In an investigation by The Seattle Times
, figures from King County assessor records showed that the number of single-family properties and attached homes in the city purchased by or through a limited liability corporation (LLC) has increased by over threefold in the past 14 years, up to 10,425.
“[These are] people buying homes for investment purposes,” Seattle-based real estate attorney John Hempelmann said.
The lawyer estimated that fully 90 per cent of LLC-owned homes in the city were bought for investment reasons.
“It doesn’t matter what country you’re from, if you are even a slightly sophisticated investor in single-family homes, you’ll buy it with an LLC,” Hempelmann stated. “There’s no question that for the last decade or more, Seattle has been seen as a very good place to invest, in part because the economy here is so vibrant, and the job growth is so strong.”
Assessor records noted that the average value of these properties as of 2015 sat at $560,000. Seattle experienced the most dramatic increase in LLC ownership in 2015, with over 800 new LLC-procured compared to the previous year.
LLC-mediated purchases are a potent tax-evasion mechanism, Hempelmann said, with the caveat that one has to pay fully in cash, as banks won’t underwrite loans for such purposes.
According to a recent report from international real estate portal Juwai.com, Seattle outstripped Canadian powerhouses like Vancouver and Toronto as the top choice in North America for inquiries from Chinese buyers, with property searches in August rising by 143 per cent compared to the same time last year.
“Right now, Seattle is the number-one city in North America for Chinese buyer enquiries, even displacing Los Angeles,” the Juwai report said.
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While the growth of Vancouver and Toronto prices in the fast few years has defied description, a long-running phenomenon in Seattle should at least make Canadians thankful that they do not reside in the most vibrant housing market in the United States.