International real estate: Residence, tax and inheritance law.
International real estate acquisition and cross border commercial activities are certainly an increasing trend and have become the norm for many Lebanese nationals and expats who own or intend to purchase real estate abroad whether for investment purposes, vacation homes, foreign Citizenship through real estate acquisition, new work domicile, immigration etc.
These cross border real estate acquisitions raise many legal concerns and oftentimes entail unintended legal consequences especially in terms of tax and inheritance law.
Every country has a different and nuanced legal framework in terms of tax, inheritance, sale and purchase agreements and therefore each international transaction should be conducted only after giving particular attention to local laws and international private law.
Many legal frameworks in different countries mandate the application of local law to any real estate located within national territory, this applies to inheritance law regardless of the place of domicile and residence. This may lead to the application of different laws to the same Estate. Movable and immovable assets are in many instances subject to different applicable laws. These concerns and complications may be avoided through the use of appropriate company structures whereby the company shares would be considered as movable assets despite the fact that the company itself would own the immovable assets.
Other means of succession planning may include family foundations and trusts.
In terms of Taxation, in principle local tax laws and local taxation apply in international law whereby the real estate is taxed in its location. However double taxation may be incurred in the event of absence of taxation treaties, in addition to annual recurring tax charges.
Finally, the change of the place of residence or domicile could also have significant implications in terms of tax and inheritance. When considering to live regularly for three or more months a year abroad, you should be carefully considering the implications in terms of legal domicile and tax residence.
This post is not intended as legal advice and can in no way substitute legal advice.