Investing in U.S. real estate is a powerful strategy, but it requires understanding taxation on both sides: in the United States and in your home country. This guide explains, clearly, the main taxes and obligations so you can make a well-structured decision. Nothing here replaces the guidance of a specialized accountant.
On the U.S. side: FIRPTA on sale, tax on rental income, and annual property tax. On the home-country side: reporting the asset and, above certain thresholds, additional declarations.
FIRPTA: withholding on sale
FIRPTA (Foreign Investment in Real Property Tax Act) provides for a 15% withholding on the sale price when the seller is a foreigner. It is an advance on tax: the amount actually owed is determined later, and the difference can be refunded. Planning avoids cash-flow surprises on resale.
Rental income tax (U.S.)
Rental income generated in the U.S. is taxed there. It is common to obtain an ITIN (taxpayer number for foreigners) and file the annual return, deducting expenses such as management, maintenance, and depreciation, which reduces the taxable base.
Property tax
Every property pays an annual property tax, which varies by county and state. It is a recurring cost that must be included in the net-return calculation.
Home-country reporting
Foreign-held property typically must be reported in your annual income tax return, at acquisition cost. Rental income is also reported, with rules to avoid double taxation. Above certain foreign-asset thresholds, additional declarations to your central bank or tax authority may apply.
Frequently asked questions
What is FIRPTA?
It is a 15% withholding on the sale price of property by foreign sellers, as an advance on U.S. tax.
Do I report U.S. property back home?
Yes. It generally must appear in your income tax return as a foreign asset, and rental income is reported too.
When do additional declarations apply?
When your total foreign assets exceed the thresholds set by your home-country authorities.
Do I need an ITIN?
Generally yes, to meet U.S. tax obligations related to rental income.
Conclusion
Taxation is not a barrier, it is part of a well-structured decision. With planning and a good accountant, the investment remains attractive. First understand how to buy U.S. real estate and how to protect your wealth safely.
Plan taxation before you invest. Talk to Buldora.
Sources
Buldora's analysis based on official sources, including the IRS (U.S. taxes, FIRPTA, ITIN/Form W-7). Informational only; not legal, tax, or investment advice.
This article is part of the complete guide How to Buy Property in Florida as a Brazilian.
