Self-Directed IRA to Invest in Property in Belize
Investing in property abroad is an increasingly popular way to diversify your retirement portfolio. However, many investors are unsure whether they can use their self-directed IRA to purchase Belize real estate. The good news is that the IRS allows individuals to buy real estate (commercial, residential, or raw land) within and outside the United States using their IRA funds. However, it is important to work with a qualified custodian to ensure that the transaction follows all applicable rules.
Belize’s burgeoning tourism industry is one of the most attractive reasons to Investment Property Belize in the country. Its growing economy makes it ideal for generating rental income, and the increasing number of visitors also means that property prices will continue to rise.
The country also offers a favorable tax environment for foreign investors. In addition to a low property tax rate of 1% to 1.5%, Belize does not levy any capital gains taxes on the sale of real estate. As a result, it’s possible for IRA owners to avoid paying taxes on any appreciation of their investment property in Belize.
Can I Use a Self-Directed IRA to Invest in Property in Belize?
While every investor has a different reason for investing in Belize, some of the most common reasons include wanting to own a tropical getaway, taking advantage of a booming tourism industry, and generating a high return on investment from their rental properties. For these reasons, investment property Belize is a great choice for those looking to take control of their own retirement future.
One of the main ways that individuals invest in property in Belize is by using their self-directed IRA accounts. These accounts are similar to 401Ks, and they allow investors to invest in assets such as stocks, mutual funds, and real estate. However, unlike traditional IRAs that are managed by a brokerage firm, self-directed IRAs give investors the freedom to invest in the investments of their choosing.
In order to make a Belize real estate investment using your self-directed IRA, you will need to establish an offshore LLC that is owned by your retirement account. This will help you avoid unrelated business taxable income (UBTI) and reduce fees. Then, you can buy the property in Belize with your IRA funds and have it held by the LLC for rental purposes.
Debra and Tim rolled over their traditional IRA into a checkbook IRA and used it to buy two adjacent pieces of land in Placencia, Belize, a destination they had first visited and fallen in love with on a sailing trip in 2009. They plan to build a simple vacation home on one piece of land and rent the other until they retire. This strategy lets them avoid paying taxes on their rental profits and capital gains, and it also allows them to enjoy the beauty of Belize without worrying about having to maintain the property themselves. Moreover, they can hire a local property manager to handle the day-to-day operations and maintenance.
