3 minute read
Global Business Council
Responding to SW Florida Foreign Buyers in an Unusual Market
By: Karen Sweat PLLC, Realtor®, Michael Saunders and Company, Licensed Real Estate Broker
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Canada ($3.3 B) Brazil ($1.6 B) Argentina ($1.3 B) Venezuela ($0.9 B) Colombia ($0.8 B) 1 A large portion of South West Florida’s housing economy is from investments made by international buyers.
At the end of 2019, Florida’s top five foreign buyers were from the following countries, with sales in the billions:
WILL THE FIRPTA WITHHOLDING APPLY? In May, Florida REALTORS® hosted its first Virtual Inbound Trade Mission to Canada to discuss the current state of the Canada-Florida market, future expectations, and current challenges.
The consensus: foreign buyers are still in the market. And, as we find them their perfect home, we need to gather more information to provide for a smooth transaction and long-term customer satisfaction.
HOW CAN WE BETTER PREPARE OUR FOREIGN BUYERS?
Aside from an awareness of the Foreign Investment in Real Property Tax Act (FIRPTA), we should consider their country of origin before a property is purchased. It’s also helpful to know how the property will be used, as there are likely different tax implications in their home country than when owning property here.
TYPES OF PROFESSIONALS THAT FOREIGN BUYERS MAY WANT TO CONSULT: Tax specialists Legal experts Estate planners Immigration agents Property Managers
These buyers will decide whether to own the property personally or through an entity. They might have to apply for an Individual Tax Identification Number (ITIN), which can allow non-resident aliens to address income tax obligations in the U.S.
SOME IMPORTANT DETAILS THESE PROFESSIONALS CAN BEST HELP SORT OUT: Owning a second home may have home country filing requirements. Canadians disclose second home property ownership with informational reporting. Aging foreign buyers should consult with cross border tax and legal professionals because of the significant impact on estate tax. “International investors” are subject to U.S. “source income” tax on rental income and gains from real estate sales in the United States.
Once your foreign buyer is ready to sell, they need to be reminded of FIRPTA, as it applies to any foreign seller. They might need to get an IRS tax ID. Potentially, 15 percent of sales can be withheld and sent to the IRS pending future filings.
The secret to success in working with foreign buyers as the Realtor® is knowing when to bring in your partners to advise your foreign buyer(s) to ensure their purchase and subsequent sale goes as smoothly as possible. •
Source: UPDATED ON DECEMBER 3, 2019 © 2020 Florida REALTORS® What International Buyers are Looking for in the Florida Market.
RASM NEWS Nominations Now Open for 2020 RASM Awards
The REALTOR® Association of Sarasota and Manatee will honor six members for their service to the REALTOR® organization, service in the community, business accomplishments, etc. We need your help to identify the recipients for 2020.
If you know a member whom you feel is deserving of such recognition, please submit a nomination for them, or urge them to submit their own. You can also selfnominate! The deadline is Monday, September 30.
The Newcomer Award recognizes a new
Realtor® who joined RASM on or after June 1, 2017. The Humanitarian Award honors the lifetime contributions of a member who embodies the spirit of community service. The REALTOR® of the Year Award recognizes a member’s contributions to the profession, community, and fellow Realtors® during the past three years. The Distinguished Service Award honors the lifetime contributions of a Realtor® to the profession and the community. The Business Partner of the Year Award recognizes a Business Partner member for outstanding contributions to RASM, the real estate industry, and community service. The YPN Member of the Year Award recognizes a YPN Member for outstanding contributions to RASM, the real estate industry, and community service.
Visit myrasm.com/awards to submit your nominations. Nominations are due by Monday, September 30, 2020. The Nominating Committee will meet soon to select this year’s recipients, who will be featured in our December magazine and honored at our Installation & Awards Banquet. •
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