Taxes in USA
Taxes in the USA are among the highest in the world. Prior to purchasing real estate, buyers should seek advice from a tax expert who can recommend the best way to register property and minimize tax burden.
Transaction and registration taxes
A recording fee is charged for the registration of property
Ownership taxes
Property tax is paid to the district court every year. It is 1% of the estimated property value on average but the total sum varies from state to state. In California, it costs $2,839 per year and $6,579 in New Jersey, the highest in the States. Louisiana has the lowest at $243.
| Rate, % |
Average sum, USD |
|
|---|---|---|
| Arizona | 0.72 | 1,356 |
| Hawaii | 0.26 | 1,324 |
| California | 0.74 | 2,839 |
| New Jersey | 1.89 | 6,579 |
| New Your | 1.23 | 3,755 |
| Texas | 1.81 | 2,275 |
| Florida | 0.97 | 1,773 |
Capital gains, estate and gift taxes
Capital gains tax is 20% on the sale of property. The seller also pays a real estate transfer tax (RETT) of 1% of the transaction value for properties not exceeding $500,000 and 1.425% for those over $500,000.
Estate and gift taxes depend on the degree of relation and vary from 18% to 40%. Property transferred between spouses who are US citizens or from a foreign citizen to their US spouse is exempt. However, the tax is payable if a US citizen passes or donates property to their spouse, who is not a US citizen.
Income and corporate taxes
Income tax ranges from 10% to 39.6%. The tax rates vary depending on the taxpayer’s marital situation, family income, dependents and married couples filing separate tax returns.
Corporate tax
| Taxable income, USD | Tax calculation |
|---|---|
| Under 9,225 | 10% |
| 9,226–37,450 | $922.50 + 15% of amount exceeding $9,225 |
| 37,451–90,750 | $5,146.25 + 25% of amount exceeding $37,450 |
| 90,751–189,300 | $18,481.25 + 28% of amount exceeding $90,750 |
| 189,301–411,500 | $46,075.25 + 33% of amount exceeding $189,300 |
| 411,501–413,200 | $119,401.25 + 35% of amount exceeding $411,500 |
| Over 413,200 | $119,996.25 + 39.6% of amount exceeding $413,200 |
| Taxable income, USD | Tax calculation |
|---|---|
| Under 18,450 | 10% |
| 18,451–74,900 | $1,845 + 15% of amount exceeding $18,450 |
| 74,901–151,200 | $10,312.50 + 25% of amount exceeding $74,900 |
| 151,201–230,450 | $29,387.50 + 28% of amount exceeding $151,200 |
| 230,451–411,500 | $51,577.50 + 33% of amount exceeding $230,450 |
| 411,501–464,850 | $111,324 + 35% of amount exceeding $411,500 |
| Over 464,850 | $129,966.50 + 39,6% of amount exceeding $464,850 |
Disclaimer: the information in the above article is for reference and may be subject to change over time. Persons interested in exact calculations should contact a certified tax specialist in this country before purchasing property.
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