5 steps to buying a home in Miami as a foreigner
Are you thinking of buying a house in Miami as a foreigner? If so, you're in luck - anyone can buy a home in Miami to protect their future regardless of nationality. However, there is something else to keep in mind ...
1. Know the requirements to buy a house in Miami as a foreigner.
First, the buyer must correctly structure his real estate investment to avoid and protect himself from the wealth tax.
Foreign investment law on real estate tax FRIPT states that the government withholds a percentage of revenue to cover potential capital gains tax that could be owed. The amount withheld is equal to 15% of the income, but this withheld rate is returned after the seller presents and pays their tax bill.
US tax policy typically favors foreign investors as well as Americans and residents, so you won't find too many specific rules when a foreigner starts buying a home in the US.
Also remember that commissions are always paid by the seller. The commission is split evenly between the buyer's real estate agents and the seller, so you don't have to pay anything to have a real estate agent work on your behalf.
2. Pay for your property in Miami in cash
Although the US government does not impose any restrictions on foreign investment in US real estate, the fastest and most efficient way to buy a house in Miami being a foreigner is paying the full price in cash.
In case you need financing, you will have to make sure you meet some requirements, such as having a credit score of 720 or higher, being able to make a down payment of 20%, having a valid SSN or ITIN, among others.
3. Find a real estate agent to help you buy a home in Miami safely
The real estate market in the United States is very transparent, making it a smart decision to work with a single professional real estate agent during your buying process. To encourage dynamism in the real estate market, the Florida Department of State, for example, requires real estate agents to share their exclusive property listings within 24 hours for you to visit any property on the market.
Having a professional in the real estate market will ensure you receive an excellent level of service, as they will accompany you and make you progress throughout your search.
4. Know what type of property you are looking for
Typically, foreign investors who decide to purchase property in Miami are limited to the purchase of condominiums and independent or multi-family homes.
The type of home you are looking for also affects the price range you can find. In general, Miami has the largest available inventory for entry-level homes between $ 180.000 and $ 250.000. You can usually find properties with these entry price points in South Miami, in the area around the Keys, although this implies a longer journey and the possibility of finding yourself in an area with a slower economy than other areas.
5. Know the implications for selling a property in Miami as a foreigner
If at any time you decide to sell your property in Miami, it is important that you first know the rules and requirements for selling real estate in the United States.
Mainly, you need to know that the IRS requires foreign national property buyers to retain 15% of the amount obtained in the disposition. If the buyer does not withhold this amount, they could be responsible for additional taxes.
The rules surrounding the sale of properties in Miami as a foreigner are somewhat complex, but you can learn more by visiting the IRS FIRS publication. You can also get more information at International tax gap series.
It is crucial to work with an agent you trust, to help you progress toward the choice that resonates with you the most, and to guide you in making the right decision.