BuzzBuzHome.com, a website that is, “focused on cataloguing all new residential projects in Canada, connecting purchasers directly with sellers, and providing social tools that enable collaboration amongst purchasers and industry experts” recently interviewed David for their blog.
Tax law extraordinaire, David A. Altro, teaches us how to own US property the Canadian way
BuzzBuzHome Blog
November 14, 2011
Today we had the opportunity to speak with David A. Altro, the managing partner at the law firm Altro and Associates. With 30 years of experience and offices in several Canadian and American cities, David is the go-to guy for advice if you’re considering purchasing property or moving to the US.
Now we’re sure he wouldn’t mind if you showed up at his office or gave him a call on his cell with your question about purchasing property in the US, but why inconvenience yourself when you could just read the latest edition of his book “Owning U.S. Property the Canadian Way.”
In our interview David discusses the important points contained within the updated and expanded second edition and talks about why purchasing property in the US doesn’t have to be a hassle.
This Friday (November 18) there’s a seminar in Toronto at the Westin Prince called “Moving to the US the Canadian Way.” If you’re interested in learning more, you can register for the seminar on the Altro and Associates website.
And now, here’s David!
BBH: Tell us a bit about your firm?
DA: I’m managing partner at the law firm Altro and Associates. We’ve got offices in Toronto, Montreal, Calgary and Vancouver and three in Florida and one in Phoenix.
BBH: How long have you been involved in this industry?
DA: When I moved to Florida in 1982, I got a US law degree and became a member of the Florida Bar in 1984. Since then, I’ve been working in tax and cross border planning. In 1988 I moved back to Canada with my family and continued on. The whole practice grew and grew.
BBH: This is the second edition of your book “Owning US Property the Canadian Way” was just published. When did the first edition come out?
DA: 2009.
BBH: What did you hope to accomplish when you set out to write the initial edition of the book?
DA: I wanted to help demystify the issues people were raising. These issues were causing Canadians to worry about buying US property. The book is meant to help Canadians understand the issues and to plan properly to avoid the problems.
BBH: What’s new in the second edition of the book?
DA: On December 17, 2010, the US signed in a new tax law that affects Canadians. I wanted to explain it and provide new tax planning to avoid the problems. The other reason is a lot of Canadians want to move to the US so I did a chapter on moving to the US “the Canadian way.” On Friday I’m the speaker at a seminar at the Westin Prince in Toronto put on by Cross Border Planning Partners and it’s called “Moving to the US the Canadian Way”.
BBH: Some people might say, considering the economic climate in the US, why is it still a good time to buy property in the US for Canadians?
DA: Because the Canadian dollar is historically low, all the US real estate is on sale and interest rates are very low.
BBH: What are some of the most popular places to invest in the US for Canadians?
DA: Florida is number one. Traditionally, most Canadians go to Florida and Ontarians go to Florida the most. It’s got the ocean and it’s traditionally been a great direct flight down. If you look at Florida, Arizona, California or Texas, all of them have seen the prices come down dramatically.
BBH: What are some common mistakes people make when purchasing property in the US?
DA: Putting the title to the property in their name personally. That leaves them exposed to a few problems. Number one if Florida probate on death. That’s the legal procedure required in Florida when you die to transfer the property to your beneficiary. It’s expensive, time consuming and it freezes the estate. If you put it in a “cross-border irrevocable trust” then it avoids that problem.
The second problem is if you pass away then you may have the US estate tax, but if you have it in trust, the trust doesn’t die. You own the trust, the trust owns the property so upon death, there’s no tax.
BBH: You bring up some “red flags” in the book. What are some of the most important red flags to look out for?
DA: One of the red flags is if you put in a corporation, the red flag is you’re going to have high capital gains tax. Another red flag is if you need financing, you can’t get financing in a corporation. You need to watch out for those type of things. Another one is if you become mentally incapacitated and you have the property in your name personally, you’re going to have to go through a Florida guardianship procedure which can be very expensive. Put it in the trust so these red flags aren’t going to hit you.
BBH: Do you think you’ll keep putting out new editions of the book in the future?
DA: Absolutely! There’s one thing we know about tax law, it’s always going to change. It’s always tied to the politicians, politicians trying to get into power and making new tax plans.
Thanks for chatting with us David!