Hire Act (March 2010) may have dramatic consequences for US citizens investing abroad

The Hiring Incentives to Restore Employment (HIRE) Act was signed into law in the US in March 2010 and whilst most of the act relates to specific incentives to create and employment within the USA, there are specific parts (Foreign Account Tax Compliance or FACTA) that may have long reaching consequences for US citizens wishing to invest or own real estate abroad.

Enacted by Congress in 2010, FATCA targets non-compliance by U.S. taxpayers using foreign accounts. FATCA requires foreign institutions to tell the IRS about accounts held by U.S. taxpayers or foreign entities in which U.S. taxpayers hold substantial ownership. To avoid withholding, a participating institution must enter into an agreement with the IRS to: 

• Identify U.S. accounts; 
• Report certain information to the IRS regarding U.S. accounts; and 
• Withhold a 30% tax on certain payments to non-participating FFIs and account holders unwilling to provide the required information. 

Foreign institutions that don’t sign an agreement with the IRS face withholding on payments, including U.S. source interest and dividends, gross proceeds from the disposition of U.S. securities, and pass-through payments.

The regulations are sweeping and the penalties for non compliance by US banks are very punitive.

What is the likely end result of these regulations?

1. US banks will levy the tax on all foreign transfers because from their point of view it will be easier "to be safe than sorry"

2. Foreign banks will not want to open bank accounts for US citizens because of the new stringent  reporting requirements.

These regulations will be enacted into law on the 1st of July 2014 (IRS has now announced a delay on implementation until the 31st December 2013 and a subsequent delay to 1st of July 2014).

So if you plan to invest abroad, the likely end result after 1st of July 2014 is that the money you wish to use to purchase your dream Costa Rican home will be subject to an additional US tax or will be monitored closely.

Is there a solution? Well the answer is to act before the  1st of July 2014.(IRS has now announced a delay on implementation until the 1st of July 2014).

The law has not yet been enacted, if it does enact on the 1st (and no commentator is suggesting it will not) and you have taken action and placed your funds abroad, you're budget is intact. If the law does not enact and you decide not to invest abroad in real estate or other investment opportunities, you can bring your funds back into the US.

For those clients who have not yet decided on a home in Costa Rica and want to keep their investment options open, we have an excellent CD Eco Mortgage Investment offering 10.95% interest and a 1 year term. See more about it here.

This CD Eco Mortgage Investment can also be combined with a residency application and you can read more about that here

You can download the HIRE act here. Page 27 is the section referring to Foreign Account Tax Compliance. Alternately a google search on the Hire act and currency control will give lots of views on this new law.

Avoid this significant reduction in your investment budget and take action now, avail of our Eco Mortgage or contact us on our website or by e mail at info@costaricainvest.ie or by phone on

USA +1-866-990-1123 (toll free) or Europe +353-1-272-4184 and we can discuss solutions specific to your needs.

Strong Turnout of Sea Turtles on Guanacaste Beaches

Sea turtles are arriving at many Guanacaste beaches to lay eggs almost every night this rain season in large numbers. One beach seeing a great turnout is Ostiona, on the Nicoya Peninsula, although many beaches have been reporting strong turnouts.

Occur every month in the rain season, being driven by the phases of the moon, especially in the waning phase the nesting sea turtles arrive night, although but often they will begin to arrive in the afternoon, stay overnight to complete their nesting rituals. On average the pacific Costa Rica can see as many as 500,000 turtles arriving to nest and lay on average 100 eggs per turtle.

The Pacific side of Costa Rica is visited by 4 species of sea turtles; Hawsbill Sea Turtle (Tortuga Carey), Olive Ridely sea Turtle (Tortuga Lora), Leatherback Sea Turtle (Tortuga Baula), and the Pacific Green Sea Turtle (Tortuga Tora).

Costa Rica sea turtle volunteer programs have also seen an upsurge in participants in the past few years. Because of this, Costa Rica eco tourism with sea turtles has been booming and Costa Rica has become one of the best locations in Central America to observe and work with sea turtle.

Read the full story on the The Costa Rica News (TCRN)

Costa Rican Wildlife

Morpho

Sloth

Toucan

 

 

 

 

Humming Birds in Costa Rica

 

 

Costa Rica tourist numbers up 7.4% for the first half of 2012

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San Jose – Costa Rica continues to be one of the preferred destinations for tourists in Latin America.

 

Reports provided by the Directorate General of Immigration (DGME) and analyzed by the Costa Rican Tourism Institute (ICT) indicate that Costa Rica received 1,285,599 international visitors during the first six months of the year, which represents an increase of 7, 4% over the same period in 2011. 

The airports report the largest number of arrivals (70%). A total of 856,672 international visitors arrived by air, 50,021 more arrivals in comparison with last year. This number represents a growth of 6, 2%.

Juan Santamaria Airport , San Jose

Juan Santamaria International Airport had 655,530 arrivals, while Daniel Oduber International Airport in Liberia received 198,913 arrivals, an increase of 26% in comparison with 2011.

The majority of visitors came from the United States, Canada, and Mexico.

For Allan Flores, Minister of Tourism, the rise in arrivals by air reflects the hard work that has been done to attract new airlines and increase the frequency of flights, which has resulted in an increase in the number of seats available to our country.

The ICT has an information system that allows the monitoring of several indicators of the tourism sector, many of which are available on its website. This system indicates the number of international arrivals by air, sea, and land during a given period, which is obtained from the data provided by the DGME.
According to Flores, this is a general indicator endorsed and recommended by the World Tourism Organization (UNWTO), which measures the level of growth or decline in tourism for a country as a whole. The purpose is to establish an objective measurement of the tourism activity in Costa Rica, as well as make comparisons with other regions.

In addition, the ICT provides classified information about tourists such as nationality, reasons for traveling, lodging, expenses, and other activities, which is gathered through surveys given to travelers in all different ports of the country.

This information helps entrepreneurs, researchers, and experts prepare market studies.

Read the full story in The Costa Rica News (TCRN)San Jose Costa Rica

Farmville in NatureWalk

New Office opens in San Jose

We have opened a new office in San Jose specifically to faciltate property purchases in San Jose and the central valley.

Located in  Guachipelin de Escazu, San Jose, Costa Rica the bilingual staff are on hand to assist with every aspect of property purchase in San Jose and the Central Valley.

The office can be contacted directly at:

COSTA RICA REAL ESTATE GROUP

Guachipelin de Escazu, San Jose, Costa Rica

email: infocostaricagroup@gmail.com

Direct Costa Rica: 506-6058-8110

US & Canada Toll Free  866-989-2226