Buying Miami Property as a Foreign National: The Two Rules Nobody Explains Until It’s Too Late

August 15, 2026

Miami is one of the most internationally owned housing markets in the world. For a foreign national, buying property in Miami is surprisingly simple. Florida places no limits on foreign ownership of real estate. There is no residency requirement and no special permission to obtain. In fact, buyers from Latin America, Europe, Canada and the Middle East close deals here every week without difficulty.

The purchase is the easy part. Two other moments are harder, and both arrive long after closing, when it is too late to change much. One is the sale. The other is death. Understanding both before you buy costs you nothing. Discovering them afterwards, on the other hand, can cost a great deal.

Rule one: FIRPTA, and the withholding at sale

The Foreign Investment in Real Property Tax Act, or FIRPTA, applies when a foreign person sells US real property. Under this law, the buyer must hold back a share of the gross sale price and send it to the IRS.

Notice the two words that matter: gross, and buyer. First, the IRS calculates the withholding on the sale price, not on your profit. Second, the duty falls on the purchaser. As a result, the buyer becomes a withholding agent with personal liability for getting it right.

How much is withheld

The standard rate is 15 percent of the gross sales price. On a $6 million sale, that means $900,000 leaves the closing table and goes to the IRS. It makes no difference whether you made money on the property.

There are reduced rates when the buyer will live in the home and the price falls within certain bands. However, the highest of those bands tops out at $1 million. So at Miami’s upper end, the full 15 percent typically applies.

The withheld sum is not a tax. Rather, it is a deposit against your final liability. Once you file a US non-resident return, the IRS refunds the excess. But refunds take time, often many months. Meanwhile, a large share of your equity sits with the US Treasury instead of funding your next move.

The remedy most sellers miss

There is a fix, yet few sellers use it. Form 8288-B lets you apply for a withholding certificate before or at closing. This can cut the withholding to your actual estimated tax, or to zero if you are selling at a loss.

The catch is timing. The IRS takes months to process these forms, so you have to start well before closing, not in the final two weeks. Sellers who plan ahead keep their money. Sellers who do not end up lending it to the government, interest-free, for most of a year.

Florida itself adds no state withholding, since the state has no income tax. By contrast, sellers in New York, California or Hawaii face an extra state layer on top of FIRPTA. Here, FIRPTA is the whole story.

Rule two: the $60,000 problem

This rule does the real damage. Surprisingly, few buyers know about it, even those who are otherwise very well advised.

When a US citizen dies owning US real estate, their estate gets a federal exemption. Under current law, that exemption stands at $15 million for 2026, and it rises with inflation each year. Estates below that level pay no federal estate tax.

When a non-resident alien dies owning US property, the exemption is just $60,000.

That is not a typo, and the two figures are not close. Above the exemption, the rate reaches 40 percent. Picture a $10 million Miami home held personally by a foreign national who dies suddenly. The tax bill could run into the millions. Worse, the family may not want to sell the home, and they may not be able to sell it quickly.

Why an LLC does not solve it

Two more points make it worse. First, US real estate counts as US property no matter where the owner lives or where the money came from. Second, a US LLC does not fix the problem. The IRS generally still treats the LLC interest as US property for estate tax purposes.

Many foreign buyers form a Florida LLC because they think it covers estate exposure. It covers liability. It does not cover this.

The United States has estate tax treaties with a small number of countries. These treaties can change the picture a great deal. Whether one applies to you depends on your nationality and domicile. For that reason, it is one of the first questions a good adviser will ask.

What structures actually do

There is no single correct structure. Anyone who offers one without asking questions is selling something, not advising.

Foreign corporations, trusts and insurance

The classic approach places a non-US company between you and the property. The logic is that shares in a foreign corporation are not US assets. This can work well. Still, it carries real costs:

• US corporate income tax on net income
• Withholding on payouts to foreign shareholders, unless a treaty reduces it
• FIRPTA, which still applies when the corporation sells the property
• Yearly paperwork and compliance in two countries

Alternatively, some owners use trust structures or, in some cases, life insurance to address the same risk in a different way.

Rental income

Rental income follows its own rules. By default, rent paid to a non-resident alien faces withholding on the gross amount. That ignores your mortgage interest, taxes, insurance and management costs.

An election under section 871(d) changes this. It lets you pay tax on net income at graduated rates instead. For a Miami property with high insurance and tax costs, that is usually far better. But it is an election, so someone has to actually make it.

Questions to ask your advisers

• What does each structure do for US income tax, US estate tax, home-country tax and state tax?
• How much does it cost each year to maintain?
• What happens when I sell?
• What happens at my death if I plan to leave this home to my children or to a non-citizen spouse?

Do this before you close, not after

The common thread is timing. You can manage almost all of these issues, often easily, if you address them before you take title. However, almost every one becomes harder, costlier or impossible once the deed is in the wrong name.

Changing ownership after closing can trigger transfer taxes, lender consent problems and documentary stamp taxes. Occasionally, it can even create a taxable event. The cheap, flexible window for planning runs from the day you choose a property to the day you close. That window typically lasts thirty to sixty days, and then it shuts for good.

Build your team early

• A US tax adviser who knows cross-border ownership
• An adviser in your home country who understands how local tax interacts with US rules
• A Florida real estate attorney
• If you are financing, a lender experienced with foreign national loans

Foreign national loans come with their own paperwork. Lenders also typically expect a larger down payment than they would from a domestic buyer.

One more practical tip: you will likely need a US taxpayer identification number at some point. Getting one takes time, so start early rather than finding out at an awkward moment.

None of this should discourage you

Miami rewards international owners, and it has for decades. Florida has no state income tax and no state estate tax. Property rights are strong and clearly enforced, and title insurance is standard. Moreover, the local real estate industry has more experience with cross-border buyers than almost anywhere else in the country.

The rules above are not obstacles. They are simply rules you need to plan around rather than discover later.

The buyers who run into trouble are almost always the ones who treated the purchase as just a purchase. They left the structuring for later. By contrast, the buyers who have no trouble brought in their advisers before they made an offer.

Chris King works regularly with international buyers. We coordinate with cross-border tax counsel and Florida attorneys, so you settle the ownership question before closing rather than revisiting it afterwards. If you are considering a Miami purchase from abroad, we would be glad to help you build the right team at the right time.

This article is general information, not tax or legal advice. Cross-border tax rules depend heavily on the facts, treaty positions vary by nationality, and thresholds change. Consult qualified US and home-country advisers before buying US property.