So as the title states above, I'm a non-working US Citizen married to a Swiss who wants to buy a summer home in Sardinia. Apparently, it is easier for a US Citizen to buy property in Italy as there are reciprocity laws in place between US and Italy.
A few concerns come to mind and was wondering if anyone could give some insight...or if there are other threads like this, please point me in the right direction.
1) I do not work, have not worked since I moved here in 2007. I have never filed taxes in all these years that I've lived here as I don't have any income to report.
2) The down payment for the house in Italy would be my husband's savings (technically OURS as we're married but it is HIS income only). If we use this money to purchase a house under my name, would the IRS have something to say? Would I have had to report this amount?
I am aware of FBAR and all that stuff...but I have no bank accounts under my name. I have tried to open a bank account at UBS but as soon as they found out I was American, they basically threw me out the door. So all my accounts are under my husband's name.
Any insight would be appreciated. Thanks in advance.
apparently, the problem with a swiss buying property in italy is there are limits to how much land you can own. our accountant told us "Das Grundstück ist leider zu gross für ein Schweizer Bürger (Maximum 1000m2). Wenn Ihre Frau auch US Amerikanerin ist, kann der Kauf problemlos getätigt werden. Ansonsten kann die Liegenschaft durch eine italienische GmbH (Srl) erworben werden."
Sorry not much to contribute on the purchase of Italian real estate, others are more knowledgable.
Bit OT, but just be aware of the FBAR reporting requirements if you have interest in such Bank accounts or signature authority of the accounts that may be in your husband's name only. It would most likely require reporting if over the threshold. Gotta love those US exterritorial laws.
yes, very aware of all that which is why i have no authority whatsover on any of "his" accounts. literally none. if i have any inquiries on these accounts, he has to call and ask. it's really annoying. it is something we will have to look further into as we get older because god forbid, something happens to dear husband, i'm pretty much stuck.
That is worrying, tbh. I would call back and have a discussion. Perhaps they've "evolved" since 2007. As a side note, we're American and we each have separate and joint accounts at UBS. They tried to set up all the accounts in his name bc (insert archaic reason).We shut that down pretty quick.
You are right to be concerned about all assets being in his name only if something (God forbid) should happen to him. And you don't have to be old for things to happen.
If you are going to buy this property in your name does that mean you are in a position to purchase the property outright? If not how can you get a loan to do so with not income or source of wealth? If your partner applies for the low how can he offer the property as security for the loan if he does not own it?
At the same time a person with no bank account and no source of income is somehow magically going to come up why sufficient funds to purchase a property... I'd image that would raise red flags with the tax authorities in both Switzerland and the US, plus of course the usual MLA flags.
Is the lawyer skilled in doing this kind of activity over three jurisdictions? This seems a complex issue and not one to make a mistake with.
your concerns and red flags are exactly why i am asking these questions. out of the blue, here comes an american with no income and no assets and she's going to magically buy a house in italy. in my mind, yes, this would raise concerns with the IRS...especially if i am buying this property as an american in my name.
we will be consulting with an attorney on this and several other concerns of mine as an american living in switzerland. i just wanted to put this out there to see if anyone had a similar experience.
Hello, the biggest issue is getting a trusted commercialista and lawyer in Italy, that also has had experience with providing cross border documents where needed - you will need to declare your property for Switzerland tax returns if you are resident here as there is a very small tax to pay. For the US, I guess you have a US tax advisor?
About Italy, the pitfalls and worries - using a local lawyer in cahots with owner (or supposed owner), making sure the property is all legal and registered in the local register (any works, modifications etc certified and registered/taxes paid).
The sale price and the fiscal value are two different things, some times the fiscal value is 3 or 4 times lower... important to note. And don't forget to get the whole thing insured as soon as you own it.
Also once you own the property, resident or not you will have to start paying some bills, annual property tax, bin tax, tv tax.. not possible to get out of these all anymore, and you do get fined if you don't (or even get your house confiscated)