A Complete Guide For Canadians Buying Property in Florida

In the past 10 years, the Florida housing market has been experiencing steady growth. The average property’s value has increased — from around $180,000 (in 2015) to almost $400,000 (as of 2023). This has attracted many investors and first-time home buyers from all around the US, Florida, and the world.

With all these amazing numbers (and great weather), it comes as no surprise that more than half a million Canadians own property in Florida. And, if you have a desire to join them, either as a nonresident investor or as a future Floridian, you’ve come to the right place.

In this article, we’ll review all the most important things you should know as a Canadian buying property in Florida. We’ll also share with you the main reasons why Canadians purchase real estate in this amazing US state, along with some advice on how to buy and what to do when purchasing a house in Florida. 

Canadian Buying Property In Florida – Is That Possible?

Yes, Canadians and other foreigners can buy real estate in the US. In fact, since 2010, there have been more than 450,000 Canadians who bought property across the US (including Florida). Apart from buying investment properties, Canadians also purchase vacation homes and primary residences (for those who intend to move to the US permanently).

Buying Property in Florida as a Canadian – Required Documents

Whether you’re planning to move from Canada to the US (buy a primary residence in Florida), or are interested in purchasing an investment property, there are some documents that you probably should have. Documents such as:

• A valid Canadian passport;
• Proof of Canadian residency or citizenship; 
• Card for those who are in the NEXUS program;
• Social Security Number (SSN);
• Individual Taxpayer Identification Number (ITIN); 
• A US visa; 
• Some financial documents, like, proof of income, job history, or credit reports;

Why Are Canadian Buying Property in Florida – Main Reasons

There are many reasons why  Canadians choose to buy property in Florida. The most popular ones include:

Cost of Living and Real Estate Prices

The average price of real estate properties and a lower cost of living, are considered as the key reasons behind so many Canadians buying houses in Florida. Just to give you an example – an average home in Florida will cost around $380,000, while in Canada the median home will be priced at around $520,000. Meaning that a Canadian buying property in Florida will save more than $100,000 and will also get a lot more bang for their buck. 

Another factor that drives Canadians to this US state is that the cost of living is far lower in Florida. This is mostly due to the way taxes work in these two respective places. For example in Ontario, anyone making above $160,000 (US dollars) a year will be taxed at the rate of 53,3%. On the other hand, in Florida, the person making the same amount of money will be taxed at the rate of around 32%. 

It’s also important to mention the average food prices, as they can affect the cost of living. For example, a dozen eggs in Canada will cost around 2,5 US dollars, while those same eggs will be around $1 in Florida. The list goes on and on, with the main point being that — it’s far more affordable to live in Florida.

Great Weather and Attractive Climate Make Canadian Buying Property in Florida

Florida is widely known as one of the states with the most favorable weather conditions. It attracts millions of tourists every year, all of whom are looking to enjoy the sunshine, wonderful beaches, and many tourist attractions Florida has to offer. On average, Florida has more than 235 days of sunshine each year, with certain places being able to reach 270 sunny days per year (e.g. Bonita Springs and Fort Myers). 

On the other hand, we’ll just say that Canada is not well known around the world for its great weather conditions. 

No State Income Taxes and Landlord Friendly

For Canadians looking to buy property in Florida as an investment (i.e. to rent and generate income), the fact that this US state doesn’t have income taxes is great news. This means that whatever the amount of money you’re able to generate via renting the property you purchased is not going to be taxed on the state level. There are other tax benefits that can come from investing in Florida real estate, such as depreciation and smaller tax rates for passive income (which includes renting a property).  

Another important thing to mention is that Florida is a landlord-friendly state, which is a good thing for those looking to buy an investment property. Apart from all the tax breaks that make the state friendly to landlords, there are also eviction laws that ensure property owners (and their properties) are legally protected from bad tenants.

Canadian Buying Property in Florida – 5 Steps to Consider

If you’re a Canadian looking to buy a property in Florida, here are some things that you should definitely consider beforehand, along with some important questions that you should ask yourself.

1. What’s the Reason for Canadian Buying Property in Florida?

This is, in all likelihood, the most important question any Canadian should answer before purchasing a property in Florida – Why am I doing it or why do I want to do it? And, based on the answer, the way you should approach buying a house in Florida will greatly differ.

To make things simple to understand, we’ve identified 3 main answers as to why a Canadian would buy real estate in Florida. They are as follows:

• Buying a property in Florida to live there (For Canadains planning a permanent move to Florida);
• Buying a vacation home in Florida (To use it a couple of times a year, and maybe rent it out when not in use);
• Buying an investment or rental property in Florida (property whose main purpose is to generate income);

Whatever your answer is, it will have a big impact on how you approach buying property in Florida. Mainly, it will affect the location and financing options that will be available to you. 

For example, for those Canadians looking to move to Florida, numbers such as average rental income and property management fees will have far less impact on their decision-making process. On the other hand, Canadians who are looking to invest in Florida’s real estate market and purchase rental property will want to focus on the above-mentioned numbers, as they will in large part determine the success of their future investment.  

So, before doing anything, first answer the question – Why am I buying property in Florida?

2. Property Value and Budget

The next thing, as a Canadian buying property in Florida, you should consider the price of the property you’re interested in, and the budget you are dealing with. That, along with the reason for purchasing a house in Florida will have a big influence on the financing options that will be available to you. 

If you’re buying property in Florida as an investment, you’ll most likely end up looking at financing options that sometimes come with a higher down payment. Additionally, it’s important to note that some types of mortgages will require you to have a US credit score, while others won’t. 

The types of mortgages you could end up running into, include:

• Foreign national mortgage loans;
• DSCR loans; (yes, you can get a DSCR loan as a Canadian investing in US real estate)
• Hard Money loans;
• Commercial loans;
• Portfolio loans; 

3. Location 

As we’ve mentioned above, property location will have a much bigger impact on your decision-making if you’re aiming to permanently move to Florida. If that’s the case, you should be looking to buy a house in Florida at a location that personally resonates with you. And, if you’re unsure where to start, check out our article on the top 12 places to buy house in Florida. 

Apart from the weather, (which is almost ubiquitously amazing in Florida), when it comes to picking the right place to live you should focus on:

• The quality of schools in the area (if you have children);
• The culture and overall vibe of the community (does it resonate with you?);
• Access to healthcare facilities and cost;
• Public infrastructure;
• How far away is the nearest beach?
• Etc…

Now, on the other hand, if you’re looking to buy an investment property, the above factors could influence your decisions, but to a lesser degree. After all, if the numbers are good, why should you care if you do or don’t resonate with the community? You’re not going to be living there. You’ll just be renting the property out and making money from it.

4. Get a Real Estate Agent or DIY

After figuring out the first three steps on your own, it’s time to make another important decision when it comes to buying property in Florida – do it on your own or hire a real estate agent.

There are pros and cons to both, so think carefully before settling for either option. For example, hiring a professional real estate agent will:

• Use their knowledge of the local real estate market to help you make the most informed purchasing decision;
• Help you connect with the right sellers;
• Save you time by handling negotiations, locating different properties based on your requirements, and helping you with closing the deal.
• Save money by ensuring you don’t overpay for a property;
• Take a commission.

On the other hand, if you go at it by yourself, you might end up:

• Investing a lot of time in finding the right property;
• Making multiple trips from Canada to Florida to meet with sellers in person;
• Putting in a lot of work to familiarize yourself with the trends of the local real estate market;
• Overpaying for a property;
• Saving money on commission.

We can help you find the best real estate agents with extensive experience in dealing with international buyers.

5. Property Management and Fees For Canadian Buying Property In Florida

If you’re a Canadian buying property in Florida for the sole purpose of renting it, getting the right property manager or hiring a good management agency is something you need to consider. Your choice in this matter can affect your bottom line (or in this case your ROI). That’s why it’s really important to familiarize yourself with property management. And, this is especially true if you’re planning on managing said property from abroad.

Most property managers will, for a fee (usually a fixed percentage taken directly from rent), help you with the following: 

• Find and manage tenant relationships;
• Collect rent;
• Help advertise properties that are vacant and handle lease agreements;
• Perform regular maintenance and necessary repairs;
• Ensure that the lease doesn’t violate any state or federal laws;
• Handle evictions of tenants;

Canadian Buying Property in Florida – Financing Options

There are many different financing options for Canadians looking to purchase a real estate property in Florida. The most popular ones include:

• Foreign national mortgage loans – these types of loans are mostly for people who are looking to purchase rental property;
• Non-QM DSCR loans – these types of loans are solely for those Canadians looking to invest in rental property;
• FHA loans – for Canadians that have a US credit score of at least 500 and are looking to purchase their first home.
• Conventional loans – many different types of loans that will usually require a US credit score of above 600.

Two Ways Canadians Can Purchase Property in Florida

There are two ways Canadians can purchase and register a property in Florida:

• By forming an LLC; 
• By using their personal name;

In the following part, we’ll briefly review some pros and cons for each of those two options to help you make the most informed decision possible.

1. Form an LLC

Opening an LLC as a foreigner and buying real estate in Florida through it, is a great option for any Canadian, but is especially good for those looking to invest in rental properties. If you do that, you can expect to reap the following benefits:

• Protection from liability and against legal actions;
• Protection of personal assets;
• Various types of tax deductions;
• Privacy protection for the owner;

2. Under a Personal Name

Buying a property in Florida under your personal name is an option mostly reserved for those looking to make a permanent move to this US state. It’s for those people who don’t want to deal with all the hustle and bustle of opening up an LLC, want to buy a house in Florida to live there, and generally don’t want to be bothered by all the documentation even if it can lead to tax deductions. 

What are the Taxes Associated with Canadian Buying Property in Florida? 

Taxes, and how much money you have to pay for them can vary depending on various factors. But, for the most part, you’ll be looking at dealing with the following tax categories:

• Property taxes – This type of tax can greatly differ based on location and the current market value of a specific property;
• The Foreign Investment in Real Property Tax Act (FIRPTA) – A special category of taxes, reserved solely for nonresidents that sell real estate in Florida. 
• Tax Conventions Between Canada and the United States of America – various different tax obligations that can affect taxes on rental income and other income generated by a specific property (such as sale income). 

FAQ

Do Canadians need a visa to buy property in Florida?

No, if you are from Canada and want to buy real estate in Florida, you don’t need a visa. But, what you do need to have is a valid passport and documentation that proves you are a Canadian citizen.

Can foreigners buy property in Florida?

Yes, they can. In fact, Florida is the most popular state for foreign investors with more than $53,3 billion worth of real estate investments between April of 2022 and March of 2023.

Over 23% of all nonresident investors buying property in the US, choose Florida as a place to invest their money in.  

How big are property taxes in Florida?

The property taxes in Florida are based on the property’s current market. Meaning that the taxes will be equal to a certain percentage of a property’s current price. For an average home in Florida, property tax is around 0,8%

Can nonresidents rent properties in Florida?

Yes, they can, but first, they’ll need to get a state-issued license before they can become a landlord in Florida.

Buy a House in Florida With NRI

With our vast network of real estate agents, we’ll connect you to those who specialize in working with nonresidents and understand Florida’s local market and current trends. 

Additionally, As a mortgage broker licensed in Florida, we will help you to find the best lenders to finance your property in Florida. We’ll then assist you in sorting through all the loan offers, compare them, and choose the one that best suits you.