alt Hacker NewsThe idea is that tracking it is effectively impossible for a foreign government...and we've made that whole infrastructure incredibly easy via making it legal for LLCs to purchase homes. We don't prevent foreigners from forming LLCs, and often times there are brokers that make their vig on doing just that for wealthy foreigners - they set up a myriad of LLCs to protect the identity of a buyer, who then drops $1mm+ on a property that they will never actually use in a country they will likely never visit.
Plus, to buy stocks or ETFs or bonds or whatever, you have to register with a broker, who has to legally report each sale and transaction to the government. The point isn't the liquidity. The point is that a family can drop 200k-500k in a pretty stable asset in an incredibly less volatile environment and effectively not report it. That is worth it in the age of hyperinflation in LatAm economies. Plus, if the unit in question is in a decent location, they can escape at the first sign of trouble.
That LLC is going to have to pay property taxes or the sheriff will seize and auction off the property. And there won't be a mortgage or homestead exemption so they will be at the top tax rate. They'll probably want insurance on that property, which is more expensive for an investment property especially if it's sitting vacant, and they'll need to have electric and gas hooked up and paid so it can be temperature controlled. It will need lawn and landscaping care during the summer, and snow removal during the winter. If it's a condo then they'll need to pay association dues instead. All together that's easily well into 5 figures a year, every year, on a 200k-500k house.
They can offset this and maybe even get some cash flow by hiring a management company to rent it out, but then it's not sitting vacant, which was the original complaint.