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That's not how it works. Refinancing a mortgage doesn't trigger capital gains tax. Capital gains tax applies when you sell an asset, like a house. While curr
by panarky 2y ago
That's not how it works.
Refinancing a mortgage doesn't trigger capital gains tax.
Capital gains tax applies when you sell an asset, like a house.
While currency fluctuations do play a role, you calculate the gain or loss at the time of sale, not when refinancing. You'd compare the USD value of your purchase price to the USD value of your selling price.
- blud0t 2y agoActually, that is exactly how it works: https://pjdtax.co.uk/updates/foreign-mortgage-gain https://pjdtax.co.uk/updates/foreign-mortgage-gain
- loeg 2y agoSeems like it would be wise for Americans living abroad to get USD-termed mortgages ("Foreign Currency Mortgage" as far as the UK lender is concerned).
- panarky 2y agoYes, you're right, gains in USD terms when refinancing a mortgage denominated in another currency are taxable. Interestingly, such gains aren't taxable at the (usually lower) capital gains tax rate, but they're taxable at the (usually higher) regular income tax rate.