International Buyers Guide
South Florida is a leader in luxury residential properties and real estate investments, including luxury condominiums, waterfront homes and income producing properties. South Florida continues to offer good value, particularly when compared to cities like New York and Los Angeles. Purchasing property is far less complicated here than it is elsewhere in the world, and real estate laws in Florida are specifically designed to protect the buyer. However, it is important for foreign nationals to understand how the process of buying real estate works.
Real estate transactions in Florida are highly transparent. A new listing for sale is required to be posted in the listing service within 48 hours so we have access to every listing in South Florida and can help you purchase any one of them.
Real estate sales commission is always paid by the seller, so buyers do not pay anything to have a buyer’s agent working on their behalf.
Financing is available for qualified foreign buyers with an appropriate down payment, often 30-40% in Miami. We have a network of bank or mortgage brokers, which will allow youto obtain the best financing to meet your needs.
Buyer does not have to be present at closing
If the buyer is outside of the USA at the time of the closing of the transaction, he/she may appoint a representative using a ‘Power of Attorney’, giving that person the authority to close the deal on their behalf.
Matters of Tax Liability
All foreign investors should consider methods that offer an alternative toor deferral of tax on real estate investments
- Using a 1031 Exchange: By using this exchange, investors are able to defer
capital gains tax by investing 100% of their equity from the sale of an investment property into the purchase of a replacement property. This exchange can be conducted on a simultaneous basis or through a delayed exchange.
- Income tax: If your home is for personal use, you will not pay income tax.
However, if the property is being leased, then you must ‘elect’ to pay US income tax on the rental income less the operating expenses such as
association or maintenance fees, real estate taxes, property management
fees and depreciation. Even if the foreign investor is incurring tax losses during the early years of the investment and does not owe taxes, a tax return must still be filed in a timely manner.
US Estate Tax: When a foreign buyer dies, his or her estate in the USA may be subject to estate tax. There are alternatives to paying this tax and we work closely with various attorney’s in the South Florida area who specialize in international tax law and are able to offer a solution to taxation issues facing foreign nationals.