Property Tax in Miami-Dade
Annual tax based on assessed value. Effective rate: 1.5-2%. A $500K property pays $7,500-$10,000/year. The Homestead Exemption ($50K off) only applies to primary residents — foreign investors don't qualify.
FIRPTA at Sale
Buyer withholds 15% of gross sale price when purchasing from a foreign seller. Actual tax on net gain calculated at filing. Difference refunded via 1040NR. Exceptions: sale under $300K to buyer using as primary residence.
Rental Income Tax
Foreign owners file Form 1040NR annually. Standard withholding 30% of gross rent unless reduced by tax treaty. Most elect to be taxed on net income at graduated US rates.
Documentary Stamp Tax: The Transfer Tax You'll Pay at Closing
When you purchase real estate in Florida, you pay the Documentary Stamp Tax on the deed at a rate of $0.70 per $100 of the purchase price. On a $500,000 purchase, this amounts to $3,500. If you finance the purchase with a mortgage, you also pay a stamp on the promissory note ($0.35 per $100 of loan amount) plus the Intangible Tax ($0.002 per dollar of loan amount).
Annual Property Tax: What to Expect
Florida's annual property tax is based on the assessed value set by the county property appraiser. In Miami-Dade County, effective rates average 1.5-2% of assessed value. For a $600,000 property, expect $9,000-$12,000 per year. The first year after purchase, the assessed value is typically reset to the purchase price, so the first-year tax bill reflects the actual market value. After that, the "Save Our Homes" cap limits annual increases to the lesser of 3% or the Consumer Price Index — but only for homesteaded properties owned by Florida residents.
FIRPTA: The Withholding Tax When You Sell
FIRPTA (Foreign Investment in Real Property Tax Act) requires the buyer to withhold 15% of the gross sale price when a foreign person sells U.S. real estate. This withholding goes to the IRS as a prepayment of capital gains tax. When you sell your Miami property in the future, your buyer will retain 15% of the sale price. If your actual capital gains tax is less than 15%, you can recover the difference by filing a U.S. non-resident tax return (Form 1040-NR).
Capital Gains Tax for Foreign Property Owners
When you sell your Miami property, the profit (sale price minus purchase price and capital improvements) is subject to U.S. capital gains tax. For non-residents holding property over one year (long-term), the federal rate is 30% on the net gain. However, you can reduce your taxable gain by documenting all capital improvements (renovations, upgrades) and deducting selling costs. A CPA specializing in non-resident taxation can help minimize your tax liability legally.
Rental Income Taxes for Foreign Owners
If your Miami property generates rental income, you must file an annual U.S. tax return reporting that income. Foreign owners have two options: (1) treat rental income as effectively connected with a U.S. trade or business and pay taxes at graduated rates on net income after deductions (highly recommended), or (2) subject it to a flat 30% withholding on gross rent with no deductions allowed. Option 1 is almost always more favorable because you can deduct HOA fees, insurance, property taxes, mortgage interest, depreciation, and management fees — often reducing your net taxable rental income significantly.
Sales Tax on Short-Term Rentals
Florida imposes sales tax on residential rentals shorter than 6 months. In Miami-Dade, this totals approximately 13%: 6% Florida State Sales Tax + 6% Tourist Development Tax + 1% County Surtax. Platforms like Airbnb collect and remit these taxes automatically in Miami, but you must register as a rental property business with the Florida Department of Revenue. For annual leases (6+ months), no sales tax applies.
Tax Planning Strategies for Foreign Investors
- Obtain an ITIN (Individual Taxpayer Identification Number) — required to file U.S. tax returns as a non-resident
- Keep meticulous records of all capital improvements to maximize your cost basis
- Consult a CPA specializing in international real estate before buying — structure matters from day one
- If you plan to sell and reinvest, explore the 1031 Exchange to defer capital gains tax
- Consider the Estate Tax implications: foreign non-residents are only exempt from U.S. estate tax on the first $60,000 of U.S.-sited assets
Working With a CPA: The Most Important Tax Decision You'll Make
The U.S. tax system for foreign real estate investors is complex, but it is also transparent and manageable with the right guidance. The single most impactful step you can take as a foreign property owner is to establish a relationship with a CPA who specializes in international real estate taxation before making your purchase — not after. A proactive tax strategy can save you $10,000-$50,000+ over the course of a 5-10 year investment horizon through optimal structuring, depreciation strategies, and efficient capital gains management.
Miami has a robust community of CPAs who specialize in non-resident investors from Latin America, many of whom are bilingual and understand both U.S. and Latin American tax systems. Our team connects buyers with vetted tax professionals as part of our comprehensive advisory process. The goal is not just to help you buy a great property in Miami, but to ensure your investment generates the maximum net return after all tax obligations are properly managed.
Year-Round Tax Calendar for Foreign Property Owners
Managing tax compliance as a foreign property owner in Miami follows an annual calendar. January-March: receive your Form 1099 from your property manager reporting rental income paid in the previous year. April 15: U.S. tax return deadline for those with U.S. income sources (June 15 for those with no U.S. income). May 1: Florida LLC Annual Report due at sunbiz.org ($138.75). July-September: review mid-year rental income and estimate quarterly tax payments if required. November-December: year-end tax planning with your CPA — assess whether any capital improvements, expenses, or strategies should be implemented before December 31. Following this calendar with your CPA keeps your compliance current and avoids penalties. The IRS is generally lenient with first-time foreign filers who make good-faith efforts to comply, but penalties for willful non-compliance can be severe.
The bottom line for foreign property owners in Miami: taxes are real, manageable, and far outweighed by the investment returns that Miami properties have historically generated. With proactive planning, the right team, and proper documentation, your tax burden as a foreign investor in Miami will be predictable and legally minimized. Start the process correctly by consulting a CPA before you purchase. Our team connects buyers with the best bilingual tax professionals in Miami as part of our comprehensive advisory service.
Tax management as a foreign Miami property owner rewards preparation over reaction. The investors who build the most successful Miami portfolios are those who establish their tax framework — CPA, entity structure, ITIN, and annual filing calendar — in the first year of ownership and maintain it consistently thereafter. The reward for this discipline is a predictable, optimized tax situation that allows you to focus on what matters: growing your Miami real estate portfolio.
