About a third of my transactions in any given year involve buyers from outside the United States. Miami draws foreign buyers from Latin America, Europe, and beyond. No state income tax, strong rental potential, a vibrant lifestyle, and the fact that Miami is a genuinely global city where owning real estate feels like participating in something larger than a single address.
But buying property as a foreign national in Florida is more complex than buying as a U.S. citizen. There are tax obligations, financing hurdles, and structural decisions that affect your ownership for years. Here's what first-time foreign buyers of Miami real estate need to know before they start.
FIRPTA: The Tax Withholding Most Buyers Don't Expect
FIRPTA stands for the Foreign Investment in Real Property Tax Act. It's a federal law requiring buyers of U.S. real property from foreign sellers to withhold a portion of the sale proceeds and remit it to the IRS. If you're buying from a U.S. citizen seller, this doesn't apply to your purchase. But understanding FIRPTA matters for two reasons: it can affect the seller's side of your transaction, and it will absolutely apply to you when you eventually sell.
Current FIRPTA withholding for foreign sellers: 15% of the gross sale price on properties selling for over $1 million. On a $1.5 million sale, that's $225,000 withheld from the seller's proceeds at closing and sent to the IRS. The seller can apply for a reduced withholding certificate if their actual tax liability is lower, but that process has to be initiated before or during the transaction and takes time.
When you sell your Miami property as a foreign national, this is the withholding that will apply to your proceeds. Plan for it now. The IRS has detailed guidance at irs.gov/businesses/corporations/firpta-withholding.
ITIN: You Need One Before You Close
U.S. citizens use Social Security numbers for tax identification. Foreign nationals who don't have a Social Security number need an Individual Taxpayer Identification Number from the IRS. An ITIN is required for filing federal tax returns, claiming tax treaty benefits, certain U.S. bank account openings, and FIRPTA compliance.
Getting an ITIN through the standard IRS mail process takes 7 to 11 weeks. Certifying Acceptance Agents can process applications faster. If you're serious about buying in Miami, start the ITIN process before you're under contract on a property. Buyers who try to obtain an ITIN after signing a purchase agreement sometimes find the paperwork delay pushes their closing date.
Financing: Foreign National Loans vs. Cash
The majority of international buyers I work with pay cash, at least for initial purchases. This is partly preference and partly necessity. Standard U.S. conventional mortgages backed by Fannie Mae or Freddie Mac are not available to buyers without U.S. permanent residency or citizenship.
That doesn't mean financing is impossible. Foreign national loan programs exist through certain portfolio lenders and private banks. Here's what they typically look like:
- Down payment of 30% to 40% is standard, sometimes higher depending on the lender and property type.
- Interest rates run 1 to 2 percentage points above standard U.S. rates.
- Lenders want to see 12 to 24 months of documented liquid reserves in addition to the down payment.
- Some require a U.S. bank account established before the application.
- Condo purchases must be in lender-approved buildings. Many foreign national lenders have their own approved lists that differ from Fannie Mae's standard warrantable condo list.
The process takes longer than a standard U.S. mortgage, often 45 to 60 days or more. If you're financing, get pre-approved with a foreign national lender before you start seriously touring properties.
Cash-to-Close: The Wire Transfer Timing Problem
For buyers paying cash, getting money to the title company for closing deserves serious attention. International wire transfers take time, and Miami title companies have strict protocols about when funds need to arrive and clear before closing proceeds.
Standard practice in Miami: wire funds arrive one business day before the scheduled closing date. For international transfers, add more buffer. A wire initiated from a Latin American or European bank on a Monday may not clear into a U.S. title company's account until Thursday or Friday, depending on intermediary banks, currency conversion steps, and compliance reviews.
I've seen cash closings delayed by 24 to 48 hours simply because the buyer's bank took longer than expected. The solution is to initiate the transfer at least three business days before closing for a typical international wire, and to confirm with your bank that it's been sent, then confirm with the title company that it's been received. Don't assume. Confirm.
LLC Structure: Why It Matters More Than You Think
A significant portion of my international buyer clients purchase through a U.S. LLC rather than in their personal names. There are real reasons to consider this approach:
- Liability protection. A properly maintained LLC separates personal assets from real property liability.
- Privacy. Florida does not require LLC members to be publicly disclosed. Some buyers value this.
- Estate planning. Holding U.S. real property in an LLC can simplify foreign estate planning, though this needs to be structured carefully with an attorney who understands cross-border issues.
- FIRPTA treatment. LLC ownership changes how FIRPTA withholding is applied and reported, which is another reason to get qualified tax advice before deciding on a structure.
If you're buying through an LLC, the entity needs to be formed and registered in Florida before closing. This typically takes 1 to 2 weeks. A Florida registered agent is required. And the LLC needs its own Employer Identification Number from the IRS for tax purposes.
Not every foreign buyer needs an LLC. Some transactions are cleaner in personal names, especially for smaller purchases or straightforward tax situations. A U.S. real estate attorney and a cross-border tax advisor together can tell you which structure fits your situation. I can refer you to professionals I've worked with on these transactions.
Form 5472 and Annual Reporting
If you hold U.S. real property through a U.S. LLC with a foreign owner, the LLC may be required to file Form 5472 with its federal tax return each year. This is an information return reporting transactions between the LLC and its foreign members. Penalties for failure to file are significant: $25,000 per form per year.
Most international buyers who own through LLCs work with a U.S. CPA who handles annual compliance. If you don't have one, get one before you close on the property. The cost of proper tax compliance is small relative to the penalties for ignoring it.
Realistic Timeline Expectations
Buyers from outside the U.S. should plan for a longer purchasing process than domestic buyers typically expect:
- ITIN application: 7 to 11 weeks from submission
- Foreign national loan approval (if financing): 45 to 60 days from a complete application package
- LLC formation and EIN: 2 to 3 weeks
- Contract to closing on a cash purchase: 30 to 45 days
- Contract to closing with foreign national financing: 45 to 60 days
Start the administrative pieces before you're in a hurry to close on a specific property. The buyers who run into problems are the ones who find a property they love and then discover they need eight more weeks of paperwork before they can close. By then, another buyer has often come along.
Miami is genuinely one of the world's best cities for international real estate ownership. It's worth doing right. If you have questions about the process, reach out and let's have a real conversation. If you're ready to start looking, begin your search here or explore Brickell and other neighborhoods where international buyers most often focus.