Investing through the investment pool gives investors in tax liens the opportunity to invest without (most of) the US bureaucracy and legal restrictions and also to gain initial experience in the area of tax liens with smaller amounts (from around USD 25,000). .

As an investor in a pool, shares (preferred shares without voting rights) are subscribed to in a privately held US corporation, which then uses this share capital to make the desired investments.

If the tax liens are then serviced by the debtor, the shares are bought back and the yield achieved is paid out in the form of a dividend. Different payment options are possible individually depending on the situation of the respective investor.

Fees apply for use of the pool:

US capital gains tax is payable on interest income on a US corporation basis. At the time of publication of this document, this is 21%. The tax rate in the year in which the profits are realized is relevant for taxation.

For the management of the investments and the operation of the investment pool, a flat fee of 10% of the earned interest is charged.

Any fees incurred for deposits and withdrawals of capital shall also be borne by the investor and costs for the initiation and implementation of foreclosure auctions will be charged to the investor at cost price plus a service fee of 5% of the auction value.

Example of calculating profits:

$25,000 invested with 12% interest

= $3,000 interest income

10% operating fee: $300
21% Capital Gains Tax on $3,000: $630
Revenue Before Private Taxes and Wire Transfer Fees: $2,070. (Net return of 8.28%)

US withholding taxes may apply based on the investor’s residency. The exact amount can be found in the respective double taxation agreement.

This calculation serves as an example only. The specific and complete conditions of participation in a potential investment depend on the country of residence and the offer adapted for this country. More details in our financial disclaimer