Buyers Guide to Purchasing in Florida

Property in Florida

The USA particularly Florida has always been a popular destination for British people buying second homes abroad and there has never been a better time to purchase your dream holiday home in this area.
Prices currently represent very good value for money with a choice of townhouses, condos and detached homes. These properties come fully equipped and furnished with a choice of 3, 4 and 5 bedroom homes
Current prices are very competitive and so now could be the perfect time to buy.

Buyers Guide to Purchasing in Florida

These holiday homes are located on impressive holiday resorts which offer many amenities such as heated swimming pools, jacuzzis, clubhouses, cafes, bars, spacious outdoor terraces, games facilities such as volley ball and much more, giving a relaxing resort lifestyle whilst also being close to the many attractions of the area.

Orlando in central Florida is where most of the big attractions are located, such as Disney World, Universal Studios, Busch Gardens and Sea World, and it enjoys a warm climate all year round, making it a favourite with British holidaymakers.

Florida is also a dream location for golfers and is home to some of the finest golf courses available.

Buying a Property in Florida

Purchasing a property in Florida is very different from purchasing the UK’s and it is essential to seek professional guidance. It is recommended to consult a buyer’s agent experienced in working with British purchasers.
Individual circumstances vary widely, so it is essential to obtain professional advice and guidance tailored to your particular situation, especially in areas such as property purchase, potential rental returns, taxation and mortgages.

Buyers Guide to Purchasing in Florida

There are no restrictions on foreigners including Britons buying a property in Florida however there are limits to how long they can spend in the country each year (see Passports and visas below).

Costs

You should allow around five per cent of the purchase price, to cover all necessary fees, which include searches, legal fees, stamp duty, title insurance and notary fees, title insurance premiums, transfer taxes, property taxes and mortgage fees (if applicable),
Once a price is agreed, the purchaser pays a small deposit before making a formal offer in the form of a purchase contract, when signed, this is binding.

Buyers Guide to Purchasing in Florida
A 10 per cent deposit is then paid into an escrow account. A title insurance is then obtained which insures the property against any third party claims. Completion, including the transfer of the balance of the purchase price into the escrow account, can then take place.

If you are considering renting out your home then it is advisable to appoint a rental property manager. When purchasing your property the agent will be able to advise on local companies and costs.

Buyers Guide to Purchasing in Florida

Mortgages

There are several options when purchasing your property.

Paying Cash: If you can afford to this is often recommended. If this is an option for you, be sure to consult one of the specialist currency exchange companies in the market, as you can get far better exchange rates and potentially save thousands in the process.

UK Mortgage: Several UK mortgage providers will lend funds of up to 80 per cent of the purchase price for second home purchase over, typically, a 15-year term depending on circumstances.

US Mortgages: If you decide to obtain finance in the US bear in mind that most mortgages available to foreign nationals require a minimum 20 per cent deposit. Some even stipulate 30 or 35 per cent. You will need to provide proof of income and identity and details of your bank account and credit cards.
At the beginning of the process, make sure you obtain what is known as a Good Faith Estimate. This is a standardised document used to detail all the costs of obtaining your mortgage, including both monthly and one-off payments.

Passports and Visas

British citizens may visit the US for business or pleasure without a visa for up to 90 days per year. A passport is required. All European travellers wishing to use the Visa Waiver will be required to register themselves online before departure for the US.
This should preferably be done at least 72 hours in advance, and is intended to afford an extra layer of security for the US authorities. The online registration is valid for up to two years and is called the Electronic System for Travel Authorization (ESTA) it is valid for multiple entries into the US, so for property owners it is possible to fill out the online registration once and then travel for two years under the normal Visa Waiver Programme.
Those wishing to stay between 90 days and six months must hold a B2 Tourist Visa. To be successful, applicants must prove they have sufficient funds to support themselves during their stay.

Buyers Guide to Purchasing in Florida

Taxation.

All rental income in Florida is subject to tax.
The US taxation system is quite a complex one, and can involve payments to at least four different government levels, local, regional, state and federal. A Double Taxation Treaty between the US and the UK prevents double payment of taxes.
Income tax ranges from zero to 35 per cent of taxable income and forms the bulk of taxes collected by the US government.
Florida taxes are lower than many other US states in terms of the tax burden it imposes. It is one of only nine states that do not levy a personal income tax. More than half of its non-federal revenue is collected at local level, mostly through property taxes, which, for homeowners, amount to approximately 1.5 per cent of their property’s value per annum.
All rental income in Florida is subject to tax, which is charged on a sliding scale (currently 15 to 34 per cent), depending on the amount.