July 23

Investing in Florida

buy, invest, tips and tricks

It's not a secret that investing in Florida real estate is rewarding. Foreign buyers' purchases of Florida residential real estate increased to $24.2 billion in 2020 (from $19.4 billion in 2016). This accounts for 21 percent of Florida's dollar sales volume. This trend is especially noticeable here in South West Florida. For example, Canada accounts for 22% of buyer share, Europe accounts for 23%, and China accounts for 10%.

In general, the US is friendly to international buyers, and the process is equal to US residents. But there are some basic practices that all foreign buyers should understand before investing. Credit checks, financing, and tax policies will all be different for foreign buyers.

Common Real Estate Practices In The US - our MLS

In the US, most real estate sales are posted to the Multiple Listing Service (also known as the MLS). The MLS is a database that allows all agents in the USA to access any listing in the system. This differs from many other countries where buyers have to go from agent to agent to find a property. However, several listings in specific markets – the luxury market in particular – remain "pocket" or "silent" listings. Hence, it is essential to have real estate agents working for you – like Ben Nathan – who know about both MLS listings and pocket properties.


When you are investing in Florida, the sales commission is paid by the seller and then divided equally between both the buyer's and seller's brokers. Generally, commissions range from 3 to 6 percent, depending on the property and the market. Unlike most countries, when you're investing in Florida, you don't pay an agency commission. Therefore, it's always advisable to work with an experienced broker or agent who will navigate you through the local real estate scene and protect your interests. Ben Nathan specializes in helping international buyers achieve their real estate goals and lifestyle needs.

Buying Your Home

Before investing in Florida, be ready to prove your identity. Although you don't need US citizenship, you will need an Individual Taxpayer Identification Number. The Internal Revenue Service assigns this number to foreign nationals who need to file income tax returns. This is required by all real estate holding in the USA. To verify your identity and country of origin, you will need a valid passport or several photo identifications. Though real estate ownership isn't tied to immigration or visa status, there are rules about how long you can stay in the US. If you're not a citizen, make sure to review US visa requirements before purchasing.

The Fun Part About Investing

Besides the thrill of a return on your Florida investment.  You'll need to navigate through the complexities of the Florida real estate market. The are so many different locations and property types, you will want to research the right one for your investment. Before investing in Florida, you should decide what property you want. Do you want a large multi-family property or a stylish multi-million dollar condo in downtown Sarasota?

Ben Nathan is an establish real estate agent in Sarasota Florida, he says whichever property style you choose to buy, it should reflect your desired lifestyle. Don't purchase a property for the sake of ownership – you want to secure a home that suits you. Finding the right home should be a fun experience, Ben loves navigating his clients through the complexities of the Florida real estate scene.

Financing and Mortgages

During the 2008 financial crisis and the years that followed, financing for foreign nationals presented challenges. However, over the past few years, banks have significantly loosened their financing restrictions to facilitate international buyers' investments.

Generally, foreign buyers can obtain financing for properties with a 30% down payment. Note that each state is different, so it's in your interest to verify state requirements.

Nowadays, banks are able to offer mortgages to foreign buyers. They usually require a relationship with the customer beyond just the mortgage. Some banks, such as HSBC (which offers financing options to many foreign homebuyers), require that international buyers hold a $100,000 deposit with the bank.

Generally, banks also want to see a 12 months' reserves. This is to cover the mortgage payments, maintenance fee, and taxes in addition to the $100,000 mentioned above.

Ben Nathan has relationships with some knowledgeable mortgage banks. He can guide you through the lenders and mortgage terms that suit you best. Please contact Ben directly for more details and financing options. 


When you officially close on your property, and the property is transferred to the new owner, neither the buyer or seller need to be in the US. Instead, the buyer or seller can provide a representative (usually a broker) with "Power of Attorney" to finalize the transaction on their behalf. This is a common practice that is convenient if you do not want to return to the US for the closing. Talk to me about that possibility if it may interest you.

Verification Documents

International buyers investing in Florida are typically asked to provide the following documents, so it's good to get them in order ahead of time.

Credit References

Usually, a minimum of four references from credit sources are required for mortgage loan applications. These documents must come from finance professionals such as accountants, bankers, or insurance officials. This is very important, US realtors reported that most of the foreign deals fall through because the buyers lacked adequate credit history.

Proper Visa or Foreign Passport Copy

Verify your documents are valid aren't expiring anytime soon.

Verification of Rent/Mortgage Payments

If you are renting or carry mortgage payments, the government will require proof for a period of (at least) 12 months before starting your loan application.

Proof of Employment

International buyers, just like US buyers, will need to verify their employment and income when applying for a mortgage.

Sufficient Closing Funds

There are a number of costs to consider, besides the sales price. You will need to show sufficient funds to purchase and the additional funds for your closing costs, initial payments, insurance costs, taxes, etc.


US lender legally requires borrowers to purchase homeowners insurance to protect the home from any potential damage. Insurance costs vary based on property size and state. These costs tend to be higher in states like Florida, which are prone to natural disasters.

Download the Florida Relocation Guide

Everything you need to know about setting up residency in Florida. 

Everything You Want To Know About Taxes

Tax liability is different for foreign nationals than it is for US residents. Here's a quick breakdown of major distinctions:

  • Under the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA), income tax is withheld immediately after a non-US-resident sells the property. The rate varies from state to state, but the federal rate is a flat 10%.
  • While the federal tax on long term investments (holding property for over a year) is 15% for US residents, foreigners pay 30%.
  • The IRS requires a "Statement of Withholding on Dispositions by Foreign Persons of US Real Property Interests." Many states will also request a "Nonresident Real Property Estimated Income Tax Payment Form."
  • We recommend you seek the expertise of a professional tax accountant to assist with these forms.

Consult a Tax Specialist in Your Home Country

As an international buyer, you overall tax liability will differ based on your home country's tax treaty with the US. That said, it's best to consult a tax advisor in your primary country of residence. They should be familiar with tax treaties and provisions. In the US residents are subject to 20% in Capital Gains. But it could be higher for a number of foreign residents. Discuss with your local tax specialist before you purchase.

Rental Income 101

Laws require all foreign nationals to pay US income taxes on all the net income earned from rental property. A foreign national that fails to submit the tax return in a timely fashion will lose the ability to claim deductions. The IRS will also demand a 30% tax of the gross rental income. Even if the property owner is initially incurring tax losses and doesn't owe any taxes, they must still file their tax returns to make the "election" required by law.

Maximize Your Deductions!

The good news is that international buyers typically don't pay income taxes on their rental income for the first 10 to 15 years if they are able to finance their real estate purchases with 40 to 50% down payment. More good news, when it comes to expenses that can be deducted from rental income, the US is very generous. Mortgage interest, property taxes, insurance, common charges, depreciation, and closing costs can all be claimed as deductions against income. This means you will generate negative taxable income, and you will not have any tax liability during the early years of your investment.

Establish an LLC

International buyers should ask themselves if it's in their interest to purchase under and LLC (Limited Liability Company) or the name of a domestic US company. Although there are many benefits to buying a property through an LLC, certain treaties between a foreign country and the US can detract from those advantages. Foreign buyers should do their research ahead of time, and consult with a tax adviser specializing in international law. An excellent place to start your research is www.irs.gov.

Here are six things you should know about LLCs in the United States:

  • It takes about one week to form an LLC.
  • Both foreign nationals and US residents can form an LLC.
  • The LLC has to be registered in the same state as the property you purchase.
  • The LLC is required by law to file local, state, and federal tax returns.
  • At the time of sale, property owners can sell or transfer LLC shares to a buyer.
  • A US-based LLC can be owned by a Foreign Corporation for added benefits.

Tip – If You Want To Avoid the US Estate Tax

When a non-US-resident dies, his or her estate will be taxed by the US government at roughly 45%. This can be avoided if the international buyer sets up a Limited Liability Corporation (LLC) – which owns the property – and a Foreign Corporation to own the LLC. Since the property in this scenario is owned by the Foreign Corporation, the US would not be able to tax it upon the owner's death. This can be a huge tax savings and is not very expensive or time intensive to implement, especially if you solicit professional help.

Find a professional real estate agent

It is in your best interest to work with a local real estate agent who understands international buyers' complexities and financial needs. A knowledgeable real estate agent will protect your interests and make the purchasing process more efficient and rewarding.

Ben caters to each of his clients' lifestyle needs and will help you navigate through the entire purchase process of your next home or investment. In addition, Ben's global network of contacts and major media outlets opens many doors for his clients. He will help you find the most desirable properties available, and then secure the best price and purchase terms on properties for you as an international buyer.


While real estate in prime markets like Miami and Manhattan is extraordinarily expensive and vulnerable to the IRS (Internal Revenue Service), South West Florida presents itself as a very smart investment. If you're a buyer of the luxury lifestyle or planning for retirement, you will yield higher returns here in Florida. To put things in perspective, the London and Hong Kong real estate market is about 50% more expensive than Manhattan. That said, investing in Florida real estate is an excellent way for international buyers to keep their money safe (and appreciating) in a politically stable country.

Just make sure you get all your paperwork in order ahead of time, and that you find the right real estate agents to guide you in your search. Please contact Ben Nathan to help you navigate your next investment property or home here in South West Florida.

About the author 

Benjamin Nathan PA

Ben started with the distinct vision of bringing together clients with a shared appreciation for architectural homes. He runs an idea-based sales team that strives to innovate communication strategies that challenge the mass market approach. Follow Ben on social media.

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