Canadians Buying Property in Florida- A Complete Guide

Are you from Canada and contemplating buying an investment or vacation property in Florida? If Yes, Congratulations! You have landed at the right place. This guide has been carefully compiled for Canadians buying property in Florida. This guide aims to address all your queries and provide a list of parameters and checklists you should consider before investing your money in Florida real estate.

The first factor a Canadian investing in Florida real estate must consider is whether or not they can purchase a real estate property in Florida.

Can Canadians Buy Property in Florida?

Yes, Canadians can buy real estate in Florida.

To do so, they must follow the same process as any other foreign buyers wishing to purchase property in the state. It includes getting a tax identification number, opening a U.S bank account, and preparing to pay any associated fees and taxes.

Additionally, Canadians must be aware of any rules and regulations that may differ from those in their home country.

Suppose you are a Canadian looking to purchase real estate property in Florida; it is essential to consult with a qualified local real estate agent who can guide you through the process and help ensure a smooth transaction.

Now that we know Canadians can buy real estate in Florida, the next step would be to know the worthiness of the property in question. So, let’s find out if investing in Florida real estate is worth it or not. And If yes, then why?

Documents required to Buy the Property in Florida as a Canadian 

When you are planning to buy a property in Florida as a Canadian, there are certain documents you need to have in order. These include: 

• A valid passport 
• Proof of citizenship 
• A NEXUS card (if you are a member of the NEXUS program) 
• A valid visa (if you are not a citizen of the United States) 
• Proof of residency in Florida 
• A Florida driver’s license (if you plan to drive in Florida) 
• A Social Security number (if you are a US citizen or resident) 
• A bank statement or letter from your bank confirming your ability to obtain a mortgage 
• Your credit reports 
• Proof of income 
• A down payment (usually 20% of the purchase price) 

Once you have gathered all these documents, you will be ready to start the process of Buying property in Florida as a Canadian. 

How can a Canadian Buy Property in Florida? 

The process of buying property in Florida as a Canadian is not very different from the process followed by Americans. In fact, the entire procedure is quite simple and hassle-free. 

1. Find an excellent real estate agent, a Certified International Property Specialist (CIPS) agent, to assist with the search and purchase process. HomeAbroad  can help you navigate the journey of finding your ideal property. 

2. Get in touch with a suitable mortgage lender and apply for a loan, as most big banks and financial institutions offer mortgages to foreigners. 

3. Complete the necessary paperwork, including the purchase contract, loan documents, and title insurance. 

4. Close the deal and make the payment. 

Overall, the process of buying property in Florida as a Canadian is simple and straightforward.  

Refer to this guide for step-by-step process of Canadian buying house in USA. 

What’s the Cost of Buying a House in Florida as a Canadian? 

When Canadians buy property in Florida, they need to consider various costs, including the down payment, real estate commission, legal fees, and closing costs. On average, the closing costs with taxes amount to approximately 2.3% of the property’s purchase price. Careful evaluation of these expenses is crucial to determine affordability when acquiring property in Florida. These closing costs can include: 

Financing Options for Canadians Buying Property in Florida 

Canadian buyers interested in purchasing property in Florida have several financing options to consider. These options cater to different financial situations and preferences, ensuring a smooth and successful home purchase process. Here are the various financing options available: 

With No/Thin US Credit History 

Foreign National Mortgage  

• Foreign national mortgages are granted to foreign nationals without a US credit history. 
• These mortgages are beneficial for individuals wanting to buy a home in the US but lack existing US credit history. 
• Eligibility requirements for foreign national mortgages vary among lenders. 
• Lenders often use international credit reports to assess creditworthiness and approve the mortgage. 
• HomeAbroad has lender partners that offer Foreign National Mortgages. 
• HomeAbroad can connect interested individuals with these lenders for free to initiate the home-buying process. 

DSCR Loan 

• DSCR loans don’t require your credit score or other personal income documents. 
• It’s utilized by individuals and small business owners who cannot provide the necessary paperwork for a standard loan. 
• Approval for this mortgage is based on the property’s ability to generate sufficient rental income to cover the mortgage payment. 
• The investment property’s rental income serves as the qualifying factor for the cash-flow mortgage. 

With US Credit 

FHA Loan  

• FHA loan is an excellent option for first-time home buyers who have an established US credit history. 
• This loan allows for a lower down payment of 3.5% and offers attractive, low-interest rates. 
• To qualify for an FHA loan, applicants need a credit score of more than 500. 
• Additionally, they must have verifiable employment and income records. 
• While FHA loans are advantageous for US citizens, they may be challenging for most foreigners to qualify due to stricter criteria. 

Conventional Loan 

• Canadians with established credit can qualify for conventional loans like FHA, Freddie Mac, and Fannie Mae. 
• Lenders require borrowers to meet specific criteria to be eligible for these loans. 
• Conventional mortgage lenders typically prefer a credit score of 620 or higher from borrowers. 
• Additionally, a debt-to-income ratio of 43% or lower is desirable for qualifying for these loans. 
• Finding a lender who works with foreigners and understands the process is essential for a smooth approval process. 
• Homeabroad has lender partners specializing in helping foreigners purchasing property in the US, making the financing process hassle-free. 

Best Places for Canadians to Buy Property in Florida 

 Some best places to invest in Florida, five stand out as top choices: 

Each of these locations presents unique opportunities for property buyers, catering to various preferences and interests. 

Click here: 10 Best Places for Canadians to Buy Vacation Property in the USA

What are the Best Ways to Buy Property in Florida as a Canadian? 

There are many ways to buy property in Florida as a Canadian. The most common way is to 

1. Use the help of a real estate agent 

Once you have found a real estate agent, you can proceed with your search for a dream home. The agent will assist you in finding homes that fit your priorities and budget. A CIPS real estate agent is an expert at handling international property sales. They have experience with international clients and can help you buy a property that meets your personal and cultural requirements. 

2. Buy directly from the developer 

If you are interested in purchasing a newly built home, you can contact the developer directly. You can usually find their contact information online or in real estate listings. 

3. Attend a live auction 

You can attend a live auction if you want to purchase a property at a bargain. Auctions are a great way to get a good deal on a property. However, you should be aware of the risks involved before bidding. 

Legal and Regulatory Considerations 

When considering buying property in Florida as a Canadian, it is essential to be aware of the legal and regulatory considerations involved. Fortunately, Canadian citizens have the freedom to purchase real estate in Florida without any restrictions on foreign ownership.  

By being diligent and well-prepared, Canadian buyers can confidently venture into the Florida property market and fulfill their real estate goals. 

What are the Tax Implications of Buying Property in Florida as a Canadian? 

The tax implications are not very different from those of any other state. 

However, you should ensure that you are aware of Florida’s tax rules and regulations before making any decisions. 

Understanding the Florida Real Estate Market 

• In the year 2023, Canadian buyers accounted for 25.1% of the total foreign buyers in the Florida real estate market. 
• Throughout the year, they purchased an impressive 11,300 units, demonstrating a keen interest in the American property market. 
• Canada holds the distinction of being the largest foreign investor in the US real estate market, with a significant investment amounting to $5.5 billion. 
• These figures reflect the growing prominence of Canadian investors in international real estate transactions and showcase their confidence in the US real estate sector.  
• The median purchase price of US real estate by Canadians is $416,100, while the average purchase price is $485,000. 

Is It Worth Buying Property in Florida?

The real estate market of Florida is relatively developed, and the state witnesses a constant inflow of buyers from all across the globe. Touted as the Sunshine State, Florida is famous for its alluring beaches, world-renowned theme parks, and other tourist attractions. As a result, Florida has a lot to offer to real estate buyers. As per the NAR (National Association of Realtors) report,2022

Canadians are amongst the top foreign buyers of real estate in the USA. Also, Florida is the top destination to invest in real estate.

The real estate market of Florida has always been a lucrative investment destination for international buyers, and Canadian buyers are no exception. The state of Florida has a lot to offer to real estate buyers, and the market is relatively developed compared to other states.

Some of the primary reasons why investing in Florida property is an excellent idea are listed below:

1. The Weather Is Awesome

Florida’s appealing tropical climate and warm temperatures year-round make it an ideal destination for Canadians seeking to escape freezing winters. Many foreign buyers prefer purchasing vacation properties here, utilizing them for vacation rentals as well. 

2. There are no State Income Taxes

Another great reason to invest in Florida real estate market is that there are no state income taxes. It means you will not have to pay taxes on the money you earn from your investment property, such as income from your vacation property or vacation home.

3. The Real Estate Market is Relatively Stable

The real estate market in Florida is relatively stable compared to other US markets. It is because the market has not been as severely affected by the economic downturn as other markets have been.

So, if you are thinking of investing in Florida real estate, then you should definitely go ahead with it.

To learn more dive into our guide, Find Your Perfect Snowbird Community in Florida: A Comprehensive Guide 

What are the Benefits of Buying Property in Florida as a Canadian? 

There are numerous benefits of buying property in Florida as a Canadian. 

• Florida is a great place to live in and has a lot to offer in terms of lifestyle and amenities. 
• The state also offers excellent opportunities for investment and growth. The real estate market in Florida is quite strong and has the potential to generate good returns. 
• Another benefit of buying real estate in Florida as a Canadian is that the process is simple and hassle-free. The entire procedure is straightforward and can be completed without significant issues. 

Things to Consider Before Buying a Property in Florida 

Here are a few things to consider before investing in Florida real estate property, 

1. Location 

One of the most important factors to consider before investing in Florida real estate is the property’s location. You should make sure that the property is in a desirable neighborhood. This will ensure that you get good rental income from the property. 

2. Price 

Another important factor to consider is the property’s price. You should make sure that you are not overpaying for the property.  

There are several ways to determine a property’s fair market value.  

• Ongoing purchase process 
• Purchasing price  
• Closing costs  
• Mortgage loan 
• Mortgage pre-approval  
• Legal fees  
• Maintenance costs  
• Interest rates

3. Currency Exchange Rate 

Being aware of the currency exchange rate is a crucial factor. Exchange rates often fluctuate and directly impact on your mortgage loan obligations. Knowing the current rates and keeping an eye on the fluctuations will help you stay prepared if the rates spike significantly. 

4. Snowbird Regulations 

As a Canadian buying property in Florida, you must know about the relevant snowbird regulations before going ahead with any property purchase. Snowbird regulations set down that Canadians without US citizenship or green card can stay in the US for only up to six months, in a year, and not more than that. However, if they have any of the two, they may continue to stay in the US for longer. This factor impacts your decision to buy the property in Florida and its usage. 

5. Decide Your Budget

Before investing in Florida real estate, deciding upon your budget is crucial. While budgeting a purchase, you should consider closing costs, purchase prices, down payment, mortgage rates, and property taxes. On average, the closing costs in Florida are around 2.3% of the purchase price.

If you are struggling to get a US mortgage as a Canadian citizen, then HomeAbroad can connect you with a lender that works with international buyers and provide a mortgage with no US credit.

6. Property Taxes

Another thing to keep in mind is that Florida has some of the highest property taxes in the country. So, you should ensure you know all about the property tax rules, tax liabilities, and double taxation before investing.

7. Rental Yield

When investing in Florida real estate, you should ensure that you buy a perfect property that can give you good rental income.

You may like to consider a few options before locking the deal.

City	Traditional Rental Income	Traditional Cash on Cash Return	Price to Rent Ratio	Median Property Price
Old Town, Dixie County	$1,395	5.71%	14 (medium)	$231,709
Suwannee, Dixie County	$1,373	5.46%	24 (high)	$392,445
Florahome, Putnam County	$1,614	5.03%	12 (medium)	$235,980
Margate, Broward County	$1,649	4.95%	12 (medium)	$238,834
South Palm Beach, Palm Beach County	$2,580	4.67%	12 (medium)	$386,352

8. Appreciation

Another thing to remember before indulging in any international real estate transaction is that the real estate in Florida has the potential to appreciate at a reasonable rate. According to Neighborhood Scout, total appreciation in Florida was 27.41% in 2021 Q1 – 2022 Q1.

This means that you could make a handsome profit from your investment in the long run.

So, if you are considering a purchase or the process is already in the pipeline, it would help to keep these things in mind and commence international real estate transactions accordingly.

Property Management Services 

Managing the Property in Florida from Canada 

If you are a Canadian citizen or resident and you own property in Florida, there are certain things you need to do to comply with Florida law. 

• You must appoint a Florida-licensed agent to represent you and your interests in Florida. This can be done by signing a power of attorney form. 
• You must also provide your Florida-licensed agent with a copy of your passport and proof of Canadian residency. 
• Your Florida-licensed agent will be responsible for managing your property in Florida, including paying taxes, insurance, and other expenses. 

It is important to note that you are still responsible for all debts and liabilities associated with your property in Florida. Therefore, keeping track of all expenses and income associated with the property is essential. 

For a detailed view check out our guide Property Management in the USA as a Foreigner – A Beginner’s Guide! 

Renting Out the Property 

• Do the research for rental demand in your intended purchase area to understand potential rental income. 
• Consider peak seasons and rental demand during those months if you plan to use the property as a vacation home. 
• Hire a reliable property management service to take care of your investment while you are away. 
• Work with a real estate agent experienced in foreign national transactions, preferably a CIPS (Certified International Property Specialist) designated agent. 
• Be aware of tax implications, including capital gains upon selling the property and taxes on rental income in the USA. 
• Budget for property taxes that you’ll be responsible for paying on your US property. 
• Understanding these financial aspects will help you plan for a successful return on investment in your US property. 
• Property management companies stay up to date with local landlord-tenant laws and regulations, ensuring that the property is compliant with all legal requirements. 

Tips for Canadians Buying Property in Florida 

1. Gaining Insights into the Local Market 

Explore the local market thoroughly, including property values, trends, and neighborhood traits. Seek guidance from a local real estate agent working with foreign buyers.  

2. Financial planning  

Discover specialized mortgage solutions tailored for foreign buyers, whether they possess a US credit history or not. 

3. Familiarize yourself with taxation and legal matters. 

Seek guidance from a tax advisor or real estate attorney experienced in international transactions to gain insights into tax regulations and legal obligations or you can choose a CIPS agent who will help and consult you from the start to last of your home journey. 

4. Coordinating the funds transfer 

Minimize currency exchange risks with a knowledgeable financial institution. Consider hedging strategies and CIPS agent assistance for smooth fund transfers. 

5. Utilize expense offsets for U.S. income tax purposes 

Real estate investors can opt to deduct expenses from their income to take advantage of the IRS’s favorable tax treatment for such investments. 

6. Contemplate property management 

For investors managing their property remotely, consider employing property management services. Hire a professional company experienced in working with foreign investors to handle tenant management, maintenance, and repairs. 

7. Understanding Cultural and Language Differences 

Choose experienced professionals to bridge cultural and language gaps. CIPS agents are trained for foreign clients’ needs. 

8. Hiring CIPS Agent  

Leverage CIPS agents’ expertise in global markets, regulations, and cultural considerations for hassle-free cross-border property transactions. No fees required for connecting with a CIPS agent through HomeAbroad. 

Best resources for Buying Property in Florida as a Canadian 

There are numerous resources available for Canadians looking to buy property in Florida. The internet is a great place to start your search. Websites like HomeAbroad offer information and resources on topics related to global investors, US newcomers, and foreign nationals willing to invest in US real estate. HomeAbroad also connects you with CIPS agents who are experts at dealing with international real estate purchases and mortgages. It also puts you across with US-based mortgage lenders, who will help you buy your dream home in Florida even if you don’t have a US credit history. 

You could also contact a real estate agent, a CIPS, or a mortgage broker to get more information on the subject. These professionals can provide you with valuable insights and guidance on the process of buying property in Florida as a Canadian. 

Conclusion 

Buying property in Florida as a Canadian is a relatively simple process, but it is essential to be prepared and to do your research before making any decisions. By following the steps mentioned in this article, you can be sure that you will find the perfect property and have a smooth and successful purchase experience.

Frequently Asked Questions