A Brief Guide for Canadians Buying Property in Florida

Are you ready to escape the winter freeze in Canada? It’s (almost) always sunny in Florida, so learn about buying property in this state and start living your American dream as a Canadian.

Canadians who want to escape the winters in Canada often purchase property in the United States Sunbelt, which they use as a winter getaway. Perhaps you're retired or semi-retired and want to try out the snowbird lifestyle of living in Florida as a Canadian for part of the year. Or maybe you simply desire a peaceful retreat for family weekends and vacations.

If you're thinking of buying a house or condo in sunny Florida, there are some essential things to consider before you start looking for your new place.

Can Canadians buy real estate property in Florida?

Yes, Canadians can buy houses in Florida. There are no restrictions on buying property in Florida as a Canadian citizen. The process is similar to what other foreign buyers do when purchasing property in the United States. It includes obtaining a tax identification number, opening a US bank account, and paying fees and taxes associated with the purchase. Remember that Florida's local property rules and regulations may differ from those imposed by Canadian provinces.

What’s the cost of buying a house in Florida as a Canadian?

There are various costs to factor into your Florida property purchase. You will need to consider not only the down payment when buying a house in Florida as a Canadian but also the real estate commission, legal fees, and closing costs. The closing costs are typically around 2% of the house's original price.

Make sure you research the area to determine how safe and secure your investment will be. You should also contact your mortgage company to ask about their options for financing.

Factors to consider when buying property in Florida from Canada

When buying property in Florida, it helps to define your criteria. For example, what will the property be used for – vacation or rental? Consider what lifestyle you want to lead in Florida. Do you want to be near the beach, the mountains, or theme parks? Also, what’s your budget like?

Florida has 67 counties, so you can use factors like crime statistics, weather patterns, amenities, the number of attractions, and expats' opinions to make a personalized decision. Ideally, you want to have eyes and feet on the ground to scout and see the properties for yourself. Working with independent, licensed realtors and local property companies will make the job much easier.

The benefits of buying a house in Florida as a Canadian

Why buy property in Florida as a Canadian? Some of the key benefits include the following:

Beautiful weather in Florida: Florida is filled with sunshine and perfect for those who love spending time outdoors. The climate is subtropical, with mild winters, hot, humid summers, and plenty of yearly rainfall. The beautiful weather in the Sunshine State is a major selling point for many Canadians.

Diverse real estate market: Types of properties to choose from include beachfront houses, condos, and golf course communities. Florida is one of the fastest-growing states in the U.S., so its real estate market has been growing steadily in recent years. You can find properties at different price points, depending on your budget.

Low cost of living: The cost of living is relatively low compared to other states like Hawaii, California, and New York.

Great investment: Property values have steadily increased, making it a good investment opportunity. Now is the perfect time to invest in a Floridian holiday home because prices are still relatively lower than in other parts of the world. In addition, the state has no income tax.

Canadian-friendly lifestyle: Floridians welcome Canadians looking for a second home to escape with open arms. There are plenty of amenities like sandy beaches and fantastic art galleries. In addition, many festivals and events frequently occur throughout the state. The international airport is filled with travellers from all over the world, creating enriching cultural exposure.

Best places for Canadians to buy property in Florida

Florida has many great places to buy property, but some are more popular than others. Here are five of the best places to consider:

Miami Beach: This is an excellent place to buy property if you want to be in a vibrant, exciting city. The beaches here are beautiful, and there is always something to entertain you.

Naples: Naples is a more relaxed town, perfect for those who want to enjoy a quiet beach lifestyle. The beaches here are also impressive, and there are plenty of great restaurants and shops in town.

Orlando: If you're looking for a place that has something for everyone, Orlando is the place to go. There are theme parks, resorts, great restaurants, and theatres. What's not to love about Orlando?

Boca Raton: If you are looking for the ultimate lifestyle destination, look no further than Boca Raton. This beautiful city has something to offer everyone—sunshine, white sand beaches, art galleries, and outdoor attractions everywhere you turn. It is also a great place for golf enthusiasts as there are many world-class courses. In fact, Golf Digest declared it to be one of the top 'Best Places to Live and Play' in America.

Tampa: Tampa is another city that offers a lot for property owners. It has thousands of restaurants serving delicious cuisine from around the world, a thriving arts scene, and a variety of outdoor activities, from biking to kayaking.

What do I need when buying property in Florida as a Canadian?

When a Canadian buys property in Florida, you'll typically need to submit the following paperwork and documents:

Proof of identity: Provide your passport, driver's license or other valid government-issued ID.

Proof of address: This is part of your contact details. If you intend to live in the US, you must also submit proof of your legal residence status.

Financial information: If you're applying for a mortgage, the lender will want tax documents for the past two years, proof of income (past 30 days), proof of down payment, a contract of sale and insurance, they may ask for details of your monthly expenses and liabilities. This information helps them determine whether you can afford the loan.

Steps for how to buy a house in Florida as a Canadian

Buying property in Florida as a Canadian is an increasingly popular choice. Here are some steps to complete if you’re thinking of making the USA your second home.

Identify your wants and needs: When searching for a property in Florida, you should first identify your wants and needs in a home. Factor in aspects such as the location, size of the property, type of housing, and any other amenities that are essential to you.

Research the market: It's crucial to research every area and the potential property you're interested in. Additionally, investigate the local real estate markets, taxes, and educational opportunities.

Real estate agent: An experienced real estate agent is key to a stress-free home-buying process. They will help you locate properties that suit your needs and budget and be available to answer any questions you have along the way.

Making an offer: Once you’ve found a property that meets your needs and budget, it’s time to make an offer. Your real estate agent can help guide you through the process and negotiate on your behalf.

Closing the deal: After you’ve reached an agreement on the sale, you need to close the deal. This includes signing the necessary paperwork, obtaining homeowners insurance, and paying closing costs.

Canadian buying property in Florida – Financing options

With all the different types of houses for sale in Florida, purchasing property there as a Canadian is an exciting venture. Whether you’re eyeing a cozy vacation home or a solid investment opportunity, you have several financing options to consider, each with its own set of benefits and considerations.

Explore US mortgage option

One of the most straightforward routes is to explore mortgage options with a U.S. lender. Many American banks and financial institutions are familiar with working with international buyers, including Canadians. They often offer competitive rates, though the application process can be more involved than what you might be used to in Canada. Keep in mind that U.S. mortgage lenders typically require a larger down payment from foreign buyers, so it’s a good idea to have your finances in order before you start the process.

Rely on Canadian financial resources

Another option is to use your Canadian financial resources. Some Canadians choose to leverage the equity in their Canadian property to secure a line of credit or a home equity loan, which can then be used to purchase property in Florida. This can be a convenient option, especially if you prefer dealing with a familiar financial system and avoid navigating the U.S. mortgage process.

Work with cross-border financial institutions

It’s also worth considering working with a cross-border financial institution. These banks operate in both Canada and the US, making it easier to manage your finances and understand the nuances of buying property in another country. They can offer specialized products tailored to the needs of Canadians buying real estate in the US, often providing more flexibility than traditional lenders.

Pay cash for your Florida property

Lastly, paying cash is always an option if you have the means. This route can streamline the buying process, eliminate the need for mortgage approval, and potentially give you more negotiating power with sellers. However, it also ties up a significant amount of capital, which might be better invested elsewhere.

What are the taxes associated with Canadians buying property in Florida?

When purchasing property in Florida as a Canadian, it's essential to understand the associated taxes to avoid surprises. You'll pay annual property taxes based on the property's assessed value, which funds local services and varies by location. The Foreign Investment in Real Property Tax Act (FIRPTA) requires the IRS to withhold a portion of the sale price when you sell your property, though this can be reduced under certain conditions.

If you rent out your property, the rental income is subject to US income tax and must be reported on both US and Canadian tax returns, with the potential for deductions and tax treaty benefits. When selling, capital gains may be taxed in both countries, but you can often claim a foreign tax credit on your Canadian return for taxes paid to the US.

Quick tips for purchasing Florida real estate

• Research the local market to understand property values and trends.
• Understand property taxes and insurance costs, especially in hurricane-prone areas.
• Get pre-approved for a mortgage to know your budget and show sellers you’re serious.
• Hire a local real estate agent with expertise in the Florida market.
• Be aware of FIRPTA if you’re a foreign buyer, as it affects taxes when selling.
• Plan for maintenance and management, especially if not living in Florida full-time.
• Check for community rules and regulations if buying in an HOA-managed area.
• Think long-term about your goals for the property (personal use, rental, resale).
• Consult a cross-border tax specialist to navigate US and Canadian tax obligations.
• Visit the property in person before making a final decision.

A better property buying experience with MTFX

Are you looking to buy property in Florida as a Canadian and worried about the exchange rates? If so, an MTFX account could be the right solution for you. We offer bank-beating exchange rates (3-5% lower) and low transfer fees.

Using a low-cost international money transfer service like MTFX to pay for your overseas property purchase will maximize your investment and give you more bang for your buck.

Open an account today with MTFX to enjoy simple, secure, and cost-effective international payments when you send money from Canada to buy property in Florida.

FAQs

1. Can foreigners (non-US citizens) buy a house in Florida?

Yes, foreigners are allowed to buy a house in Florida. They have the same rights and privileges as US citizens when it comes to purchasing a home in Florida. No additional Visa requirements are necessary to buy property in the Sunshine State.

2. Is it worth it for Canadians moving to Florida?

Florida is a great place to live, work, or study. It offers beautiful scenery, plenty of activities, and a relaxed lifestyle. Moving to Florida as a Canadian can be an excellent decision for those looking for a change.  Additionally, the state offers plenty of job opportunities if you want to pursue your career path.

3. How do I pay for my Florida property purchase?

The smart way to pay for your Florida property purchase is through a foreign exchange specialist like MTFX. You get access to a 24/7 secure online account, competitive exchange rates, low transfer fees, expert FX tools, and personalized tools to make the most of your money.

4. What are the tax implications of buying property in Florida as a Canadian?

When it comes to buying property in Florida as a Canadian, some important tax considerations include potential tax liabilities, double taxation, and cross-border taxation.

5. What are the benefits for Canadians owning property in Florida?

Owning property in Florida provides a warm retreat from Canadian winters, potential rental income, and long-term investment growth. Florida's no-state income tax and easy accessibility from Canada add to its appeal to Canadian buyers.