What happens when a non-U.S. person passes away while owning real estate in Florida?

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South Florida is a great place to live with its sunny beaches, warm people and year-round warm weather. These are some of the reasons that draw many foreigners to purchase real estate in Florida. Many of these foreigners are from Hispanic countries.

Many people do not realize exactly what happens to that real estate when they pass away. The tax due when a person dies is called an estate tax.

In the United States the rules for estate taxes are very different for U.S. citizens/residents and non-U.S. persons (also called Non-Resident Aliens.)

 

Simply speaking, if a U.S. Citizen dies, they will owe no federal estate tax if they have not given away or own more than $5.43 million dollars (adjusted annually for inflation.) The rules are TOTALLY different when you are not a U.S. Person. The amount you are allowed to own before an estate tax is triggered plunges down to only $60,000.00!

What does this mean in plain English?

Unfortunately, many foreigners and their families are taken by surprise when they find out they owe this 40% tax. Plan to avoid it!

Unfortunately, many foreigners and their families are taken by surprise when they find out they owe this 40% tax. Plan to avoid it!

It means that if you are not a U.S. Person and you bought a condo in South Florida in your own name for US$300,000.00, when you die you will only have an estate tax exemption of $60,000.00, and anything over the $60,000 exemption will be taxed at 40%!

In the previous example, this means there will be a tax liability of approximately US$96,000.00!

Unfortunately, this comes as a surprise to too many people – and it is often too late to avoid this tax. Everyone should plan to protect their assets but it is imperative that non-U.S. Persons plan BEFORE they acquire assets in the United States to make sure they protect their families and their investments.

The best time to plan to avoid these taxes is BEFORE you purchase the property. However, there are actions we can take to avoid or minimize this tax. 

Call us to make sure your property is protected (954) 233-0682.