About our international practice
Fun Fact!
Our firm has clients located in 70 countries all over the world!
FOREIGN NATIONALS
Are you a foreign national that is interested in purchasing property within the US for rental purposes? If so, here are some forms, information, and terms you may want to be familiar with during the process.
Please note:
The US tax year runs from January 1 through December 31
Typical types of taxes
Income Tax
Income tax is tax that is assessed by the US Federal Government on all income that is produced during the tax year. You file and pay these taxes with your Federal Tax Return (1040NR) which is due June 15th and can be extended to December 15th with a timely filed extension. Some areas of the US also have State and/or City income taxes where you must file a State/City tax return and pay any applicable taxes. The State of Florida does not have State or City income taxes. The income tax is where all of your rental expenses are deducted from as well.
Real Estate / Property Tax
A County tax based on the assessed value of the building and/or land you own. In Florida, Real Estate Taxes also offer a discount for early payment, which include discounts of: 4% if paid in November, 3% if paid in December, 2% if paid in January, 1% if paid in February, and 0% if paid in March. If the taxes are paid after March, a late fee may be applied.
Tangible Tax
This tax is based on the assessed value of tangible assets you have in your property. Tangible assets consist of items such as furniture, fixtures, appliances, etc. and do not include buildings or vehicles. If the value of your tangible assets is under $25,000 and the property is located in the State of Florida, you will be exempt from paying tangible taxes if you file a tangible tax return showing that you own less than $25,000 of tangible assets. Once you become exempt, you will no longer need to file a tangible tax return and pay tangible taxes until such time where your tangible assets increase over the $25,000 threshold.
Note: If you own multiple units in the same association, the assessed value of the units within the same association may be combined.
Sales & Tourist Development Taxes
In the State of Florida, sales tax and tourist development tax are only paid on rental income from short-term rentals (stays lasting less than 6 months). These taxes are typically deducted from your income and paid by your management company on a monthly basis. If you use a booking agent such as Airbnb, VRBO, etc., please be aware of what taxes they are collecting and remitting on your behalf, if any, as you may need to pay one or both of these yourself, which may require you to set up a tax account with the State of Florida and/or the County where the property is located.