Foreign Buyer's Guide to Miami Real Estate

Miami's real estate market is built on international capital. Anywhere from 15–25% of South Florida transactions in any given year involve a foreign buyer, and at the ultra-luxury end (above $5M) that share climbs higher. The mechanics are well-established, the closings are routine, and you don't need US citizenship or residency to own.

What you do need is to understand the tax, financing, and ownership-structure choices that determine whether your purchase is efficient or expensive. This guide walks through every layer — federal tax law (FIRPTA, estate tax, gift tax), Florida-specific rules (no state income tax, documentary stamp), financing (foreign national mortgages vs. cash), ownership structures (personal vs. LLC vs. trust), FinCEN reporting requirements, and the actual closing process from offer to deed.

It's written for buyers who do not have US citizenship, US permanent residency, or US tax residency, and who are buying Miami real estate as a primary residence, second home, or investment. If your situation involves any US tax residency, your rules are different and most of FIRPTA does not apply.

One disclaimer up front: this is general information, not legal or tax advice. Tax law changes, treaty provisions vary by country of citizenship, and the right ownership structure depends on your specific circumstances. Use this guide to ask better questions; sign documents only after a US tax attorney and CPA review your situation.

Can Foreigners Buy US Real Estate at All?

Yes, without restriction. The United States places effectively no restrictions on foreign nationals purchasing residential real estate. You do not need to be a US citizen, US permanent resident (green card holder), or even physically present in the US to own a Miami condo. You do not need a visa to close. You can close remotely with a power of attorney, and many international purchases do.

A handful of recent state-level laws restrict purchases by citizens of specific countries (Florida's Senate Bill 264, signed in 2023, places restrictions on real estate purchases by persons "domiciled" in China, Russia, Iran, North Korea, Cuba, Venezuela, and Syria, with carve-outs for permanent residents and asylees). For most international buyers (Latin American, European, Canadian, and most Asian and Middle Eastern citizenships), no national-origin restriction applies.

Federal law also imposes no restriction. What federal law does impose are tax obligations on the transaction and on eventual sale — that's FIRPTA, covered next.

FIRPTA: The Most Important Foreign-Buyer Tax Rule

The Foreign Investment in Real Property Tax Act of 1980 (FIRPTA) is the single most important federal tax rule for foreign buyers, and the one most consistently misunderstood. Here's what it actually does.

FIRPTA does not tax foreign buyers when they purchase US real estate. It taxes foreign sellers when they sell US real estate. The mechanism is withholding: when a foreign person sells US real property, the buyer is legally required to withhold a percentage of the gross sale price and remit it to the IRS.

The current withholding rate is 15% of the gross sale price (10% for sales between $300,000 and $1,000,000 when the buyer will use it as a personal residence; 0% for sales under $300,000 with the same residence-use exception).

The withholding is not the final tax. It's an advance payment against the seller's actual capital gains liability. When the foreign seller files their US tax return for the year of the sale (using Form 1040-NR), they reconcile the withholding against their actual tax owed and either pay more or receive a refund.

Three implications for you as a foreign buyer:

1. The day you buy is the day you should plan your eventual exit. You don't pay FIRPTA today, but you will pay it (or its equivalent under the actual capital gains regime) when you sell. Build your purchase economics around an after-tax exit.
2. If you ever sell to another foreign buyer, they will withhold from you. This is normal, expected, and budgeted by foreign buyers as a cash-flow event.
3. You can apply for a withholding certificate to reduce the withholding if your actual expected gain is less than 15% of the sale price. The IRS issues these (Form 8288-B) but the process typically takes 90+ days, which complicates closing timelines.

ITIN: Your US Tax ID

To file any US tax return, claim a treaty benefit, or in some cases just open a US bank account, you need a US taxpayer identification number. Foreign individuals who don't qualify for a Social Security Number use an Individual Taxpayer Identification Number (ITIN).

You apply for an ITIN using Form W-7 (Application for IRS Individual Taxpayer Identification Number). The application requires either certified copies of identification documents (typically your passport) or in-person verification through an IRS-authorized Certifying Acceptance Agent (CAA). Most international buyers use a CAA — many Miami real estate attorneys and CPAs serving foreign buyers are CAA-certified, which lets them verify your passport without sending it to the IRS.

Practical timing: ITIN applications take roughly 7–11 weeks to process. You can close on a Miami condo without an ITIN (you don't need one to take title), but you'll need one to file the tax returns associated with the property — and you'll need one as the foreign seller years later when FIRPTA withholding kicks in.

Apply for your ITIN before or alongside your closing. Trying to apply right when you sell to claim a withholding certificate is a common timing failure.

Foreign National Mortgages: Yes, You Can Finance

Many international buyers assume Miami real estate must be purchased in cash. It doesn't. Foreign national mortgages are a well-established product offered by both portfolio lenders (banks that hold the loan themselves) and a handful of specialty mortgage companies focused on international buyers.

Typical terms:

• Down payment: 30–40% of purchase price. Some lenders accept 25% on lower-loan-balance properties with strong borrower profiles; few go above 40% loan-to-value.
• Interest rates: roughly 1–2 percentage points above prevailing US conventional rates. Rates compress when US rates rise (lenders need a smaller foreign-buyer premium to make the math work) and expand in low-rate environments.
• Loan terms: typically 15- or 30-year fixed; ARMs available at lower rates.
• Maximum loan amounts: most foreign national programs cap at $3–5M; jumbo foreign loans exist but are negotiated case-by-case.

You will not be evaluated on a US FICO score (you don't have one). Instead, lenders document creditworthiness through:

• Letters of reference from your primary banking relationship abroad (typically 2–3 banks, ideally including any private banking relationships)
• 12–24 months of bank statements showing income, savings, and reserves
• Employment verification from your employer or, for self-employed buyers, from your accountant
• Tax returns from your home country (most lenders accept the two most recent years)
• Proof of funds for both the down payment and closing costs

Reserves are heavily scrutinized. Lenders typically require 6–12 months of mortgage payments held in liquid US-based accounts after closing. This is a common surprise for buyers who plan to wire down-payment funds at closing and assume that's the end of capital movement.

Where Foreign Buyers Bank in the US

Before mortgage applications, you'll need at least one US bank account. The Bank Secrecy Act requires US banks to verify customer identity (KYC) and document source of funds, which means many large retail banks won't open accounts for non-residents who can't appear in person.

Banks that routinely handle foreign-national clients in Miami include:

• Major international banks with US branches — HSBC, Santander, Banco Itaú USA, Bradesco, BAC Florida (now part of various ownership)
• Private banking arms of major US banks — JPMorgan Private Bank, Citi Private Bank, Bank of America Private Bank — typically minimum relationship sizes from $1M to $10M depending on bank and program
• Local Miami banks with strong international books — City National Bank of Florida, Ocean Bank, Helm Bank USA, Mercantil Bank

Plan to open the US bank account 3–6 months before close. Source-of-funds documentation will be required for any large wire (typically anything above $10,000 triggers a Currency Transaction Report; wires from sanctioned-country origins or unusual structuring trigger additional scrutiny under FinCEN rules).

LLC vs. Personal Title vs. Trust: How to Hold Title

How you hold title materially affects taxes, privacy, liability, and estate exposure. The three common structures for foreign buyers:

Personal Name (Individual Ownership)

The simplest and cheapest structure. You take title in your own name. No formation costs, no separate tax filings, no ongoing maintenance.

The downsides:

• Privacy: title is public record. Anyone can search the Miami-Dade Property Appraiser's database and see you own the property.
• Liability: any lawsuit relating to the property (a guest injury, a contractor dispute) can reach your other US assets.
• Estate tax exposure (this is the big one): a foreign person's estate is subject to US estate tax on their US-situated assets above a $60,000 exemption. That's not a typo. US citizens and residents have a ~$13M exemption; foreign decedents have $60,000. Above that, the top rate climbs to 40%. A $5M Miami condo held in your personal name is, on your death, exposed to roughly $2M of US estate tax unless you've used a treaty provision or restructured.

This is the single most overlooked issue in foreign Miami purchases.

US LLC (Limited Liability Company)

A single-member LLC owned by you personally is the most common middle path. Privacy improves (the LLC name appears on title, not yours, though as of 2024 federal CTA filings make beneficial ownership visible to FinCEN). Liability protection improves. Formation costs $100–500 in Florida; annual maintenance is $138.75 in state fees plus accounting.

A single-member LLC by default is a "disregarded entity" for US tax purposes — meaning the IRS looks through the LLC to you personally. That means the US estate tax exposure does not improve with a single-member LLC (a key trap).

US Corporation or Foreign Corporation Owning a US LLC

To eliminate US estate tax exposure on the property, foreign buyers commonly use a structure where a foreign corporation (in their home country or in a tax-favorable jurisdiction like the British Virgin Islands or Cayman Islands) owns a US LLC which in turn owns the property.

The US LLC owns the property → no direct ownership by an individual. The foreign corporation owns the LLC → no US-situated stock at the individual level. The individual owns the foreign corporation → death triggers no US estate tax on the foreign corporation's stock.

This structure carries setup costs ($2,500–10,000 depending on jurisdiction), ongoing maintenance, additional tax filings (Form 5472 for foreign-owned US disregarded entities), and creates a corporate-level tax layer. The corporate tax cost on rental income is meaningful; the structure is most efficient when the property is primarily a personal residence with limited rental income, or when the property value is high enough that estate tax savings dwarf operating costs.

The general rule of thumb: under $3M of property value, the structuring cost often exceeds expected estate tax savings; above $5M, the structure typically pays for itself.

Florida Land Trust

A Florida-specific structure offering privacy on title (the trust name appears on the deed, not the beneficiaries) without the tax complexity of a corporate structure. Useful for buyers who want privacy and a smooth probate-avoidance mechanism but who handle estate tax planning separately. Land trusts do not by themselves solve the FIRPTA or estate-tax issues.

What Most Sophisticated Foreign Buyers Actually Do

The most common ultra-luxury structure (above $5M, used by Latin American and European family-office buyers) is:

You → Foreign Holding Company (BVI / Cayman / Bahamian) → US LLC → Miami Property

Plus a side revocable trust in your home jurisdiction holding the foreign company stock, to handle local-country succession.

For lower-cost purchases (under $2M) and where estate tax exposure is acceptable as a known cost, individual ownership or single-member LLC is more common.

This is not a decision to make without a cross-border tax attorney who understands both US tax law and your home-country tax law (and any applicable treaty). Get this structure right before closing; restructuring after-the-fact triggers transfer tax events.

FinCEN and Beneficial Ownership Reporting

In 2016 the US Treasury's Financial Crimes Enforcement Network (FinCEN) launched a "Geographic Targeting Order" (GTO) specifically targeting Miami and a handful of other markets to combat money laundering through real estate. The GTO has been renewed and expanded multiple times since. As of 2024, it covers:

• All-cash purchases (no financing) of residential real estate in covered counties (Miami-Dade is included)
• Purchases above $300,000 (the threshold has dropped over time)
• Purchases by legal entities (LLCs, corporations, trusts, partnerships) — direct individual purchases are not covered by the GTO

If your purchase fits these criteria, the title insurance company is required to identify and report the beneficial owner(s) of the purchasing entity to FinCEN. The reporting is not public; it goes to FinCEN for anti-money-laundering screening. It does not create a tax liability. But it does mean you should be prepared to disclose ultimate beneficial ownership at closing.

Separately, the federal Corporate Transparency Act (CTA), effective 2024, requires most US LLCs and corporations to file beneficial ownership information reports with FinCEN. This applies independently of whether the GTO covers your specific transaction. As of mid-2024 legal challenges have complicated CTA enforcement and exact compliance expectations should be confirmed with current counsel at the time of closing.

Source of Funds: Plan This Early

Every large wire into the US for real estate triggers source-of-funds documentation requirements at multiple points:

1. At the receiving US bank when funds arrive
2. At the title insurance company as a closing requirement
3. At the seller's lender's escrow agent if the purchase pays off a foreign-side mortgage

Acceptable documentation typically includes:

• Recent bank statements showing accumulation of funds (typically 3–6 months)
• Sale documents if funds came from sale of another property or asset
• Tax returns showing income
• Inheritance documents if funds came from estate
• Business sale documents if funds came from a liquidity event

The single most common closing delay for foreign buyers is "source of funds documentation is insufficient." Solve this in advance — talk to your US closing attorney 30+ days before close about exactly what documentation will be required for your fund source.

Florida-Specific Considerations

Florida is the most foreign-buyer-friendly state in the US for several reasons:

No state income tax. Your rental income (and your eventual capital gain) faces only federal tax, not state tax. The federal tax can still be significant, but the absence of a state layer is a real ~5–8% savings versus comparable purchases in California or New York.

Homestead exemption reduces property taxes by ~$50,000 of assessed value annually, but requires Florida residency and a Florida driver's license. Foreign buyers who use the property as a second home or investment do not qualify. Your annual property tax is therefore higher than what a Florida-resident neighbor pays for an otherwise identical condo.

Documentary stamp tax on the deed: Florida charges a deed transfer tax of $0.70 per $100 of consideration (effectively 0.7% of the purchase price). On a $5M condo, that's a $35,000 line item at closing. Standard practice in Miami-Dade is buyer-paid; some negotiations split it. Confirm in the contract.

Property tax assessment caps for resident homestead properties under the "Save Our Homes" amendment do not apply to non-homestead properties. Your annual property tax bill can therefore grow significantly faster than a homestead neighbor's. Budget for 1.0–1.3% of market value annually as your effective property tax rate; over time the rate can drift upward.

Insurance: Florida's homeowner insurance market has been under stress for several years (Citizens Property Insurance — the state-backed insurer of last resort — has grown enormously). Premium increases have been substantial. For coastal high-rise condos, the building's master policy covers most exposures and your unit-owner premium is typically modest, but your HOA assessment increases when the master policy renews at higher rates. Build conservative insurance growth assumptions into your hold-period economics.

The Actual Closing Process

Most international closings are remote. Here's the typical sequence for a foreign buyer:

1. Offer and contract. Standard FAR/BAR ("Florida Association of Realtors / Florida Bar") contract, often modified with foreign-buyer-specific addenda for source-of-funds and remote-closing logistics. Negotiate buyer-favorable inspection and financing contingencies.
2. Earnest money deposit. Typically 10% at contract, sometimes split into 5% at contract and 5% after inspection. Wired to the escrow agent (usually the title insurance company).
3. Inspection period. Typically 10–15 days. Conduct via local inspector; you don't need to be present.
4. Title search and commitment. The title insurance company runs the title; your attorney reviews the commitment for defects, restrictions, and survey issues.
5. Source-of-funds documentation gathered. This often runs in parallel and is the longest variable-length step.
6. Power of attorney prepared (if you can't attend closing physically). Drafted by your US attorney; you sign before a notary in your home country with apostille certification (or consular certification for countries not party to the Hague Apostille Convention).
7. Final walk-through by your buyer's agent.
8. Closing. Funds wired to escrow 1–2 days before; closing documents signed (by you remotely via your attorney-in-fact); deed and mortgage (if any) recorded with Miami-Dade County. Possession transfers.

The whole process from accepted offer to closing typically takes 30–45 days for cash purchases and 45–60 days for financed purchases. International logistical complexity sometimes extends the financed timeline further.

After Closing: Property Management and Ongoing Tax Compliance

Two things change after closing:

Property management. If the property is not your primary residence (and as a non-resident foreign owner it generally won't be), you need someone managing it. Options range from full-service property management companies (typically 8–12% of gross rent for managed-rental units; or flat-monthly fee for vacant second homes) to building concierge services in fully-staffed branded buildings (often included in HOA), to handing the property to a trusted family-office or friend network.

Annual US tax filing. You will need to file a US tax return annually for the property:

• Form 1040-NR if you have rental income, even a single dollar of it. The deadline is generally June 15 (delayed from the standard April 15 deadline for individuals abroad with no US wage income).
• Form 5472 if you hold the property through a foreign-owned US disregarded entity. This is a substantial filing — penalties for late or omitted filing start at $25,000.
• State-level filings — Florida has no individual state income tax, so this is typically minimal.

Hire a CPA experienced with international clients before your first tax year ends. The cost (typically $2,000–5,000 annually for a straightforward Miami second-home structure) is meaningfully less than the cost of getting Form 5472 wrong.

Common Mistakes Foreign Buyers Make

After watching many international closings in Miami, the common mistakes cluster around five themes:

1. Ignoring estate tax until the year someone dies. A $5M Miami condo held in personal name will trigger meaningful US estate tax on death. Structure during the purchase, not after a diagnosis.

2. Wiring funds without source-of-funds documentation prepared. Funds get stuck at the receiving bank or title company while documentation is gathered. Delays close by weeks. Solve before the wire.

3. Underestimating ongoing carrying costs. A foreign buyer often models the purchase based on price and HOA but undermodels insurance, property tax (without homestead), property management fees, and US tax-filing fees. Realistic carrying cost for a Miami luxury condo is typically 4–7% of property value annually after HOA and tax.

4. Buying in personal name for "simplicity" and then trying to restructure. Restructuring after closing usually triggers a transfer tax event (Florida documentary stamp tax at minimum, possibly Florida intangible tax, possibly federal gift tax if ownership shifts to family members). Get the structure right at purchase.

5. Treating Miami's pre-construction reservation contracts like home-country pre-construction contracts. The deposit structures, refundability terms, and remedy provisions in Florida pre-construction are specific to Florida law. Have your US attorney read the reservation agreement carefully before the deposit clears.

Frequently Asked Questions

Q: Do I need to be physically in Miami to buy? A: No. The entire process can be handled remotely with a power of attorney. Most ultra-luxury international closings are remote.

Q: Does buying Miami real estate give me a US visa or residency? A: No. Real estate ownership does not confer any US immigration status. The closest visa-by-investment program is EB-5, which requires a much larger qualifying investment in a US business (not residential real estate) and follows a separate immigration process.

Q: Can I rent the property short-term (Airbnb, VRBO)? A: Depends on the building. Many luxury Miami condos have minimum lease terms in their bylaws (commonly 30 days, 60 days, 6 months, or even annually). Some prohibit short-term rentals entirely. A few buildings operate "hotel rental pools" — you can let the building rent your unit short-term and split the revenue with the brand operator. Confirm in the condo declaration before purchase.

Q: What's the difference between a condo and a "condo-hotel"? A: A condo-hotel is a unit where ownership rights are sometimes more limited (typically you can use the unit but the building operates it as a hotel when you aren't there, with revenue sharing). Tax treatment, financing options, and resale liquidity are all different. Many Miami branded residences are pure condos, not condo-hotels; verify the specific structure of any building you're considering.

Q: How is the FIRPTA withholding actually paid at closing? A: When you eventually sell, the buyer's attorney or title company is responsible for withholding 15% (or applicable lower rate) of the gross sale price and remitting it to the IRS via Form 8288 within 20 days of closing. You receive the net proceeds after withholding. You then file Form 1040-NR for the year of sale to reconcile.

Q: I'm a Canadian citizen — does the US-Canada tax treaty change anything? A: Yes, in some respects. The treaty does not eliminate FIRPTA but it does affect estate tax: the US-Canada treaty effectively grants Canadian residents a prorated portion of the US estate tax exemption based on the share of total worldwide assets located in the US. The math typically reduces (but does not eliminate) estate exposure. A US tax attorney experienced with cross-border Canadian clients can run your specific numbers.

Q: I'm buying with my spouse — both of us non-US — should we hold jointly? A: Joint tenancy with right of survivorship between two non-US-citizen spouses doesn't carry the same "unlimited marital deduction" estate tax benefit it does for US-citizen couples. The estate tax on the first death applies to the deceased spouse's share. Tenancy-in-common, joint LLCs, or family-office structures are typically preferable. Structure with counsel.

Q: Can I deduct mortgage interest and property tax on my US tax return? A: If the property generates rental income reported on Form 1040-NR, mortgage interest, property tax, depreciation, repairs, and management fees are deductible against rental income (subject to passive-loss limits). If the property is a personal residence with no rental income, your deduction options are limited. Discuss with a CPA before assuming you'll get the same deductions a US resident would.

Q: What if my home country has a tax treaty with the US? A: Tax treaties cover specific topics — most reduce withholding on certain investment income, some adjust estate tax, very few eliminate FIRPTA. Whether and how a treaty helps depends on your specific country and what aspect of taxation you're trying to optimize. Treaty analysis is highly specific; ask your tax attorney.

Q: My funds are coming from country X — is that going to be a problem? A: Depends on country X. Funds from EU countries, Canada, the UK, and most Latin American countries with established banking systems clear with standard documentation. Funds from countries on FinCEN-elevated-scrutiny lists, OFAC sanctioned-country lists, or countries with weak banking transparency receive significantly more documentation review. Funds with any nexus to sanctioned individuals or entities will not clear and the title insurance company will void the closing.

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If you're considering a Miami purchase, the most important step is engaging a US tax attorney and CPA experienced with cross-border clients before you sign a contract. Structuring decisions made during the offer-to-contract phase are essentially free; restructuring after closing is expensive and sometimes irreversible.

For specific building questions or to start a search, get in touch. For broader context on the Miami luxury market, browse our neighborhood guides and the branded residences guide.