Buying in Florida 
Introduction
The State of Florida over the past 20 years has become a focal point for foreign investment in both commercial & residential property acquisitions. Its climate, miles of beaches, proximity to the Caribbean, Central & South America along with the ease of financing such acquisitions and competitive flights from may UK airports, has catapulted the state to the gateway of the America’s. As a result it is a highly desirable destination to purchase property.
Frequently Asked Questions
Do I Sign the contract before checking it with a solicitor?
There is no “subject to contract” clause in Florida, you either sign a contract at the beginning or you don’t. It is important that your solicitor is present before you sign any forms, as it will be a blinding agreement.
What can I expect the stage payments to be?
Newly built:
A holding deposit of $5,000 will secure your plot and will be deducted from the normal sales deposit of 10% at a later date. Further payments and when they will be due will be detailed in the contract.
Resale:
A holding deposit of $5,000 and then the remainder of the 10% deposit. Balance on completion.
What are the expenses incurred when buying a property?
Approximate amounts: Recording charges $100.00($10.00 per page)
Title Insurance $2,575 on a property purchased
Legal Fees 1% of purchase price
Mortgage Trans & tax $5.50 per $1,000 of loan
Mortgage Broker Fee 0.5% -1.0% of loan amount
Inspection Fees $400-$600
Survey Fees $300-$500
When do I pay the expenses?
At closing you are required to pay all the costs incurred during the purchasing process.
How do I get finance to but the property?
See Florida Mortgages Section
How do I open a bank account?All you require is a passport and a credit card.
How do I transfer money into my overseas account?You can make transfers direct from your UK bank to your bank account in Florida. Or you can use our recommended foreign exchange company service.
How can I secure an exchange rate?If you use a foreign exchange company you will be able to secure a rate for the total amount you require by paying a deposit. This enables you to calculate the sterling cost of the property and eliminates the risk of rate changes, which could lead to the property costing you more in sterling by the time you complete.
Is there a survey carried out on the property, structure and foundations?If you are buying a newly built property this should carry a builder’s warranty.
If you are buying a resale property it is advisable to inspect and survey the property. Inspection rights are addressed through specific provisions in the contract of sale and purchase.Inspections are typically conducted through professional inspection companies at a fee of approximately £300. The outcome of the inspection can lead to the seller giving a credit against the purchase price for any repairs needed up to a predetermined amount. Or the buyer accepts the “as is” condition of the property but has the right of cancelling and is refunded all monies paid on request.
Do I need to be present for completion?No, not if the power of attorney is in place or the closing package can be signed in the UK. This is called a mail-out.
When do I get the keys to the property?You will be given all keys to the property on the same day as you sign the title deeds.
When do I have access to my new property?On the day of completion when you have received the keys. You are not given access to a newly built property until a certificate of occupancy has been issued by the local town hall. This is to certify that the property has been substantially completed. Prior to closing you are able to do a walk through of the property to create a pinch list (snagging list), which will be acted on after the completion.
What taxes can I expect to pay?After the property has been purchased a Florida State tax equating to approximately 1.5% of the property’s value is due each year. If you have a mortgage on the property, the tax is usually paid on a monthly basis along with mortgage payments. Otherwise, the tax is issued in late October and there is a discount for early payment.
All rental income in Florida is subject to US tax and is paid locally. Currently, there is an agreement between Florida & the UK to prevent double payment of taxes. Income is charged on a sliding scale depending on the amount earned from the property. It ranges from 15% to 34%.
How do I pay these taxes.
We can help you appoint a representatives to take care of your tax returns.
What Monthly outgoings can I expect?Mortgage (if applicable)
Insurance (property & household items)
Property tax
Homeowner association fees (if applicable)
Pest Control
Water & Electricity
Lawn & Pool care (if applicable)
Phone & TV Cable charges.
What visas do I need to stay in Florida?
If you are staying for less then 90 days you will need a visa waiver form. These can be obtained form your travel agent or from the airline. If you want to stay for longer than 90 days you must apply for a non- immigrant visa, of which America has over 60 different types.
How do I get medical coverage here?
In America there is no National Health Service so private medical insurance or travel insurance is essential. If you are seriously injured the emergency services will treat you and charge you later.
If the injury is not serious and you need to consult a doctor, a basic consultation will cost approximately $100 with additional medical charges on top.
Who holds the title deeds to the property?In England it is common practice that your solicitor will hold the deeds to the property.
However in Florida, the inscription in the public record is the highest form of ownership, therefore you will hold the deeds to the property.
Who should be the owner of the property for a tax reason?
There are a number of ways to purchase the property; each way (listed below) has its advantages and disadvantages. What would be best for you would depend on your personal circumstances. This decision does play a major part in the overall transaction, particularly with its impact regarding finance and the income and estate taxes. We would be happy to recommend a company to advise you.
-In your own name
-In joint names: you and your spouse or co-purchaser
-In your children’s names or the name of the person who will inherit the property
-In the name of a limited company
Do I need to make a will in America?
If the property is purchased in an individual’s name it is advisable to make a will in order to control the disposition of the property in Florida. We would be happy to recommend a company to advise you.
What is the inheritance tax on a property?There are a number of different scenarios to consider when it comes to inheritance tax, depending on how you own your own property. If you own the property through a corporation then the shares will pass to your heirs, as the property did not change hands, no transfer deeds or titles will have to be dealt with.
If you own the property through a partnership, this is similar to a corporation, however, when one of the partners dies the partnership is dissolved and therefore, the title would need to be transferred and the deeds to be amended.
If you own the property directly, your heirs will have to file US estate tax returns for the value of property. Non- residents are liable for tax on the value of assets inherited in excess of $60.000. Your Spouse is not exempt from inheritance tax unless they are US citizen. There are many allowable deductions, which could reduce or eliminate the tax.
The conveyance process
When you have decided on a particular property it is important to secure the acquisition by means of a contract of sale & purchase. Under Florida law it is necessary to have a binding agreement, which is signed by both parties, the buyer & the seller. It is important to secure your proper rights within the contract. Finance, property inspection, closing timeline, title searches and surveys should all be detailed within the document. Deposits accompanying the contract may range up to 10% of the purchase price or as otherwise negotiated between the two parties.
The closing agent/Lawyer will instruct for the relevant searches to be carried out on the property and prepare a closing statement detailing your financial obligations.
You will need to open a bank account in America: we will be able to assist in this process
At closing you exchange the balance of the price, keys and ownership. Also, at this stage, payment for expenses incurred throughout the purchasing process must be paid.
The closing agent/lawyer will ensure that the warranty deed and the title-transferring document are formally recorded in the public records in the country where the property is situated.
All taxes must be paid at the time of closing.
You must change the water and electricity supplies into your name.
