No doubt you've heard about the mess of the Florida real estate market with the sub-prime mortgage disaster. Many thousands of people are losing their homes, while entire new subdivisions sit vacant, yet ready for occupancy.
Thoughts of escape to the fun and sun, after five months of a cold and snowy Canadian winter, appeals to many, and now just might be the time to consider your Florida getaway or rental property
From now and for next couple of years , may be the best time to buy in Florida, price-wise. If you picture yourself sitting on your patio, entertaining business associates or friends on a balmy summer's night, there's no time like the present to educate yourself about the Florida market.
Buying a home in Florida can be a confusing prospect for many people, and this often stops them from making their move. The buying and closing process, getting a mortgage, income, death and property taxes are all part of the deal, and without help from qualified and knowledgeable agents, this can seem like a daunting task. However, help is available.
Closing a Florida Home
An important consideration on this topic is your knowledge of U.S. occupancy laws.
No doubt you've heard about the mess of the Florida real estate market with the sub-prime mortgage disaster. Many thousands of people are losing their homes, while entire new subdivisions sit vacant, yet ready for occupancy.
Thoughts of escape to the fun and sun, after five months of a cold and snowy Canadian winter, appeals to many, and now just might be the time to consider your Florida getaway or rental property
From now and for next couple of years , may be the best time to buy in Florida, price-wise. If you picture yourself sitting on your patio, entertaining business associates or friends on a balmy summer's night, there's no time like the present to educate yourself about the Florida market.
Buying a home in Florida can be a confusing prospect for many people, and this often stops them from making their move. The buying and closing process, getting a mortgage, income, death and property taxes are all part of the deal, and without help from qualified and knowledgeable agents, this can seem like a daunting task. However, help is available.
Closing a Florida Home
An important consideration on this topic is your knowledge of U.S. occupancy laws.
If you are a Canadian, you can be in Florida for up to six months only - without permission from U.S. authorities. Anything over the six months (even a single day) can have negative tax and health-care ramifications and you could risk losing your Provincial medical coverage. Tracking your whereabouts is not difficult since your comings and goings are now meticulously recorded at the border.
When purchasing a property in Florida, you will first write an offer and then give your deposit money, to an escrow agent when you cross the border (usually a lawyer or realtor). Your escrow agent is then legally obligated to hold your deposit until one of two things happen. Firstly, the seller hands him or her a deed conveying title and a "Guarantee" that you do, in fact, own the property. Secondly, if the deal falls through, the agent ensures that your deposit money is returned to you. When the escrow agent determines that all is in order, the deal will "close". At this time your money is exchanged for the title to your Florida home, and you will receive the keys to your property.
There are "Title" insurance companies in Florida used to make these "Guarantees". Your lawyer will supply you with a policy issued by one of these companies. Research is done to ensure that the company chosen is well known and solvent. Further research is done to ensure the Florida seller owns the property and that there are no claims or liens against the property. (In Canada this is known as a title search, rather than a guarantee)
Once there is confirmation that the property title is clear, you will be issued an insurance policy. An important clause in this type of insurance policy is that the insurance company you've used is liable if it is found that the seller did not, in fact, actually won the property you just purchased. This is a very rare occurrence, however this clause is a guarantee that you will not lose your money. The insurance company will refund your purchase, in this rare instance.
You may have heard that property insurance and taxes in Florida are higher than elsewhere. This is correct. However, what you save on the purchase price in the current Florida market should substantially offset higher taxes and insurance. You could also consider only homes built after 1992, as well as homes that are not situated right on the beach. Due to changing building codes, properties build after 1992 are able to withstand higher winds from hurricane activity, and thus are less costly from an insurance standpoint.
Currently property taxes are run around $1600.00 per year for every $100,000 of property value, and are assessed annually. Initially your taxes will be based on your purchase price. However depending on how you take title if you rent the property then it can be arranged so that your expenses including interest are deducted from your income on the property. That lower net figure will not be taxed by the State of Florida rather, only by the U.S. Federal government whose rates are much lower than in Canada. Now could be the perfect time for you to grab your beach towel and live in sunny Florida during the long, cold Canadian winter.
If you are interested in investing in Florida Real Estate, the following web pages contain articles that offer information you need to know. You will want to know about cross border trusts, tax laws, and estate planning before going ahead. You can find information for that by clicking on the link at the bottom of this article. It will take you to other appropriate articles.
It is important to get qualified legal advice from a lawyer experienced in cross-border real estate and planning. The advice of a knowledgeable tax advisor would also be a good idea.
Please note that the information on these pages is not to be construed as tax or legal advice, but rather as information only. One thing to remember: Revenue Canada and Florida Laws can change without notice, so current advice at the time of your purchase is essential.
This information has been collected from workshops we have attended and are in place to help simplify the buying process for you and to offer important information you may require before making this very important purchase.
It can be difficult for investors to make the numbers work on properties in Toronto or other parts of Canada these days with Canadian real estate prices at an all-time high. So if you are planning to invest in Florida, this is a great opportunity to build your portfolio and catch some good deals while the prices are favourable and the rental numbers can make you profitable.
