ON FEB. 15, NVAR’s Hispanic Forum hosted a panel of experts to discuss Temporary Protected Status (TPS), the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA), and property rights of foreign clients.

Sara Rodriguez, NVAR’s Hispanic Forum chair and manager of the Arlington Ekko Title office, moderated the standing-room-only event, part of NVAR’s ongoing initiative to serve our members’ and our region’s global business interests.

THE EFFECTS OF A DIMINISHED TPS

Following the Trump administration’s announcement of an end to TPS for immigrants who now live in the U.S., Realtors® may see an impact on their local clients and communities.

TPS is a program which allows immigrants to live and work legally in the United States to escape unsafe circumstances, such as natural disaster or war, in their home countries. When a country’s TPS status expires, people living in the U.S. under that protection could risk deportation.

“Eighty percent of my clients are calling me saying, ‘I want to move. I don’t want immigration to know my address. What can I do?’” said panelist Cristine Sanchez-Cañete, principal broker at Union Realty.

Sanchez-Cañete said it is important for Realtors® to tell clients that there are options in these situations. They do not need to abandon their home, which could cause foreclosures and upheaval in the current market.

“These people are scared,” she said. “There will be agents that take advantage of this; it’s already happening. What we need to do is be a community, and that’s why we’re all here – to do the right thing.”

FIRPTA AND YOUR CLIENT’S TAX STATUS

Current U.S. income tax law states that if you are a foreign person selling a U.S. property, a percentage of the sales price (10 or 15 percent, depending on the sales price) will be withheld for taxes.

However, what qualifies someone as a “foreign person” for immigration purposes is not the same as what designates someone as “foreign” for tax purposes, according to panelist Irene Gonzalez, an enrolled agent at Tax Advise & Consulting.

“Just because you [the client] are undocumented, doesn’t mean you fall under FIRPTA,” Gonzalez said. “You must talk to a tax accountant to figure out if you fall under it or not.”

Rodriguez further explained that whether someone is a citizen of El Salvador or whether someone is a citizen of the U.S., his or her property rights are exactly the same. The only aspect that is different are the potential tax consequences when property is sold.

HOW TO HELP INTERNATIONAL CLIENTS

“Number one: when you get that phone call, you should assure your client that there is no problem with [the client] selling their home,” Jon Lyon, panelist, attorney with Leggett, Simon, Freemyers, & Lyon and manager of the Reston Ekko Title office, said. “You can sell it today; you can sell it tomorrow; you can sell it a year from now; you can sell it if you’re in the country; you can sell it when you’re out of the country. It’s just a matter of planning.”

Lyon discussed the various options clients have if they can’t return to the U.S.: grant power of attorney for someone to act on their behalf, sign the paperwork at a valid notary, transfer the deed, or set up a trust.

However, Lyon also emphasized that there are pros and cons associated with every option, and it is important to provide clients with resources so that they can make an informed decision.

“Your clients may not have the wherewithal to hire an accountant or attorney who can give them their answers in tough spots,” Lyon said. “But each one of you should form an alliance with an attorney and an accountant that you can count on to help your clients.”

All panelists agreed that each case is different, and tax and immigration laws are complex and always changing. Therefore, it is important to provide tools for clients, so they can determine if and how they want to sell or buy.

“There will always be sales,” Sanchez-Cañete said. “We just have to do it the right way. We want to support the community; we don’t want to take advantage of them.”

To watch a complete video of this event, visit NVAR’s Facebook page at facebook.com/nvar.realestate.