paid is lower than the maximum amount, the amount of property tax paid shall be applied.

2. Tax incentives for housing investors

(1) Low-income housing tax subsidies.

Established by the Tax Reform Act of 1986, it allows investors in qualified rental properties to subtract a fixed "qualifying basis" of the property from their federal personal income tax payable each year for 10 years. Proportion. The "qualification base" is calculated as follows: subtracting the land price and other related expenses from the total development cost of the project is the "qualification base", and the qualifying base is multiplied by the proportion of low-income household units in the project to get the "qualification base". When the project is located in a "difficult development area" where housing prices are relatively high relative to income, or a "qualified census area" where low-income families are concentrated, it will receive an additional 130% "base expansion factor" to increase the qualification base value. For new projects and major renovation projects, the total tax subsidy for 10 years is equivalent to 70% of the qualification base value, and the annual tax subsidy available is about 8% to 9% of the qualification base value; for renovation costs less than 3,000 per unit For U.S. dollar real estate or those that also receive other federal funding, the total tax subsidy for a 10-year period is equivalent to 30% of the qualifying base value, and the annual tax subsidy available is approximately 3% to 4% of the qualifying base value. In fiscal year 2007, the program provided approximately $5.1 billion in tax relief, accounting for 3.9 percent of total housing-related tax expenditures that year.

(2) Housing-related tax-exempt bond issuance.

The main tax-exempt bonds related to housing include mortgage revenue bonds, home loan tax credit certificate bonds and multifamily housing bonds. The interest earned on the purchase of mortgage revenue bonds issued by states to provide low-interest mortgage loans to first-time homebuyers and low- and moderate-income households (with incomes not higher than 115% of the local income average) is exempt from income tax and is obtained by issuing the bonds. The low-interest loans provided by the proceeds can be used to purchase new housing or existing housing, and the housing price is required to not exceed 90% of the regional average housing price. Interest on bonds issued for the purpose of issuing home loan tax credit certificates is exempt from income tax. First-time homebuyers with low- and moderate-income households can use the voucher to deduct 10% to 50% (up to $2,000) of the mortgage interest they pay from their federal tax bill. This method provides tax benefits to households whose income is insufficient to qualify for a mortgage interest deduction refund. In fiscal year 2007, $1.3 billion in interest on the two bonds was exempt from income tax. Interest earned on the purchase of multifamily housing bonds issued by states to provide low-interest mortgage loans to finance rental housing developments is exempt from income tax. At least 20% of the housing units in these rental properties (15% in some targeted areas) must be reserved for households with incomes no higher than 50% of the area average, or 40% of the units must be reserved for households with incomes no higher than 50% of the area average An average of 60% of households are retained. In fiscal year 2007, interest on multifamily housing bonds was exempt from income taxes for $700 million. In fiscal year 2007, tax relief resulting from housing-related tax-exempt bond issuances accounted for 1.5 percent of total housing-related tax expenditures that year.

(3) Tax subsidies for the renovation of historical buildings.

The Historic Building Renovation Tax Subsidy was established by the Tax Act of 1978. It allows investors participating in federally designated historic building renovation projects to receive federal income tax subsidies. A subsidy worth $1 is equivalent to a tax deduction. Goes to $1 of income tax payable. The amount of this subsidy is equal to 20% of the project repair costs. Tax subsidies for the renovation of historic buildings apply to both residential and non-residential buildings. In fiscal year 2007, tax subsidies for historic building renovations were $400 million, accounting for 0.3 percent of total housing-related tax expenditures that year.

(4) The depreciation of rental housing is higher than the income tax reduction caused by other depreciation systems (Alternative Depreciation System). In fiscal year 2007, this tax credit was $4.3 billion, accounting for 3.3 percent of total housing-related tax expenditures that year.