IRS Taxes and Buying a Home

Member since 30 July 2017

Jerry4usaMember10 February 2018 14:38:06

Hello Everyone,

I do not seek legal advice, just opinions and perhaps the wisdom from someone who has been on my shoes.

I am actively working in moving to Spain as a retiree from USA (Jubilado Spain Visa). As a military retiree, divorced, and currently renting, the 2017 Tax season has been a killer (paying IRS too much money). I have considered buying a home in USA using my VA benefits, leaving it as a rental, so I can shelter from paying too much taxes to Uncle Sam. Then in Spain, as I was told by other experienced EXPATS, I will be renting for a while.

My question: Does anyone knows if this strategy of purchasing a home in USA for tax shelter purposes is a good idea? Or should I wait and buy a home in Spain (although I can not use VA benefits) and use it as a tax shelter for USA income tax purposes?

Thank you.

Very Respectfully,

Jerry

Recienllegada New member

Member since 23 August 2014

RecienllegadaNew member10 February 2018 22:30:05

Hi Jerry, without having sufficient info about US taxes is difficult to comment. Only note that property in Spain in quickly increasing in value. Where would you be buying in Spain. In idea if buying in Spain is to buy 2 properties. So you can keep an eye on it close to you. Talking from exoerience! Juani.

Jerry4usa Member

Member since 30 July 2017

Jerry4usaMember10 February 2018 22:40:55

Thanks for your comments!
Jerry

Alyverd New member

Member since 05 March 2018

AlyverdNew member05 March 2018 03:16:57

Hello Jerry,
I was hoping you could share your findings / updates on your travels. I have been considering Spain or Panama and considering I'm from Florida climate is also a concern.

Thank you for your help.
Aly

claxnes Contributor

Member since 22 May 2016

claxnesContributor05 March 2018 07:39:57

182

As a USA expat, if you as considering the move strictly on a financial basis, you will be disappointed. Both Spain and the US tax on worldwde earnings, so technically you would have to declare your earnings in the US as well as Spain in your Tax home (country of residence). On my US retirement earnings of about $35,000 gross, my Spanish taxes are around 19%, as done by a Spanish accountant. The US has a tax treaty with Spain, so if you file correctly and pay more in taxes in Spain, you will not pay anything in the US and will receive a refund. If one considers some of the benefits of living in Spain, good free national health care (I am married to a Spanish national), a good inexpensive mass transport (in cities), very low violent crime rate, inexpensive university education for children, good schools in most areas, it makes it worth it, at least in my case. As for a home in the US, unless you have a good long term tenant, my advice would be to sell. My experience was unpleasant and costly.