In this special Saint Patrick's Day episode of Ask the Hammer, the Retirement Daily reader's question is:
I’ve been thinking about buying property in Ireland. What do I need to know about that?
Jeffrey "The Buckinghammer" Levine, our expert from Buckingham Wealth Partners, answers that there is a lot to know about this topic.
Firstly, you need to understand that if you're dealing with property in a foreign country, that means you're also dealing with the laws of that country. So if you're buying property in Ireland, that means you have to abide by Ireland's laws. You also need to understand what it means to own property in that country.
For most countries, you don't have to hold citizenship in that country in order to buy property. In Ireland, for example, you don't have to be Irish and a citizen of Ireland to buy property there.
Levine also advises that you ask yourself what the reason for buying the property is: A source of income? An investment? A family vacation home?
If it's a source of income, you may need to file taxes in the foreign country in addition to U.S. taxes.
If your property is an investment, then you will likely have to pay your workers in foreign currency, which could mean opening a foreign bank account. This also may mean that you need to tend to foreign asset reporting requirements. (If you don't abide by them, the penalty is very grave!)
Another aspect to consider is whether or not buying foreign property would be financially beneficial (with the exception of a family vacation home, in which financial benefit is not the goal).
Lastly, Levine suggests asking yourself if this is the right time to buy foreign property for you, and if it is the right type of asset.
Stay tuned for more Ask the Hammer!