I am interested in purchasing a property in Miami. I am a non-resident not requiring US financing.

Asked by Walter Gomes, Miami, FL Fri Oct 26, 2012

I would like to know what I could expect in terms of taxation: Will my property taxes be greater then if I were to purchase as a resident? If i sell the property, will there be penalty or additional taxation on the sale price / profits?

Appreciate any advice you can share on these matters.

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Gary Aboff, Agent, Miami Beach, FL
Wed Nov 7, 2012
Generally, estimate about 2% of the final price for taxes...as a general approximation.

Yes, real estate taxes for residents receive a homestead exemption of $25,000.

As far as taxes due on the sale, you need to consult with a tax professional, and I can refer you to some people if you wish.

Feel free to contact me at your convenience.

Thanks and have a good day.

Gary Aboff
2 votes
Stefhani Sot…, Agent, Fort Lauderdale, FL
Fri Oct 26, 2012
Hello Walter,

These are a few things you could expect when buying an investment home.

* There are NO additional taxes when buying, the only fees you incur when you buy cash are title insurance (based off of purchase price), title/closing fee (varies on purchase price), and a small recording fee to record the warranty deed showing ownership with Clerk of Courts) Example a home purchase of $185,000 cash the recording fee would be $18.50. Also keep in mind if you intend to keep the property, you will want to consider hazard and flood insurance.

* When you’re selling the home you just purchased, you have to pay the IRS Capital Gains Tax, which is currently 15%, but may go up to 20% in the future years. Also include the federal and state tax rates of your given state when selling a home. The IRS depreciates the Capital Gain by 3% per year as long as you hold on the investment per year, until it is fully depreciated. When you sell the capital asset, in this case a home, the IRS wants to tax you on the depreciated portion as an income tax, and that would be a marginal tax rate, example if you hold an investment for 15 years, the IRS depreciated it by 45%. It then wants you to pay the taxes on that 45% depreciate. If you combined state and federal taxes to that you end up paying 35% at the marginal rate, that’s about 15% of the cost of the property. Minus the amount you initially invested.

Due to the fact that exchanging, a property, represents an IRS-recognized approach to the deferral of capital gain taxes, it is very important for you to understand the components involved and the actual intent underlying such a tax deferred transaction. It is within the Section 1031 of the Internal Revenue Code that we can find the appropriate tax code necessary for a successful exchange. I would like to point out that it is within the Like-Kind Exchange Regulations, issued by the US Department of the Treasury, that I find the specific interpretation of the IRS and the generally accepted standards of practice, rules and compliance for completing a successful qualifying transaction.

The extent that either of these rules (above) are violated will determine the tax liability accrued to the person executing the Exchange. In any case which the replacement property purchase price is less, there will be a tax responsibility incurred. To the extent that not all equity is moved from the relinquished to the replacement property, there will be tax. This is not to say that the (1031) exchange will not qualify for these reasons. Keep in mind, partial exchanges do in fact, qualify for a partial tax-deferral treatment. This simply means that the amount, of the difference (if any), will be taxed as a boot or "non-like-kind" real estate property.

Stefhani Sotello
EXIT Ocean Realty
(786) 291-3998
2 votes
Nicholas Rob…, Agent, Miami, FL
Fri Oct 26, 2012

The annual property taxes that you would be required to pay would be the same as US Citizen would pay.

When a foreigner/non-US citizen sells a property in the US, the title/closing company is required to withhold a 10% FIRPTA withholding from the sale price. After the foreign seller files their taxes at the beginning of the nest year, the title company will use the 10% withholding to pay the capital gains tax. If the full 10% is not required/used, the title company is required to return the unused balance to the foreign seller.

If you have any other questions or would like further assistance in your property purchase in Miami, please contact me directly!


Nicholas Robinson
Coldwell Banker
+1 305-790-2012
2 votes
Beth Jenkins, Agent, Miami Lakes, FL
Fri Oct 26, 2012
Hi Walter,
As Realtors, we are not allowed by law to advise you on your tax liabilities or requirements, that is something you need to contact an attorney/accountant for advice.
I can tell you however that your taxes are higher if the property is not "homesteaded", meaning you are not a full time resident in the property. When selling, again I can tell you that you will pay taxes to the US as anyone does when selling property, and also whatever your own country wil require.

It is best to contact a local realtor who will refer you to their own team of accountants and attornies that we trust.

I would be glad to assist you and refer you to trusted professionals to further answer your questions.
I look foward to assisting you.

Beth Jenkins
South Florida Brokers
2 votes
Kenny Raymond, Agent, Miami Beach, FL
Fri Oct 26, 2012

All very good questions please call me and I will discuss your different options with you. You may also want to consult a CPA and real estate attorney which we can help you with.


Kenny Raymond PA
The Raymond International Group
Prudential Florida Realty

(786)443-9649 (cell)
(305)675-2695 (Fax)


825 Arthur Godfrey Rd- 2nd Floor, Miami Beach, FL 33140
Prudential's 2009 -10 year Legend award- Top 10 teams & Chairman's Platinum Circle for Prudential Florida Realty
1 vote
Lila Lopez, Agent, South Miami, FL
Fri Oct 26, 2012
Good Afternoon Mr. Gomes,

You ask very good questions that do required you making the right decisions so as to avoid any additional taxes when selling the property later down the road. As for the property taxes, you would pay a higher property tax if you will not be residing in this property as your primary residence. I have worked with foreign buyers and I have them working with a local attorney and CPA to get all the financial and tax questions answered. Please feel free to contact me and I can provide you with their contact information so that you can get you questions regarding those matters directly from them.

Lila Lopez
RE/MAX Advance Realty
1 vote
Selda Kirkan, Agent, Miami, FL
Mon Dec 3, 2012
Hello Walter,

Around 2% property tax. You can not take advantage of homestead as a non resident. Are you planing to use the property or rent it out to generate income. I suggest you to open a corp in US and use that corporation for your transactions, that is what we do for our foreign investors.

Best regards,
Selda Kirkan
Licenced Real Estate Agent
South Beach International Realty
1680 Meridian Avenue #102
Miami Beach,FL
Cell: (954) 305 6424
Email: selda@miamirealestateinc.com
Web: http://miamirealestateinc.com
Skype: seldakirkan
iPhone Application:
0 votes
Irina Karan, Agent, Aventura, FL
Wed Nov 14, 2012
Property taxes won't be higher if you are foreign national.
If you use the property over 180 days a year, you can even claim it as your principal residence
in the US - and get a homestead exemption.

However, if you buy as an individual, you will be subject to FIRPTA Act.

There are certain steps to take to avoid paying up to 10% of your purchase price.

There are exemptions - so if the property value is under 300K, and the buyer will execute an affidavit at closing stating that he'll be residing in the property for the next 2 years at least 50% of the time (he can rent for the same amount of time as the time he resides there, per year).

Or, you can open a corporation or LLC, to avoid FIRPTA all together.

Hope this helps,

Irina Karan
Beachfront Realty, Inc.
0 votes
Renata Santos, Agent, Miami Beach, FL
Wed Nov 7, 2012
Call me so I can give you all the proper information .
Remata Santos: 305-5287366
0 votes
SophieMiamiB…, Agent, Miami Beach, FL
Sat Oct 27, 2012
Feel free to contact me and I'd be happy to help you.

We deal with a lot of foreign buyers.

Sophie Bamps
Real Estate Agent
Cell: +1 305 206 8867
Fax: +1 305 443 2226
0 votes
Ekaterina Li…, Agent, Aventura, FL
Fri Oct 26, 2012
Hi Walter,

Let me know if you want me to help you find your new home.

Ekaterina Liranzo
917 675 9832
0 votes
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