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Marina Florida Title Company Helps Foreign Nationals Invest in U.S. Real Estate

Jan 11 2017

Are You a Foreign National Needing Help in U.S. Investment? Learn How Marina Florida Title Company Will Help You


If you’re reading this blog, you may be one of the hundreds of thousands of foreign nationals who have invested in Florida real estate. The state’s desirable climate, diverse selection of properties, and low taxes make it one of the safest and most rewarding investments in the country: no wonder why it accounted for more than a fifth of all residential real estate purchases between April 2014 and March 2015 alone – an amount worth over $21 billion!


With the sole exception of housing cooperatives, most foreign nationals can legally purchase any kind of property in Florida, from condos to single family homes, without U.S. citizenship or residency; the only requirement is to have an Individual Taxpayer Identification Number (ITIN), which is issued by the I.R.S. or through a Certified Public Accountant (CPA). (Certain nationalities may require additional documentation to apply.)


But while Florida continues to be a welcoming place to entrepreneurs and investors from all over the world, policies at the federal level continue to present challenges to even the savviest foreign investor. Foreigners with a stake or interest in Florida real estate should be made aware of these developments, and consider the services of a qualified Florida Title Company.


One of the biggest hurdles that limit foreigner’s investment potential is the Foreign Investment in Real Property Tax Act (FIRPTA), a law enacted in the 1980s that authorizes the U.S. government to withhold 15 percent of the gross proceeds of any transaction involving a foreign national that is selling, exchanging, transferring, or liquidating real estate. Foreign nationals are also required to pay both federal and state income taxes on any net income they receive from a rental property. Although Florida fortunately lacks an income tax, you’ll still be left with as much as 30 percent of gross rental income assessed.


Even foreign buyers who don’t owe taxes, or are incurring losses on their investment, are still required to timely file their tax returns to avoid costly penalties. It’s an added burden most foreign investors don’t have the time to deal with.


One of the least known but most onerous tax burdens facing foreign nationals is the so-called “death tax”, in which 40 percent of their estate is taxed when they pass away. Foreigners without U.S. citizenship or residency who wish to bequeath their U.S. properties will be limited to only $60,000 worth of their situs assets – e.g., assets located physically in the U.S. or recognized as such for legal purposes. And don’t think you can get around this tax burden by gifting a property beforehand: the federal gift tax of 40 percent also applies to foreigners, with annual exclusions only $14,000. If you have a non-citizen spouse, you can only pass on $143,000 annually to them without tax.


(Meanwhile, U.S. citizens and legal residents can pass up to $5.25 million upon death or as a gift before being taxed, and make unlimited transfers to a spouse who is a U.S. citizen.)


These are just some of the difficulties and restrictions you will face as a foreign investor in the U.S. Whatever your portfolio or investments goals are, you’ll find your returns on investment heavily constrained without assistance from professionals who know both real estate and immigration law as it applies to foreign nationals.


Marina Title is a Florida Title Company that offers comprehensive real estate and title services well beyond the industry standard. In addition to thoroughly examining the title of any property you buy – and reviewing or preparing the relevant paperwork, such as title insurance – we’re qualified to provide expert legal advice on the best opportunities and strategies to maximizing your investment, as well as any risks and liabilities.


As an attorney owned and operated company, we know the developments in real estate, tax, and immigration law, and can help you get around the various hurdles and restrictions mentioned above. For example, we can determine whether you qualify for the various visas that are available to certain classes of foreign nationals, such as investors. We can also help you form a Florida Limited Liability Company (LLC) through which to purchase and hold your properties, limiting any legal or financial risk that may come from a failed investment. You can also form a Foreign Corporation to hold shares in your property-owning LLC, which will protect you against the heavy estate tax, and allow you to essentially pass ownership of real estate in a way that avoids the usual taxation on foreigners.


These are just some of the services Marina Title can offer based on your unique needs and goals. We pride ourselves in offering innovative and cost-saving solutions that will optimize your potential ROI while minimizing your liabilities. Based in the global city of Miami, Florida, Marina Title has successfully assisted foreign investors from all over the world in navigating around U.S. laws and regulations. To learn how we can help you, or to schedule a consultation, please call (305) 901-5628 or email info@marinatitle.com

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