How Can Foreigners Invest in Miami – a Guide for Florida Investment

Florida real estate has always been attractive to foreign buyers. Luckily, the state has always held opportunities for investing in properties, especially to invest in Miami luxury real estate.

Come to think of it, real estate in this state was attractive even before the housing crash that depressed prices for both residential and commercial properties. This made foreign investment in Florida a bargain for many buyers.

This is why our luxury real estate agents are awaiting your call!

According to the National Association of Realtors, Florida has the largest number of foreign investors in the field in the country, with 41% purchasing vacation homes, 25% making a dual use purchase and 23% are investing in rentals.

Although, investing in Miami real estate is popular and widely known, there are still a few things investors should keep in mind. For starters, foreign nationals are able to purchase real estate in the country for personal use, on their own or in the name of a corporation or LLC, without any governmental agency’s involvement.

Foreign investors are also entitled to defer capital gains taxes in the country by purchasing another investment property under Section 1031 of the IRS Code. However, the actual tax treatment may depend on tax treaties between the United States and the investors home countries, if such treaties exist. This can be a rather complicated area, which is why it is advisable for investors to consult with Florida professional real estate agents on the subject before making a purchase or opt for an investment.

Investment in Private Property

If you opt to invest in property, foreign nationals who purchase large tracts of real estate in the U.S. must report that purchase to the U. S. Department of Commerce under the International Investment and Trade in Services Survey Act. The reported information must include the names and addresses of buyers, sellers and owners of more than a 50% interest, and financing information like income or expenses and similar info about the property itself. More reporting details are needed for property over 200 acres or property with a purchase price of more than 1 million dollars.  

Investment in Rental Property

When it comes to rental property, foreign nationals purchasing Florida real estate for leasing purposes are subject to taxation on rental income. However, foreign landlords have two choices on how to be taxed. The first option is to pay 30 percent of gross rental receipts, or they can pay regular U. S. income tax rates on net income from the property by filing a Form 4224 with the IRS.

Other Requirements Concerning The Subject

The state of Florida has certain filing requirements for foreign nationals and legal entities purchasing real estate. Any property which is owned by a foreign business entity or U. S. corporation whose ownership by foreign nationals exceeds 10% must have a registered office in the state and an agent on file with the Florida Department of State.

If the sales tax on rents is collected, a foreign national must register as a sales tax dealer with the Florida Department of Revenue.

As you can see, investing in Miami might be a bit confusing, but nothing out of the ordinary procedures from similar matters. If you have any more questions, contact us!