was watching "house hunters international" on the television a week or so back. this particular episode focused on Costa Rica and a 55ish woman's search for a retirement condo. i can't recall actual numbers but her money would buy double the property in the DR..............
- Thread starter Richard Alberto
- Start date
Luxury Real Estate Market
Interesting note, tho, is that +$2 million vacation homes in Florida, on the coast, are now auctioned off at less than $750,000. It makes it very hard to invest elsewhere. Cost of living in the DR compared to the US, living in the exact same lifestyle, does not appear to be hugely (2x +) different.
good point about florida, however, even if i got the 2 mil house on the beach for 500K, what are my property taxes? this could be on the books down at the courthouse for an assessed value of 1 mil. don't forget flood insurance in florida, mandatory , expensive, and hard to get, plus maintainance on a big property. school tax, these costs do not go away............
DR Real Estate Overpriced?
Given the worldwide recession and the tightening of the credit markets, it would be safe to say that real estate prices virtually anywhere in the world are or will be in a correction of sorts. Therefore, Cabarete, like other wonderful places, will experience some degree of downturn. In the long term however, Cabarete real estate will recover and it will prove to be a great investment. There are aspects of Cabarete that make it most appealing that Abe may not fully appreciate. It is a wonderful melting pot of 40 plus nationalities...I love the multiple languages and the cultures that you are not going to get at many other places. There are also the lack of crowds; the enjoyment of spreading a blanket on the beach and not being within arms length of the persons next to you....there is the beauty at looking at the ocean from your deck and the mountains from your porch and there are the costs which are pale in relation to owning a condo, for example, in Florida. The maintenance fee alone on my brothers condo in Florida is more than all of our monthly expense for all costs in Cabarete. Cabarete is certainly not for everyone and any investor is probably not going to turn a profit there in the short term.....but it is a great little place and many of us are glad that we found it.
Given the worldwide recession and the tightening of the credit markets, it would be safe to say that real estate prices virtually anywhere in the world are or will be in a correction of sorts. Therefore, Cabarete, like other wonderful places, will experience some degree of downturn. In the long term however, Cabarete real estate will recover and it will prove to be a great investment. There are aspects of Cabarete that make it most appealing that Abe may not fully appreciate. It is a wonderful melting pot of 40 plus nationalities...I love the multiple languages and the cultures that you are not going to get at many other places. There are also the lack of crowds; the enjoyment of spreading a blanket on the beach and not being within arms length of the persons next to you....there is the beauty at looking at the ocean from your deck and the mountains from your porch and there are the costs which are pale in relation to owning a condo, for example, in Florida. The maintenance fee alone on my brothers condo in Florida is more than all of our monthly expense for all costs in Cabarete. Cabarete is certainly not for everyone and any investor is probably not going to turn a profit there in the short term.....but it is a great little place and many of us are glad that we found it.
Hello Denmay...
I agree on all those counts--Cabarete is a great little place. But it is not unique in the categories you mention.
I think the major annoyance factor of noise and the dangerous pedestrian experience in Cabarete may outweigh the personal space consideration of lying on the beach. And, yes, I enjoyed many a juicy pineapple served up by those hard working Haitian women on the Cabarete beach.
But Central America has all of the international community feel, etc.
It's a matter of choice, for sure. But the prices of real estate in Cabarete continue to baffle me.
Good luck.
Abe
I agree on all those counts--Cabarete is a great little place. But it is not unique in the categories you mention.
I think the major annoyance factor of noise and the dangerous pedestrian experience in Cabarete may outweigh the personal space consideration of lying on the beach. And, yes, I enjoyed many a juicy pineapple served up by those hard working Haitian women on the Cabarete beach.
But Central America has all of the international community feel, etc.
It's a matter of choice, for sure. But the prices of real estate in Cabarete continue to baffle me.
Good luck.
Abe
I am not 100% sure, but about a year of two ago, I was led to understand that Florida passed a legislature which would re-asses tax values also to a lower selling price, so that they could be sold at all.
When we did business in FL, RE tax was around 2% a year in towns and cities. Some properties in county land were virtually tax exempt.
On the other hand, you have INFRASTRUCTURE, even now, something which can still be categorized as an ECONOMY with still some opportunities, you get schools, hospitals and clinics and so forth.
All in all, homes in Southern Florida should be worth more than comparable structures in a third world country nearby which can not offer the warranties and infrastructure FL does.
Some very few developments have banked on the fact that some income heavy US citizens have been able to profit of some short time tax relieve when moving their "official" homestead to the DR for 2 to 3 years.... when you make millions a year in royalties, not having to pay 30 to 40% income tax for such time can make the acquisition of a 2, 3 or 4 Million "home" in La Romana or Punta Cana a real must do bargain, even if they'll only dwell there 90 days or so. This however really does only apply to a very, very limited few locations.
... J-D.
Respectfully, you are overlooking the other side of this coin! With taxes come services upon which you can rely. Today there are very few public services in the Dominican Republic which could be construed as "reliable." ...and we won't even get into the government aspects of this...
I was responding to the investment opportunities. Investments in Florida, currently, are very attractive due to the decline in over-valued properties.
I tend to believe there are areas of the DR which are as attractive, if not more so (albeit for different reasons), but Cabarete is not one of them. I think Cabarete values are grossly over-valued. It is a delightful town, with wonderful people, but condos there are not worth what they are charging.
100% agree! If US visa is not an issue purchase/investing in FL now and until at least 2010 is hundreds times more profitable/attractive/safe/prudent than in DR.
Beyond any comparison. U R kiddin` !!
most expensive by far
Properties in the DR are the most expensive in all the caraibean island/south america even most EU.
I have been looking at nice properties that staid over 5 years in the market and could not be sold. If you buy properties in the DR just for investment, your other probleme is selling your investment?specially if you have to get out quick! assuming you are a mid class USA ,having 1/4 mill tight in a house for 4 years? do the math @ a%7 interest(how much money you'll loose?). The DR has to make some serious ajusments to keep atracting home buyers and mid size investment if they don.t ,they might loose a ton of new residants.
When the USA lift the CUBAN ambargo ,it will be the place to be and invest Vs the DR?
The DR governement has to invest in social infrastructure in the tourist area(north/N east /) like hospital and better residential road to raise te life style of forners and gave a minimum of security.
Unless you are in love , why any USA will investover $700K(for housing and more) and not have a minimum of living garanties has violence/health care and more..?minus go in one of the pacific Island...?
Properties in the DR are the most expensive in all the caraibean island/south america even most EU.
I have been looking at nice properties that staid over 5 years in the market and could not be sold. If you buy properties in the DR just for investment, your other probleme is selling your investment?specially if you have to get out quick! assuming you are a mid class USA ,having 1/4 mill tight in a house for 4 years? do the math @ a%7 interest(how much money you'll loose?). The DR has to make some serious ajusments to keep atracting home buyers and mid size investment if they don.t ,they might loose a ton of new residants.
When the USA lift the CUBAN ambargo ,it will be the place to be and invest Vs the DR?
The DR governement has to invest in social infrastructure in the tourist area(north/N east /) like hospital and better residential road to raise te life style of forners and gave a minimum of security.
Unless you are in love , why any USA will investover $700K(for housing and more) and not have a minimum of living garanties has violence/health care and more..?minus go in one of the pacific Island...?
Keep looking, that's not true.
Have you looked at St. Barts recently?
But I agree, the pricing is over inflated in some areas here.
I have no doubt we will see a downtown in the market in the coming months.
As for Cuba, we have been hearing this for years.
If California has a huge earthquake, I'm sure real estate
pricing will be effected, but that hasn't stopped people
buying etc.
You are correct! But maybe I could start selling some 'future beachfront' property in Nevada? ;-)
DR for a few years to avoid taxes on royalties???
Hello, JD
Did I read your post correctly? Were you suggesting that living in the DR for a few years would allow US citizens to escape/avoid income taxes on royalties?
The US is one of those places that taxes you on worldwide income no matter where you are unless you actually give up your citizenship--something that is increasingly difficult to do. The IRS is not letting anyone off the hook.
If you believe that by being out of the US no taxes are due on certain income, I am afraid that you are mistaken.
That may not be what you were saying--but perhaps you could clarify.
No, I do not work for the IRS---well, any more than any other US citizen taxpayer does!
Hello, JD
Did I read your post correctly? Were you suggesting that living in the DR for a few years would allow US citizens to escape/avoid income taxes on royalties?
The US is one of those places that taxes you on worldwide income no matter where you are unless you actually give up your citizenship--something that is increasingly difficult to do. The IRS is not letting anyone off the hook.
If you believe that by being out of the US no taxes are due on certain income, I am afraid that you are mistaken.
That may not be what you were saying--but perhaps you could clarify.
No, I do not work for the IRS---well, any more than any other US citizen taxpayer does!
I believe to understand that, that was what Julio Iglesias did, after having somewhat of an argument withe the US IRS in the '90's. He was a Miami resident (really still is a fixture there), but moved his "official" or "legal" residence to Punta Cana or La Romana (Casa de Campo) for 3 years quite "aloud" and threrewith started quite a trend at both locations with US residing Latin artist. Since Iglesias was quite outspoken about the whole thing, he might have triggered quite some "business" for these locations (actually he went on to invest quite heavily in Punta Cana, and is, so I understand, one of the share holders of PUJ airport. While he has spread his "interests" around the world to place like Spain too.).
I have not followed up on any of them (since I have no interest in their person for that mater), so I would not know if they re-filed for homestead at their original locations in the US or moved their residency status to other tax-heaven locations.
Quite a number of US artists have made tax deals with other countries, like Switzerland at one or the other time... Tina Turner, Charles Bronson, David Bovie, Roger Moore etc... come to mind (the later 2 being Brits, I believe).
... J-D.
overpriced
In Nov.,went to cap cana and punta cana again to see properties and came away with feeling that they are very overpriced and a poor value
looking at buying a nice place with cash in teh Dr to retire to for 3 months each year
first came to DR in 1979 as peace corps vol and return yearly
been in every town inthe entore country
sad that i cant not buy here yet as it is just a bad business deal
properties near one of my plants in phoenix are selling from the banks for 50% of cost from 2 years ago
not looking to steal a house just want to pay a fair price!
any help from people on the ground in DR now if the prices are more realistic
thanks
dd
In Nov.,went to cap cana and punta cana again to see properties and came away with feeling that they are very overpriced and a poor value
looking at buying a nice place with cash in teh Dr to retire to for 3 months each year
first came to DR in 1979 as peace corps vol and return yearly
been in every town inthe entore country
sad that i cant not buy here yet as it is just a bad business deal
properties near one of my plants in phoenix are selling from the banks for 50% of cost from 2 years ago
not looking to steal a house just want to pay a fair price!
any help from people on the ground in DR now if the prices are more realistic
thanks
dd
Stay away from the over-promoted areas such as Punta Cana and Cap Cana. Head to the north coast. Property is less expensive and equally abundant. Get a very good RE agent to help you.
Taxes on Royalties
Abe is correct that US citizens (and permanent residents) are taxed by USA on their worlwide income. Non-residents receiving US source income (such as the royalties mentioned by OP) are generally subject to withholding at 30%. Do a Google search for IRS Publication 515 for details.
Abe is correct that US citizens (and permanent residents) are taxed by USA on their worlwide income. Non-residents receiving US source income (such as the royalties mentioned by OP) are generally subject to withholding at 30%. Do a Google search for IRS Publication 515 for details.
But remember that the first $83,500 USD are 'tax-free' from the IRS providing you qualify by living outside of the United States for roughly 260 days per year. This is a per person deduction. So a couple can make $167K off-shore and not have to pay any US taxes.
irs.gov
Its even more for tax year 2008:
The foreign earned income exclusion amount is adjusted annually for inflation, starting with the 2006 tax year. For 2008, the maximum foreign earned income exclusion is up to $87,600 per qualifying person. If married and both individuals work abroad and both meet either the bona fide residence test or the physical presence test, each one can choose the foreign earned income exclusion. Together, they can exclude as much as $175,200 for the 2008 tax year.
Its even more for tax year 2008:
The foreign earned income exclusion amount is adjusted annually for inflation, starting with the 2006 tax year. For 2008, the maximum foreign earned income exclusion is up to $87,600 per qualifying person. If married and both individuals work abroad and both meet either the bona fide residence test or the physical presence test, each one can choose the foreign earned income exclusion. Together, they can exclude as much as $175,200 for the 2008 tax year.