This is the exposure most foreign buyers of US property do not know they have, and the moment to address it is before closing.
This page frames the exposure. The planning is for your counsel. Contact the desk at Miami Dossier for the current position on any building we cover.
US real property is a US-situated asset. A non-resident who is not domiciled in the United States is subject to US estate tax on US-situated assets held at death.
The exemption available to a non-resident is very small, far below the amount available to a US citizen or domiciliary. Above that threshold, rates rise steeply.
A single Miami residence can therefore create a meaningful US estate liability for a family that has no other connection to the United States. This is not an exotic scenario. It is the ordinary position.
The United States has estate tax treaties with a limited number of countries. Where one applies it can materially change the position, sometimes providing a proportionate share of the larger exemption.
Coverage is patchy and follows no pattern a buyer would guess. Several major sources of Miami buyers have no US estate tax treaty at all, including Brazil, Colombia, Mexico, Argentina, Peru and Venezuela.
Buyers from those countries carry the exposure in its full form, and it is very rarely raised in a sales gallery.
Placing the property in a single-member Florida LLC is widely believed to solve this. It generally does not, because such an entity is commonly disregarded for these purposes and the underlying US real property remains US-situated.
Structures that address the exposure exist, typically involving a foreign entity or an appropriately drafted trust, and they carry establishment cost, annual cost and reporting obligations.
Whether that cost is worth paying depends on the value of the asset, your domicile, your family situation and whether a treaty applies. It is a real calculation with a real answer, and it needs someone qualified to run it.
Addressing this before closing is ordinary planning. Addressing it afterwards means transferring the property into a structure, which can trigger documentary stamp tax and other costs, and may affect financing.
Addressing it after death means the estate deals with it under the worst possible conditions, with a US filing obligation and a property that generally cannot be transferred until it is resolved.
We are not tax advisers. We raise it because a very large proportion of foreign buyers in this market have never had it raised with them, and the moment when it is cheap to fix is short.
Most foreign buyers hear about this for the first time from an estate lawyer, years too late. Ask the desk at Miami Dossier and we will make sure it is on the table early.
We hold no inventory of our own and we are not the developer. Ask the desk at Miami Dossier and we will tell you what applies to your situation, what does not, and where we would not proceed. Here that starts with whether a treaty covers your country, which changes the whole calculation. Where the question is legal, tax or immigration, we will introduce you to advisers who handle that properly rather than answering it ourselves.