Economic understanding is not rocket science and financial jargon is not a code understandable by the best Chartered Accountants, specialised Tax Accountants and those said be “enlightened”. In this post I will try to provide answers to frequently asked questions about the current economic situation and about the new economic and financial concepts commonly referred to in the media.
The concept of debt associated with the concept of budget deficit. Indeed, it is partly due to budget deficits that there is public debt. Imagine the case of a state in a given year, spend 140 monetary units, but only 100 units receives in taxes. On balance, end of year, there is a deficit of 40 units that someone will have to pay. To accommodate these sufficient revenues, the state resorted to credit through the issuance of debt securities designated by government bonds. In practice, what the state does is borrow money in exchange for periodic payment of an interest rate to maturity of the loan, when it will also return the borrowed money. It’s a slightly different credits granted to private mechanics, but translates the same: a debt. Only in this case is this public because it was the state that contracted. In practice, it can be said that public debt is all the money the state owes to others.
It’s not necessarily bad that the State debts. The credit is a source of economic growth if it is prudently managed. Otherwise, let’s see: to finance the deficit, the state issues debt to 10 years, for example, and even there only pay interest. If the economy grows at a faster rate paid on the loan, this country will have trouble paying its debt. However, in a country already in debt and weak economic growth, interest costs can undermine economic growth and debt repayment. It was feared that the investors in relation to the US, when they found the country’s debt had risen steeply in the last decade due to systematic budget deficits, and the economy only had grown less than 1% per year. Many would have stopped lending money to the country and others have demanded unaffordable interest rates for fear that America might not generate income to repay the debt, and the country had to request financial aid to avoid bankruptcy.
The external debt is the sum of all debts of the country abroad whether the State, public and private companies and individuals. External debt is usually measured in terms of Gross Domestic Product (GDP) national. To provide an example, Portugal had in late December 2010 gross external debt of about 229% of GDP, amounting to EUR 396 billion. It is important to note that currently most developed countries have a very high external debt. This is due to the massive flow of funds between countries. If we measure the net value of external debt now to obtain lower percentages of GDP, representing about 104% of GDP. Overall, despite the national banks and companies that have debts abroad, there are also foreign banks who owe a lot of money to national authorities companies. Joining these values the transfer of profits and dividends from foreign investment in Portugal, which have to increase the value of external debt, we find that capital flows can not be analyzed unilaterally from a country abroad, but always bilaterally.
The value of public debt is measured as a percentage of GDP.
Is It A Good Deal To Invest In The US?
Foreign Property Investors go shopping for real estate in Florida, but many fail to evaluate both American and local tax in their own Country, and taxes can represent almost half the value of the property.
The strong combination and real estate even with low prices has led many Foreign Investors to buy a house or apartment in the United States. The most popular destination is Florida, with preference over Miami and Miami Beach. The problem is that many are buying property abroad without assessing the tax impliations. If the purchase is made on behalf of an individual, for example, in case of death, inheritance tax and other taxes can reach almost half the value of the property.
The figures show that Brazilians are among the biggest foreign buyers of real estate in Florida, behind only the investors in Canada. Dadosda National Association of Realtors (NAR) show that Brazilians made in August this year 8% of international buyers in the region. And, according to the NAR, it is estimated that 55% to 60% of properties are sold today in Miami for foreigners, mainly in Brazil.
Many people even choose to sell their vacation homes in Brazil and seek another in Miami. But few noted that, according to U.S. law, the tax on the transfer of a property to an heir can reach up to 47% of the market value of it. What’s worse, this succession tax should rise to 55% in 2014.
So many foreign investors have sought to undertake the acquisition on behalf of a legal person. The person opens an overseas company, preferably in a tax haven, because it’s cheaper – and then assembles a U.S. company. And this is empresaamericana would buy the property. As a company dies, no succession taxes, explains Samir Choaib, partner at Choaib Paiva and Fair Association.
More, that means opening a company abroad for the purchase of property is always the beneficial? Not necessarily, says the lawyer. If the goal of the person is buying the property for short-term gains, ie, then resell at a higher price, the acquisition as an individual is most recommended.This is because the capital gains tax in the United States is generally 15% value can be compensated in say Brazil. ” But if this is an option, one should avoid making a secure living abroad to the heir charged the succession if a fatal accident with property owner to occur,” says Cohaib.
And how is the time to make statement and income tax (IR)? For example: the individual buys a property worth $ 1 million, and that day, the dollar was at U.S. $ 1.80. Then one should put the statement in the property purchased in the amount of R $ 1.8 million, which is $ 1 million,” And should not change more; if the person getting the property five years, she will repeat this information in income tax for five years,” says Choaib. ” When she sells the property should collect 15% of IR in the United States and in Brazil too, more because of the settlement it will not pay anything over here”
As for non US residents who do not intend to sell the property soon, and want to leave their children or even intends to rent it, the best way really is to acquire legal entity. In this case the taxpayer must declare only company that has the time to make a declaration of income tax. If, later, the home is sold, the IR in the U.S. paid on the capital gain will be 15% to 35% depending on the type of corporate American company.
Most investors outside of the US who purchase a property in Florida are looking for two bedroom apartments facing the Miami Beach. ‘Today it pays on average £ 7500 per square meter in the new apartments, while previously paid up to $ 15 thousand to U.S. $ 20 billion.
Even for those who buy a property in order to rent and earn extra income, you need to be very careful, because the investor can end up frustrated. Unlike what happens in Brazil, to rent an apartment, pay the condo is not the tenant’s responsibility and, yes, the owner, as well as taxes and other charges, says the executive.
According to Vasconcellos an apartment in Miami Beach is now rented for $ 1600 on average for an average of $ 1mil condo. The owner then must try to do also a liability insurance. That’s because if a leak in your apartment wet a piece of art neighbor, the person will be covered. Hence, paying the condo, insurance and taxes, spare $ 200 or $ 300 for the owner. ” Far from the hype, however, it is possible to profit a little more,” he says.
In addition to analyzing all these variables, the Brazilians have to be alert to the fact that, besides the traditional declaration of income tax, you must also do the Declaration of Brazilian Capital Abroad at the Central Bank (BC). The obligation must be taken by all individuals or legal entities resident in the country that have assets equal to or exceeding U.S. $ 100,000 abroad on December 31 last year.
Are We In Another Real Estate Bubble?
One of the basic principles and considerably popularly known economics says that to make a good deal, it is essential to take advantage of the times to buy low and sell high moments. Buy cheap and sell dear is synonymous with profit and intelligence is a concept that is ingrained in our culture, even though we have an effective financial education in schools. It is an almost empirical knowledge, passing from generation to generation.
REAL ESTATE BUBBLE
People are still buying properties, submitting to exorbitant prices and surreal But when we think very carefully and rationality in the current situation of the American real estate market, we can conclude that this principle has been taken seriously, as ever, by those who have property to sell. Who’s decided to buy a property (right now, with prices at the top!) Is making a big financial mistake and certainly ignoring the rule properly hammered in popular speech. See arguments against the existence of a housing bubble. People buy and keep buying properties without much reflection, patience and without submitting to exorbitant prices and surreal. Where to come? Eager to have the dream home, to get rid of rent or even make a good investment, American consumers lost out and purchase with a fixed idea of what your property continue to appreciate significantly over time. Will not! It may seem pessimistic, but the story itself tire of pointing out the examples of bubbles and how not to be an employee (and, later, victim) of them. Who does not remember the U.S. housing crisis in 2007 and 2008, which made the world economy swayed and whose recovery was not due to complete until today? Another classic of speculative market occurred in 1634, according to reports of the “tulip mania” in the Netherlands. At the time, the country received outsiders who heated the tulip market in an overwhelming way. Although the average wage to reach a maximum of 400 guilders a year, a bulb could be sold to six thousand guilders! Everyone wanted to sell tulips. However, amazingly, only three years after the market broke these flowers after a widespread panic, whose causes are unknown, consumers. As fragile growth as the product itself marketed. Both in the case of Dutch tulips as in the examples of the American and Australian property markets, the feet of consumers distanced themselves from reality. If inflation reaches unacceptable levels for the population, monetary policy is reversed and long-term investments crumble, especially real estate.
Who is considering buying a property must stop and think seriously that homeowners today are not a good investment The cycle always starts with low interest rates in excess, buildings galore, loans, increasing demand for housing, explosion in prices and in the end, a speculative market. Investors rediscover easy to earn lots of money mechanism: buy and resell properties in the plant. But absolutely magical moment ephemeral, lasting only until the day when interest rates go up, profits disappear entrepreneurs, builders suffer the blow, prices plummet, speculators bemoan the low and the whole society ends up feeling the effects of the economic crisis installed. Who is considering buying a property must stop and think seriously that homeowners today are not a good investment and that there are no financial efficiency and guaranteed to be a purchase from the housing market profits today. Apply the money in more profitable mechanisms and greater liquidity. Save. Have discipline. Keep your patience. As popular wisdom: who does not wait, eat raw. Otherwise you may find yourself a client of one of the many sell my house fast today Companies that have sprung up all over the Internet, such as http://www.cashpropertysolutions.co.uk in the UK.
Ready to buy or sell property without real estate agents hammering your back for commission fees? Allow Property Purchasers help you out.
Buying or selling property is a struggle that anyone should experience sooner or later in their existence. Although the purchasing aspect is not as bad as it looks because one look at the property can help you make your mind up, the marketing aspect includes its fair share of issues. Sure, you could have a wide array of options to choose from with the most prevalent option being a visit to your real estate professional, but the broad range of alternatives may make you job even more complicated.
Brokers are known to be the most in-demand choice in terms of buying or selling on a property. Nonetheless, it’s the advertising aspect that many worry might end up a deal breaker, particularly if you are trying to sell the property fast. Sure, you may be able to get an excellent value for the property you own, nonetheless it may come on the cost of waiting for months or even longer for the ideal offer to turn up. Dependent upon one’s finances, it might or may not be possible to hold on to the property for that long – like in the case of a financial disaster for instance. Such real estate related problems are now being blogged about continuously.
One additional big downside of relying on an estate agent to see the job done is the quantity of fee you’ll be indebted to pay. This is usually a specific percent of the sales price, or it could be an amount decided upon mutually before the property goes up for sale. Quite simply, you won’t just have to wait for a very long time until the estate broker manages to get a client that makes an acceptable offer, however, you may also need to pay a hefty amount to your pals at the estate brokers! Furthermore, this brings into consideration a substantial amount of uncertainty. Not only do you not necessarily know how much you’ll be able to sell your property for, but you also have no idea of whether it’s likely to sell fast or otherwise not!
The good news is you will find a solution made to help save the common man from the wrath of the real estate business. This is where online property buyerscome in to play an important role. These purchasers possess the power to buy any piece of land or property in a surprisingly short span of time and that to at very affordable costs. This means that, if you were hunting for a strategy to sell your house fast consider yourself lucky. All you need to accomplish this is fill out a basic form on the site, and you’ll have a response back with an offer in just a few days. Likewise, there won’t be any expensive fees or unneeded forms involved as with the situation of real estate transactions, and the entire method will likely be designed as transparent as possible. Not only can you do a quick house sale with this particular method, however, you also get to keep any commissions you’d decided to part with. So a win-win situation all round.
In today’s economy, nothing is particular. One minute, you have a roofing over your head, the next second you discover yourself out in the streets because you couldn’t settle your home loan financial obligation. This is a terrible scenario that many regrettable people have fallen victim into over the recent years. If you find yourself in this circumstance, there is one point you can do: leasing spaces to create cash flow to eliminate foreclosure.
There comes a time when you discover yourself in so much home mortgage financial obligation, that your month-to-month income is barely enough to cover your regular monthly costs. One means to generate earnings is to lease out a room. Prior to you go out and rent out that space, there are a couple of things that you require to take into account.
Decide which space to rent
Once you have decided to decrease the path of renting spaces to create cash flow to combat foreclosure path, you need to decide which space you would desire to lease out. A lot of people who rent out rooms would lease the extra and unused rooms in the hold. If you have no requirement of these rooms, since you aren’t expecting any guests, or your youngsters have vacated our home for great, then you have the flexibility to have these spaces rented.
Do whatever repairs you require
Prior to leasing out a space, do a physical check of said rooms. Does the ceiling leak in that room? Is the plumbing ok? Take needed measures into making the spaces for lease as comfortable and nice as you can for your would-be-tenant.
Make a set of goals
As soon as you have made the required repair works, take a seat and produce yourself a list of goals. Choose the amount of you would desire to have the space rented that would cover the energy bills, upkeep, and naturally, the monthly balance that you require to settling your debt.
Get all set to be a “maintenance guy”.
As soon as you have your occupants settled in, you have to make yourself all set to become some type of a maintenance personnel right in your own house. There will definitely be grievances about the space below and there, so you will need to go well beyond the line of duty in order to keep your renters delighted. You will be plunging toilets, and even plastering the leaky ceiling. When it comes to leasing rooms to produce money flow to combat foreclosure, you need to bear in mind that you have to do anything you can to keep your boarders happy.
Settling one’s debt can be a laborious and long task. It can be exhausting in lots of aspects, but it need not be draining. When you have a stable flow of income, such as renting spaces to create cash flow to combat foreclosure, you can work towards paying your debt and keep your pleased home safe for several years to come.
Once you have actually decided to go down the course of renting spaces to create money flow to combat foreclosure course, you have to choose which room you would want to rent out. Most people who lease out rooms would rent out the extra and unused bedrooms in the hold. If you have no requirement of these rooms, because you aren’t pregnanting any visitors, or your kids have actually moved out of the house for good, then you have the liberty to have these spaces rented out.
Before leasing out a room, do a physical check of said spaces. When you have a steady flow of earnings, such as leasing rooms to generate money flow to combat foreclosure, you can work towards paying your financial obligation and keep your happy house safe for years to come.