American Laws and Taxation Rules
In the United States, foreign investors can buy, sell or manage a property without a permit, a visa or a special permission from the U.S. immigration authorities. Owners can live in the United States with a tourist visa and enjoy their properties for the whole duration of their visa. The American government does not issue work permits to foreigners who own a property in the U.S.
The property being on U.S. territory, American taxation rules will apply.
American Taxation Rules
Real estate investments in Miami benefits from tax exemptions on personal income in Florida. Therefore, as a foreign investor, you will be subject to the Real Estate Tax and to the Internal Revenue Service’s income tax.
Real Estate Tax
The Real Estate Tax accounts for 1.5 % to 2 % of your property valuation – which is calculated according to the area it is located in. The estimated value of your property is always lower than the sales price and is updated each year. For example, a property that sold for $250,000 probably has an estimated value ranging between $140,000 and $160,000 depending on its location. The Real Estate Tax to be paid will be around $2,500 per year.
The Real Estate Tax has to be paid between November 1st and April 1st. Miami-Dade County offers a 4 % reduction if you pay in November, 3 % in December, 2 % in January and 1 % in February.
Rental Income Tax
In the United States, rental income is fully taxable. American tax brackets range from 10 % to 39.6 %. Your real property will be amortized over a period of 27.5 years, which will allow you to significantly reduce your taxable rental income or even achieve real estate losses.
The U.S.-France income tax treaty also prevents double taxation for French citizens, thanks to the tax credit program currently in effect.