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 residential markets in the world, and buying here as a foreign national is genuinely straightforward. There is no restriction on foreign ownership of Florida real estate, no residency requirement, no special permission to obtain. Buyers from Latin America, Europe, Canada and the Middle East transact here every week without difficulty.

The purchase is the easy part. Two other moments are not, and both of them arrive long after closing, when the flexibility to do anything about them has gone. One is the sale. The other is death. Understanding both before you buy costs you nothing. Discovering them afterwards can cost a great deal.

Rule one: FIRPTA, and the withholding at sale

The Foreign Investment in Real Property Tax Act requires that when a foreign person sells US real property, the buyer withholds a percentage of the gross sale price and remits it to the IRS.

Note the two words that matter: gross, and buyer. The withholding is calculated on the sale price, not on your profit, and the obligation falls on the purchaser, who becomes a withholding agent with personal liability for getting it right.

The standard rate is 15 percent of the gross sales price. On a $6 million sale, that is $900,000 leaving the closing table and going to the IRS, entirely irrespective of whether you made money on the property. There are reduced-rate exceptions where the buyer is acquiring the property as a residence and the price falls within specified bands, but 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. It is a deposit against your eventual liability, and once you file a US non-resident return the excess is refunded. But refunds take time, often many months, and in the meantime a very large amount of your equity is sitting with the US Treasury rather than funding whatever you intended to do next.

There is a remedy, and it is chronically underused. Form 8288-B allows an application for a withholding certificate before or at closing, reducing the withholding to your actual estimated liability, or to nothing if you are selling at a loss. IRS processing takes months, which means the application has to be started well ahead of the closing date rather than in the final fortnight. Sellers who plan this properly keep their money. Sellers who do not, lend it to the government interest-free for the better part of a year.

Florida itself imposes no state-level withholding, since there is no state income tax. Sellers of property in New York, California or Hawaii face an additional state regime layered on top of FIRPTA. Here, FIRPTA is the whole of it.

Rule two: the $60,000 problem

This is the one that produces real damage, and it is startlingly little known among buyers who are otherwise very well advised.

When a US citizen dies owning US real estate, their estate benefits from a federal exemption that stands at $15 million for 2026 under current law, indexed annually. Estates below that threshold pay no federal estate tax.

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

That is not a typographical error, and the two figures are not close. The rate above the exemption reaches 40 percent. On a $10 million Miami residence held personally by a foreign national who dies unexpectedly, the exposure is measured in millions of dollars, payable to the IRS, against an asset the family may not wish to sell and may not be able to sell quickly.

Two further points make it worse. US real estate is US-situs property regardless of where the owner lives or where the money came from. And holding the property through a US LLC does not solve the problem, because the LLC’s interest is generally still treated as US-situs for these purposes. A great many foreign buyers form a Florida LLC believing it addresses estate exposure. It addresses liability. It does not address this.

Estate tax treaties exist between the United States and a limited number of countries and can substantially alter the analysis. Whether one applies to you depends on your nationality and domicile, it is among the first questions a competent adviser will ask.

What structures actually do

There is no single correct structure, and anyone who offers one without asking questions is selling something rather than advising.

The classic approach to the estate exposure involves interposing a non-US entity, on the basis that shares in a foreign corporation are not themselves US-situs assets. This can be effective, and it carries real costs: US corporate income tax on net income, withholding on distributions to foreign shareholders unless reduced by treaty, FIRPTA still applying when the corporation sells the underlying property, and annual administration and compliance obligations in two jurisdictions. Various trust structures and, in some cases, life insurance solutions are used to address the same exposure differently.

Rental income has its own treatment. Income paid to a non-resident alien is subject to withholding on the gross amount by default, which ignores your mortgage interest, your taxes, your insurance and your management costs. An election under section 871(d) moves you to taxation on net income at graduated rates, which for a Miami property carrying the insurance and tax costs discussed elsewhere on this site is usually dramatically better. It is an election, which means someone has to make it.

The right questions to put to your advisers are these. What does each candidate structure do at the level of US income tax, US estate tax, my home-country tax and the state level? What does it cost annually to maintain? What happens on a sale? And what does the computation look like on my death if I intend to leave this property to my children or to a non-citizen spouse?

Do this before you close, not after

The recurring theme is timing. Almost every one of these issues is manageable, sometimes very easily, if it is addressed before title is taken. Almost every one becomes harder, more expensive or impossible once the deed is recorded in the wrong name.

Restructuring ownership after closing can trigger transfer taxes, lender consent problems, documentary stamp obligations and, occasionally, a taxable event. The window in which structuring is cheap and flexible is the period between choosing a property and closing on it. That window is typically thirty to sixty days, and it closes permanently.

Assemble the team early: a US tax adviser familiar with cross-border ownership, an adviser in your home jurisdiction who can address the interaction with local tax, and a Florida real estate attorney. If you are financing, add a lender experienced with foreign national loans, which have their own documentation requirements and typically expect a larger deposit than a domestic buyer would put down.

One practical detail worth flagging: you will likely need a US taxpayer identification number at some point in this process, and obtaining one takes time. Start it early rather than discovering the requirement at an inconvenient moment.

None of this should discourage you

Miami rewards international owners, and it has done so for decades. Florida imposes no state income tax and no state estate tax, property rights are strong and clearly enforced, title insurance is standard, and the transactional infrastructure here is more experienced with cross-border buyers than almost anywhere else in the country. The rules described above are not obstacles. They are simply rules that have to be planned around rather than discovered.

The buyers who have difficulty are, almost without exception, the ones who treated the purchase as a purchase and left the structuring to be sorted out later. The ones who have no difficulty involved their advisers before they made an offer.

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

This article is general information, not tax or legal advice. Cross-border tax rules are highly fact-specific, treaty positions vary by nationality, and thresholds change. Consult qualified US and home-jurisdiction advisers before acquiring US property.