Home Buying in Cape Coral>Question Details

Larry Rivers, Home Buyer in Cape Coral, FL

There is a belief among Canadians that if they buy a property in the states, specifically Cape Coral that they will be subjected to a foreigners tax .

Asked by Larry Rivers, Cape Coral, FL Mon Apr 19, 2010

Are there are fees or taxes levied for a purchase or your annual taxes on a foreign investor.

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Answers

10
Mark Washburn’s answer
Not an accurate belief, foreigner owners are exempt from the Homestead Act which is already addressed below. here are some blog posts about Canadians buying property in SW Florida: http://www.gulfreturns.com/tag/canadians

Good luck with your search!
0 votes Thank Flag Link Thu Apr 22, 2010
Dear Mr. Rivers,

This seems to be a common misnormer from our Canadian friends. I hear this comment from Cananda frequently. As a Canadian homeowner, you are taxed the same as anyone who is not domiciled in Florida (made Florida their permanent residence).
Canada does have a tax treaty with the United States. How you will you use the property, deed or will the property, are all things that should be discussed with a tax accountant prior to taking title for how you take title could have significant impact on your finances in the future. I will be happy to recommend international tax accountants we use both here in Florida and in Canada.

As for the withholding tax, FIRPTA only applies if the purchase is $300,000 or more - again, all things that need to be discussed with your accountant prior to making a purchase.

If you are in the Toronto area, I'd be happy to invite you to one of our seminars May 4th or 5th discussing all the aspects of a Canadian purchasing real estate in Florida.

Best Regards,
Carla Rayman, Your Global Agents
Director of International Business Development
Prudential Palms Realty, Sarasota, Florida
+1 941 724 0519
0 votes Thank Flag Link Mon Apr 19, 2010
HI Larry
This is not true. You are subject to the same taxes as an American buying a secondary home. Its amazing what goes though the grape vine!
You may want to be aware that the infrastructure for our iirrigation, sewer and water system has been upgraded in many of our single homes from septic and well to city water and irrigation during the last years, and will continue to be upgraded, and these" city" homes have an added assessement to be paid with your taxes.These assesssments are the same if you are a resident or not. Some homes have these added taxes paid off, some partialy depending when the upgrade was done and how much was paid since then.
Make sure that you use a local Realtor who knows the ins and out of our market and our taxes.
In canada there are no capital tax gain if you are selling primiry residence or if you are replacing it with at least the same amount you made in the sale, however, if it is a secondary home you will pay some capital gain to the US governement and that is the same for every non resident:
here is a link which is very useful: http://www.libertytaxcanada.ca/home-seller-selling-income-ta…
and happy hunting!

LLoyd NICHOLS
Right Choice Realty LLC
cell: 239-810-2980
office: 239-463-5217
Activerain Local Blog: http://localism.com/neighbor/lloydn
Active Rain Blog: http://activerain.com/lloydn
Website: http://www.mlsouthwestfloridahomes.com Search the MLS in Southwest Florida
Listingbook: http://lloydnswfloridahomes.listingbook.com
0 votes Thank Flag Link Mon Apr 19, 2010
Dear Larry, there are no penalties for being a foreign purchaser of property in the US. However, it is important that all property owners adhere to the laws regarding property taxes and income taxes. I would suggest that you educate yourself regarding what the costs of holding the investment, earnings and tax liability, and costs related to selling in the future. Some of these details vary for the foreign owner. I'd be happy to assist you with this information and also share my network of professional adivsers with you!
Susan
0 votes Thank Flag Link Mon Apr 19, 2010
If it is an investment property, the non-resident alien owner or their property manager must withhold 30% of all rental income to comply with FIRPTA regulations.

If I may be of any further assistance I may be reached at elizabeth@elizabethherbert.com
0 votes Thank Flag Link Mon Apr 19, 2010
As the others have told you, Canadians are not subject to a foreigners tax. I have a very detailed brochure that explains the issues that effect non us citizen buyers. Please feel free to contact me and I will be happy to send you the brochure. I also have several Canadian citizens I have sold homes to that I could put you in contact with if you would like to speak with them.

Terry McCarley / Remax Realty Team
cell: 239-707-4575
email: leecountyrealtor@earthlink.net
0 votes Thank Flag Link Mon Apr 19, 2010
Hello Larry,
Here is a blog I wrote on this subject. http://www.trulia.com/blog/nancy_doyle/2010/03/taxes_on_flor…

I have helped many Canadians purchase homes here in fact I closed on one today with a couple from Campbellville Ontario. I would be happy to help you if you are not already working with an agent.

Have a wonderful day,
Nancy

Nancy Doyle
239-209-2237
nancy.doyle1@comcast.net
http://www.nancydrealtor.net
search Cape Coral Homes with a free listingbook account http://www.nancyd.listingbook.com
0 votes Thank Flag Link Mon Apr 19, 2010
Larry, good question.
John is correct about the property tax exemption, "homestead", that you would not qualify for. There is no special "tax" for Canadians. As a clarification to the first answer, 10% of the purchase price would be withheld at closing (when you sell) until you file a US tax return.
I hope this helps.

David Lang
Keller Williams Elite Realty
239-677-8780
0 votes Thank Flag Link Mon Apr 19, 2010
Hi Larry,
I have sold to at least a dozen buyers from the Ottawa area. They are not subjected to any additional tax. The thing that gets a little miss leading is you would not qualify for the homestead exemption. This is a real estate tax break giving to US citizens making the home they purchase their primary residence. This gives them around a $50,000 break on appraised value which turns out to be a $1,000 a year break on their real estate taxes in Cape Coral.
I have made quite a few good friends from selling to Canadians. We do a lot of boating together in the area.
Feel free to contact me if you have any other questions.

Regards,
John

John Ellwood
Miloff Aubuchon Realty
4707 SE 9th Place
Cape Coral, FL 33904
239-229-9904 cell
239-542-1075 office
239-542-7166 fax
jellwood@TeamAubuchon.com
0 votes Thank Flag Link Mon Apr 19, 2010
Larry,

In all of the Unites States, not just Florida or Cape Coral there is not a fee to purchase a property if you are not a US citizen. However, when you sell, there is a foreign invester tax of 10%. That is all foreign investers, not just Canadian. What you do even before you buy is get an ITIN, international tax ID number. When you sell, you file a report and get the 10% back. It is really simple. In the end, it does not cost you the tax at all. You can google ITIN and get the address in Philidelphia or the web site to download the file.

Hope this helps!

Debbie Albert, PA
Coldwell Banker Residential
http://www.RonAndDebbie.net
0 votes Thank Flag Link Mon Apr 19, 2010
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