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Guam has grown and developed significantly over the years. From a remote and secluded island, it has now emerged as a modern city and has earned the reputation as America’s gateway to Asia.
The government of Guam has put a lot of effort into improving and developing various industries. The main intention is to create business opportunities for both local and foreign investors. While real estate has become a popular investment channel in the last 50 years, Guam real estate has now become a point of interest for many venture capitalists. New real estate markets are rapidly emerging. If you’re a non-local of the island and are looking to invest in real property you might want to look into what Guam has to offer.
There are a few things you will need to know about foreign ownership of property in Guam:
How the property will be used?
Before beginning your property search, it would be best to think ahead as to how you’ll use the property once the deal is closed.
- Will this be a home to stay in while on business?
- A vacation home?
- A place for your children to stay while attending college in Guam?
- For investment?
- Long-term residence in the future?
Do I need to be a U.S. citizen to purchase property in Guam?
You don’t need your citizenship or your green card but your will need your Individual Taxpayer Identification Number (ITIN). ITIN is a tax-processing number assigned to foreign nationals who are required to have one in the United States.
Depending on your nationality, you may also need to present a valid foreign passport, visa and 2 or more valid photo IDs.
By simply buying real estate in Guam, being a U.S territory, does not give foreign owners any rights or privileges concerning legal stay and status. You must contact an immigration lawyer should you be interested to stay in Guam longer than allowed by a standard visa.
Is there a limit to the number of property I can purchase?
Non-U.S. citizens who haven’t declared their intention to become permanent residents (applicants for green card) can only buy one home in their personal name, which must be owner-occupied.
If for investment purposes, a foreigner can form a Guam corporation with at least one local shareholder. There is no limit to the amount of property purchased under the corporation.
How do I begin with my property search?
Foreign buyers should take the time to find qualified and highly experienced real estate professionals to work with. These agents will walk you through the real estate purchasing process, particularly for Guam properties. Buying real estate can be a complicated matter and there are many considerations as no 2 property transactions are the same. The current market in Guam are full of diverse opportunities and possible hazards that only a well-seasoned real estate professional will be able to properly guide you through the whole process.
How do I secure financing?
Your real estate professional can help introduce you to trustworthy and reliable lenders. You will have to authorize them to examine your current financial documents and credit history. This examination will help them determine the total amount you can borrow to purchase your property. It is advisable to get pre-approval for financing before you look into property in order to give you the proper credibility when you make an offer simply because you’ve been pre-qualified by a reputable lender.
Can I purchase property in cash?
Cash purchases are allowed, but since Guam is a U.S. territory it clearly follows U.S. laws which mandates that cash transactions over $10,000 must be reported to the federal government. This requirement applies to all those involved in the transaction (purchaser, real estate agents, attorneys and title companies). The government is simply making sure that the funds were legally obtained.
Cash buyers can easily save money on mortgage application fees, loan origination fees, appraisals and title insurance.
How will my Guam real estate purchase affect my taxes?
The tax liability of a foreign property owner will vary, depending on where the purchaser is from and whether his country has an existing tax treaty with the United States. It would be advisable to consult a tax lawyer who is familiar with your home country’s treaty to help you understand tax-related issues better.
The U.S. government requires foreign nationals to pay U.S. income taxes on any net income received from rental property. If tax returns are not paid on time, a tax of 30% of the gross rental income may be imposed. Remember to file your taxes even if you’re incurring losses in the early years of your investment, otherwise you will be subject to financial penalty.
If you’ve decided to invest in real estate in Guam, it is completely understandable. It’s not at all difficult to fall in love with Guam. The beautiful scenery, rich culture and warm people make you want to go back to experience more. Moving to or simply expanding your property holdings in Guam is perhaps the most exciting decision you’ve made.
Making that kind of investment should never be taken lightly. So if you’re not sure how to go about finding the right property for you, follow these simple steps and start your search today!
Ellen’s Realty has been helping property buyers in Guam since 1997. Their large pool of real estate agents can guide you toward finding the right property for your needs. You can be assured that exceptional service will be rendered to all their buying clientele because they only have well-seasoned, professional and highly trained agents. Their negotiation skills and extensive knowledge of various financing alternatives will go a long way in helping you land the best property that will suit your needs.