What Taxes Should You Consider When Investing from Abroad?
Investing in real estate in Florida is a smart way to diversify your portfolio and generate passive income. But if you’re a foreign investor, it’s essential to understand the U.S. tax implications that come with it — so you can avoid surprises and plan strategically.
Here are the key taxes you should be aware of:
1. FIRPTA (Foreign Investment in Real Property Tax Act)
FIRPTA requires a 15% withholding on the sale price when a foreign person sells U.S. real estate. This amount is withheld by the buyer and sent to the IRS. It’s not a final tax, but rather a prepayment that can be adjusted when the seller files a U.S. tax return.
2. Federal Income Tax
If you earn rental income from your property, that income is taxable. Generally, there’s a 30% withholding on gross rental income, unless you file Form W-8ECI to be taxed only on net income (after deducting expenses).
3. State Income Tax
The good news? Florida does not impose a state income tax on individuals. This is a significant advantage for investors, as it reduces the overall tax burden.
4. Property Tax
All real estate owners in Florida — whether residents or not — must pay annual local property taxes. Rates vary depending on the location and assessed value of the property. These funds go toward public services like schools, safety, and infrastructure.
5. Other Potential Taxes
- Estate or Inheritance Tax: Florida doesn’t charge these at the state level, but foreign-owned U.S. assets may be subject to federal estate taxes upon the owner’s death.
- Capital Gains Tax: If you sell your property for a profit, you may be liable for capital gains tax, depending on your investment structure and whether your country has a tax treaty with the U.S.
How to Get Prepared
Investing from abroad is not only possible — it’s highly rewarding when you make informed decisions with the right team by your side.
💬 If you’re thinking about investing in Florida, my team and I are ready to guide you. We offer personalized advice, local expertise, and full support throughout every step of the process.
📲 Get in touch today and let’s shape your next U.S. investment together.
