Florida is the ideal state for Europeans looking for winter sun. It’s a shorter journey than to California and it has well-established expat communities, which will make you fell right at home straightaway. However, it is the USA and you might find that there are tax and compliance issues that are ‘foreign’ to you, but with plenty of advance planning and expert help it will all be fine – otherwise fewer expats would buy property in Florida.
Here are a few of the issues you should plan for before buying in Florida.
How will you pay for the property in Florida?
If you’re paying cash, no need to concern yourself with sorting out a mortgage. If you do need a mortgage for a U.S. property, it is best to go to a licensed mortgage expert. Not only do they undergo continuous training, they also keep up-to-date with all the current special offers and can often offer you lower rates and better set-up costs. Banks on the other hand are limited to what they have to offer in-house, and their deal may not be the best for you.
What are the Florida tax requirements for property owners?
There are several of these and you should consult a tax expert to minimise your payments within the legal requirements.
You will need to pay income tax to the IRS if you rent out your property, even if you mostly live overseas, unless IRS withholding tax has been applied, and then you don’t.
There is a tangible personal property tax on furniture and fixtures in rental and business properties. Tax returns reporting the value of these assets must be filed to the Property Appraisers’ office by April 1st.
Property tax must be paid annually. The Property Appraiser’s Office establishes the assessed value of a property and prepares the tax roll. You’ll usually receive the tax statement around the beginning of November each year.
If you’re renting out your property and it is for less than six months of the year, there is a tourist development tax and a sales & use tax. A management company can handle this for you, even if you collect the income in your home country.
There is also a local business tax that rental owners have to pay annually. And then there is the capital gains tax, which applies to a sale once you’ve owned the property for more than one year. And, U.S. tax law also demands that any non-resident alien who sells an interest in a U.S. property is subject to a withholding tax of 15 percent of the gross sales price.
It probably sounds more complex than it is, but it is still better to get expert advice and ensure you know exactly when to pay and what you are liable for.
Take a look at the properties for sale in Florida on Umuzee.com – bring some sunshine into your life!