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Required Search Criteria
| Start Price |
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| End Price |
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| Property Type |
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| County |
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| Bedrooms |
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| Full Bath |
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Optional Search Criteria
| **Enter MLS numbers, separated by commas. Example: F12345,
F54321 |
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Buying Property
- Can non-US citizens buy
and own real estate in Florida?
Yes. Non-U.S.
residents and citizens can own real estate in Florida.
- Are there any
restrictions on how the money is funded?
No.
There are no restrictions on how the property purchase is funded, provided the
method doesn't break any laws.
- To whom should the
money transfer be made when purchasing real estate? Is it the owner of the
property, the bank or the real estate agent?
When you purchase real estate in Florida, you will transfer
money to what is called a closing attorney who will hold your money in escrow
until he or she has secured all documents on your behalf. The closing attorney
represents you and your interests. For real estate transactions in Florida, you
will be required to have a Florida-based closing attorney.
- When buying real estate
with a mortgage, who negotiates the conditions of the mortgage with the
mortgage company?
Your real estate agent can
recommend a mortgage company and can assist throughout the process of
negotiating with the mortgage company. It is always a good idea to get
pre-approved by a lender.
- What are the present
requirements for a non-US Citizen to secure a mortgage to purchase property in
the United States?
Although I'm not an expert
in this field, my recent experience is that lenders require that non-U.S.
buyers put down a greater percentage of the mortgage (30 - 50%). The lender
will also consider what type of property the buyer is trying to purchase when
determining the down payment requirements. Some lenders require a non-US
citizen to provide 50% of the total cost of the property up front, to set up an
automatic monthly mortgage payment through a US account, and to ensure that the
closing costs have been in a US bank account for 30 days before the
transaction.
- What paperwork must a
non-US Citizen complete in order to obtain approval for a mortgage in the
United States?
Although things are constantly
changing, most applications spell out the requirements and can be obtained
online or through a mortgage broker.
- Can companies purchase
real estate in Florida?
Yes
- Can non-U.S. companies
purchase real estate in Florida, or must the company be based in the United
States?
You would have to get a
recommendation from a tax professional, however it is usually recommended that
you form a U.S. subsidiary of an offshore company (BVI) -- this is driven by
estate tax concerns. Of course, the best course of action for each individual
or group of investors depends on your situation. The tax treatment can depend
on such variables as your home country, tax treaty, family succession
intentions, the age and health of the buyer, the marital situation and whether
or not funds are "declared" in home country.
Lenders typically require
that the borrowers be the main names involved in the corporation. If they were
to lend to a company, it would then be considered a commercial mortgage and may
change the status of the loan type. It would no longer be a residential
mortgage. The lender will put the purchase into the corporation’s name
after reviewing the corporation documents.
- Can a non-US citizen
establish a company in the United States for the purpose of purchasing property
in Florida? If so, how can a non-U.S. citizen establish a company in the United
States?
A European resident can form a U.S.
company. To do this they will need a U.S. tax identification number. This is a
service offered by specialized companies.
Selling Property
- If a non-US citizen
makes a profit when selling real estate, how will he or she be affected by the
capital gain tax?
Income taxes are levied at
the US rate and vary according to each taxpayer's filing status. Thus, if the
owner is an individual, then the income tax rate is the rate that applies for
individuals. Typically the capital gains rate is 15% for individuals if they
have held the property for a year or longer. Corporate rates will apply to
corporations at the graduated rates which, inclusive of Florida, are
approximately 40%.
- How does the capital
gains tax apply in the case of reinvesting in another piece of real
estate?
A 1031 exchange is possible under the
same basic rules that apply to US taxpayers.
- How many times do you
have to reinvest in order to avoid capital gain tax?
Capital gains tax on real estate can not be avoided. The tax
may be delayed if the 1031 exchange is done.
Renting Property
- If you own real estate
that you wish to rent, who will take care of maintaining, renting and
protecting the property?
Property management?
What are the conditions of property management? Property management is one of
the many services that Florida-Realty Mgmt. Inc. provides to our clients and
investors. We will list your property in the Realtor MLS system, for which you
will pay 1 month's rent for a 1-year rental contract. For property management
we typically will charge you about 6% of the monthly rent per month, per rental
property. Of course, you will be responsible for paying all taxes, condo or
homeowner fees, insurance, and maintenance associated with the property. In the
event of additional expenses, you would approve all costs and we would obtain
your approval before paying them. The property management and rental fee is
usually a tax deductible item.
- What is the usual time
frame of renting real estate?
Usually it
takes between 30 to 60 days for a renter to be approved and moved into the
property. If there is no association to approve the renter then the process can
be completed much faster.
- Who pays the expenses
for a rented condo or house, the owner of the property or the tenant who rents
the property?
The owner pays for the
mortgage, insurance, taxes, condo fees, and for maintenance of the house, yard
and pool if it has one. In most cases, the renter pays for all of the
utilities. If it has common property, the condo fees cover any common
maintenance and care.
- If you rent the
property for a period longer than a year, who pays for the property tax? The
owner or the renter?
If the owner is paying
for the property tax, is the expense included in the rent? The owner of the
property always pays for the property tax.
- What is the usual time
period for renting the property (at least a year, 5 years?)
Properties are typically rented for 1 year. Sometimes a 6
month rental can be done, and the rental fee is usually a bit higher for that.
Any property rented for less than 6 months and 1 day is subject to an
additional tax.
- Is it possible to rent
the property just 11 months a year?
Yes, that
wouldn't be a problem.
- Sometimes owners want
to sell a property or to move into it themselves. If an owner wants to stop
renting the property, how much notice does he or she have to give to renter or
the property management company?
The rental
agreement will determine the length of the rental period. Once the lease is
signed, both parties must abide by the terms of the contract. Of course, if the
owner wanted to break the lease, he or she could offer the renter money to move
out early.
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