Buying or selling a home involves a lot of things, it also raises questions. In this column ‘Ask Bob’, real estate expert/broker Bob Bartikoski of RE/MAX Paradise Homes Bonaire answers a real estate question from a reader. This time:
Question: I am thinking of buying a property on Bonaire through a LLC in the US, or in my living trust. Is that a good idea?
Property buyers are free to buy in their personal name, in a living Trust, LLC or in a Dutch company (BV/NV). Buyers should talk with their tax advisor ahead of time to determine which ownership structure is best for them. All of these ownership methods benefit from the fact that there are no local taxes on rental income or “capital gains” when you sell the property for a profit.
One thing to keep in mind is that the local property tax rates can be different if you are buying a house that you plan to live in, and you are planning to become a bonaire resident. If you are a resident and the property will be your primary residence then your property will be subject to grondbelasting, which is taxed at the lower rate of 0.345%. If the property is owned by a company (BV/NV), Trust or LLC it will always be taxed at the Vastgoedbelasting rate which is 0.91% even if you are a resident of Bonaire and it is your primary residence.
On a $500,000 house, this is a difference of $2,875 per year, so it’s important to consider this when you buy.
Do you want to buy or sell a house in Bonaire, or do have a real estate question for Bob? email him at: [email protected]. Call for free from the US: 1-866-611-7362 or Bonaire: +599-717-7362. See all our listings here.