Newsletter FAQs for the process to purchase a property in the US.
Can anyone buy a property in USA?
Yes, there is no legal impediment to acquire a property in the US. Anyone with tourist visa (B1 / B2) can buy a property. Furthermore, no special type of visa is necessary to buy a property.
Look for a professional help – Realtor.
That is the first step. Do not try to do all by yourself, you won’t end up doing the best deal.
How is the commission payment to realtors in a transaction in Miami, Florida?
The commission is always paid by the seller or the owner of the property. In new constructions, the commissions are paid by the developer.
Can I work with multiple realtors?
Very common in other countries, this practice is badly seen in the United States. Unlike other countries, all properties available in the market are in a database called the Multiple Listing Service (MLS), where all licensed realtors have access, allowing all proposals to be analyzed. The Real Estate market in Miami is an open market where all realtors use the same system. What differentiates one realtor to another is the service and the experience of each. Our brokers are trained to provide the best service, respecting the expectations of each client.
What are the main reasons international buyers want to invest in Real Estate in Miami?
There are many reasons, which we include:
- Foreigners love Florida, especially Miami and Orlando;
- The beauty of cities, organization, pleasant weather, tourist attractions, etc;
- Property prices are very attractive;
- Possibility of real estate financing with low interest rates;
- High prices in real estate in other countries;
- Stable economy;
- Dollar be a strong and valued currency.
In addition to the reasons mentioned above, there are three main purposes, which made a person look for buy a property in the US. They are: investment, residence and vacation home. This definition is very important because there are certain specific areas for each type of acquisition, our realtors will send the best options on the market according to your specifications. Once you have identified the property, the buyer must make a formal offer, which is necessarily made through a written agreement of purchase and sale.
Do I need a bank account in Florida to buy Real Estate in Miami?
This will help a lot because remittances between same ownership accounts exempt translations and other bureaucracies in some countries. In this case, foreign banks just will ask for proof of origin of the money. If the option is to buy a property with financing, banks require a bank account in the United States.
What documents are necessary to open a bank account in Miami?
The process is generally very simple but can vary according to each bank. Generally, the required documents are:
– Proof of residence (can be in their home country)
– Valid visa in the US
Will the bank charge for maintenance fee?
Each bank has their fee policy. Some banks do not charge any fee if the bank account has a minimum balance. It depends on the bank you will choose.
How do I buy dollars and send to the United States?
To buy properties. Just go to your bank where the money is deposited, and negotiate the purchase of dollars from the Foreign Exchange Bureau of the bank. Some relationship managers do this for you. In some countries, there is NO limit to purchase/shipment dollars for this purpose. If you need advice, you can still count on our team of experts. We work with a partner company that will assist you from beginning to end the process.
Can a foreign finance a property?
Yes. Today there are banks that finance up to 70% of the value for houses, and 65% for apartments.
What is the difference between buying a property with financing or cash?
– Low Interest rates (between 5-6% per year).
– Credit approval facility for foreigners.
– Financed value must be for a minimum US $ 200,000. (According to our experience, we have seen that most banks hardly finance values less than $ 200,000.)
– Normally requires the presence of the purchaser in the USA.
– Bank must review and approve the purchase.
– Business Completion in a period between 45-60 days.
– Many cases require a broker to finance the preparation / approval of documents (additional average cost of 1-2% of the loan amount).
– Short-term business conclusion: 15-30 days.
– Higher negotiation power in opportunities.
– No additional costs (taxes and bank fees) in the property records.
– Purchase can be done in your country.
– Need total resource availability.
What are the documentation necessary to finance a property in Florida?
– Passport Page copy that has the photo and entry visa;
– Copy of other valid photo ID;
-Proof of address;
– Company’s website (if applicable);
– Letter from the employer, proving bond of 2 years or more;
– Tax ID for legal entities;
– 2 bank letters of reference;
– Personal income tax return (or Accountant statement);
– 2 paychecks or Accountant statement;
– A bank statement for the last 3 months.
Should the documents for Real Estate financing in Miami be in English?
Yes. The documents must be translated into English. Some banks have teams that speaks your language and can help you with the preparation of the documents. We indicate professional partners that can assist you during the whole process.
What is the percentage of down payment to buy a property financed?
The purchase of a property can be made in cash or financed by an American bank with a down payment that can range from 30% to 50% (all depends on the bank which will provide the financing and the property type).
Can I finance property of any value?
No. Today, the minimum value of the real estate financing in Miami should be US $200,000.00. In other words, the minimum value of the property purchased must be US $308,000 as the maximum amount to be financed is 65% of the property value. You can get up to $ 5 million depending on the property and customer qualification. With the entry of new banks in this market, this rule can be relaxed.
What are the interest rates for real estate financing in Miami?
Basically, there are 3 types of financing in Miami:
– 30 years fixed: Fixed installments for 30 years. average interest of 6.5%;
– 15 years fixed: Fixed installments for 15 years. average interest of 5.75%;
– 30 years / 5 MRA. Fixed installments within the first 5 years. average interest rate of 5%. Adjusted annually from the 6th year, according to the variation of the basic interest rate. For protection of the parties, the contract establishes a minimum (3.5%) and maximum (9.5%) for the variation. Actual values are defined by your bank at the date of the mortgage contract.
What is the amortization system for real estate financing in Miami?
The large majority of banks adopt the Constant Installment System (PRICE). In this system, the share is fixed throughout the financing period. As property taxes and homeowner’s insurance will be included in the provision, these two items may cause slight variations in the installments.
Can I pay off the finance at any time?
Yes. Most banks allow foreigners to pay off the debt at any time without penalty, but this is an issue to be discussed before finalizing the process with a bank.
What taxes and fees are paid on the property in Miami, Florida?
Property tax (approximately 1.8% of property value);
Capital gain (15% of the real estate profit upon sale);
Several condos in Florida still charge CDD (Community Development District) for a fixed or indefinite period.
Can any property be rented seasonal in Miami?
No. Some condos restrict owners to rent for only certain times a year. Minimum of 6 months or a minimum of three months is quite common, especially in Miami Beach and Miami.
How much can I expect of income property with the rent?
This is a very difficult answer because the numbers can vary dramatically from one property to another. Some businesses already have statistics on how much investment will net a year. It depends on the type of property you will choose. Our expert realtors will assist you in finding the best investment, respecting their expectations and needs.
What would be my monthly and annual expenses with my property in Miami?
Some expenses do not apply to apartments, only to houses *
– Property Tax :
A maximum of 1.8% of the property value, paid on 31 / March next year to competence. Payment can be anticipated within 4 months, 1% discount per month.
– Condominium fee:
- Simple Condos: between $ 250.00 and $ 500.00 / month
- Condos Resort Style (Full Recreation Structure): Between $ 500.00 and $ 2,000.00 / month, depends on the level of service provided and property size. Most already includes cable TV, Internet and security.
Cable TV, internet and telephone:
Combo: estimated to be $ 200.00 / month. To hire only telephone or internet the cost is between $ 30.00 and $ 80.00. * (Sometimes is included in the condominium)
Between $ 30 and $ 250 (depending on whether irrigation is the house or condo). Usually already included in condominiums.
Between $ 50 and $ 300. New houses are more efficient. (All depends on the property size, air conditioning use, usually the bill comes lower in winter)
Between $ 15.00 and $ 20.00 per month. Protects against insects typical of Florida.
Between $ 60.00 and $ 150.00 depending on the size of the pool. Sometimes it is included in the management fee. (Does not apply to apartments, houses only *)
Usually included in the condo fee. If not, cost between $ 80.00 and $ 100.00. (Does not apply to apartments, houses only *)
Alarm system and home automation:
Between $ 50.00 and $ 100.00, depends on the level of service (does not apply to apartments, houses only *).
Who is responsible for paying property tax and condo fee of a leased property?
In residential leases, the owner is always responsible for property taxes, condominium fee and maintenance of the property – it’s up to the owner to repair air-conditioning, water heater, hydraulic, electrical and all that is essential to the building housing. Therefore, the owner must design these expenses and incorporate them to the nominal value of the rent.
In commercial leases, can be made a Net Lease, where the tenant is responsible for all the above rates.
What is the advantage of buying property in Miami in name of a Legal Person?
Many foreigners buy Real Estate in Miami on behalf of family businesses. This makes it simple to transfer shares between the partners / owners and can avoid / reduce taxation on Cause-Mortis tax. Also, many people choose to buy Real Estate in name of a Legal Person to maintain the confidentiality and security because here in Florida addresses and owner’s names are public records and anyone can have access.
How much will I pay for Causa-Mortis Tax?
The state of Florida does not charge transfer tax when there is a death of one or more owners but it can occur at the federal level. Each international owner has exemption of US $ 60,000, thereafter, the tax varies between 18% and 40%. This is a complex matter and full of exceptions, so you should consult an accountant or tax lawyer to have more details. We work in partnership with these professionals and we can put you in touch with them.
Can a single property have multiple owners?
Yes. They can be relatives or not. There is no limit owners in deed. In case of financed property, the income of all will be added for the finance approval effect.
How is the real estate financing approval in Miami for the elderly?
Since 1974, a federal statute (ECOA) prohibits discrimination in lending based on race, color, religion, national origin, sex, marital status or age. Therefore, the elderly and other classes have the same opportunities as others to buy real estate in Miami.
Will the loan be paid off in case of death of the borrower?
No. Unlike some other countries, the bank does not require hiring a life insurance to pay off the financing. But nothing prevents you to do it on your own.
Can I finance a property in the name of a Legal Person?
Usually not. Banks that finance for foreigners demand that the funding be in the name of Natural Person. But the property ownership can be done in a Legal Person. If you have a business credit history in the United States, it becomes eligible for financing.
What are the taxes paid on the sale of my property?
You pay only 15% on the capital gain, in other words, on the profit. If the alien does not reside in the US, the Internal Revenue Service will retain 15% of the sale until the foreign certifying the payment of taxes due. Usually within 90 days, this amount is released to the seller.
What are the costs to open a company in Florida?
On average, accountants or lawyers charge between $ 500.00 and $ 1,000,00 to open a company (LLC).
Can I open a company without the help of an accountant or lawyer?
In theory, yes. However, an EIN Number will be required for most companies formed. If the partners do not have Social Security Number, they need a third party (lawyer or accountant) authorized to apply for registration.
What are the annual costs of an investment company?
Most Companies Limited Liability (LLCs) has only two annual obligations: Deliver the Declaration of Corporate Income Tax (from January to April and costs an average of $ 250.00) and renew the Annual Report by the State of Florida (between January and May and costs $ 125.00).
Who can be a member in the American company?
May be members of a company in Florida the Foreign Natural Persons or Legal Persons, in addition to citizens and US companies.
Shall I declare assets that I have in the US for the IRS in my country?
We recommend that you consult an accountant or lawyer to make sure the actual obligations and possible alternatives.
Will I pay income tax in the United States?
Every foreigner, resident or not, must pay income tax on income earned in American territory. For this you must obtain a Social Security Number or Individual Tax Identification Number (ITIN), depending on your immigration status. The US Income Tax defines tax rates of 10% to 35% varying with income obtained.
Will I pay income tax in my conutry of income earned in the US?
Income abroad must be declared in your country. However, in some countries there is an agreement of don’t do a double taxation, the tax paid in the US will be deducted from the tax payable in your country. Again, we recommend that you consult an accountant or lawyer for more information.
If I buy a property in Miami, can I live in the United States?
No. You still staying defined by its type of visa. In general, Brazilians receive residence 6 months and European 3 months. To reside in the United States, you should apply for one of the immigration rules.
If I no longer have an American visa, how I’m going to sell my property in Miami?
The sale of a property can be made by signing the documents at consulates or US Embassy in Brazil. The sales documents must be signed before a notary public of these offices. Another option is to appoint an attorney to represent you in any relevant act to the property.
Do I have go to the United States to buy property in Miami?
Purchases in cash, it is not necessary the presence of the buyer. Documents can be signed at the Embassy or American Consulate and sent by mail. In financed purchases, most banks, requires the presence of the buyer and your spouse.
We are available to answer any questions regarding the questions mentioned above. Please contact us for more information.
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