Financial benefits
A Florida rental gives a Canadian portfolio U.S.-dollar income and a hard asset outside the Canadian housing market. Many Canadians use the property for part of the winter and rent it the rest of the year, which spreads carrying costs.
Currency cuts both ways. Buying when the Canadian dollar is weak costs more upfront, but rent and sale proceeds are earned in U.S. dollars. Several Canadian banks with U.S. operations offer cross-border mortgages based on Canadian credit history.
Political and practical benefits
Same time zone for Ontario and Quebec, short flights, familiar legal concepts and English-language contracts make Florida an easy second market. Canadians generally don’t need a visa for visits, but time in the U.S. is limited: track your days, and if you spend long winters in Florida, ask your advisor about the closer-connection exception (IRS Form 8840) so you aren’t treated as a U.S. tax resident.
Tax considerations
- FIRPTA: when a foreign person sells U.S. real estate, the buyer generally withholds 15% of the gross sale price for the IRS. The withholding is a prepayment, and the actual tax is settled on the seller’s U.S. return.
- Rental income: by default, 30% of gross rent is withheld. Most investors elect to be taxed on net income instead, which lets them deduct expenses and depreciation and file a U.S. nonresident return each year (an ITIN is needed).
- Estate tax: nonresidents who aren’t U.S. citizens get only a $60,000 U.S. estate tax exemption on U.S. assets unless a treaty improves it. Ownership structure matters.
- Florida: no state personal income tax. Property taxes and insurance are the main carrying costs, and both should be budgeted before you buy.
- Treaty credit: U.S. tax paid on Florida rental income can generally be credited against Canadian tax on the same income.
- Estate tax: the treaty gives Canadian residents a prorated share of the U.S. unified credit, based on how much of the worldwide estate is in the U.S. That is often far better than the $60,000 default.
- Reporting: a U.S. rental property that cost more than C$100,000 is generally reportable on Canada’s Form T1135. Personal-use property is excluded.
- At death: Canada’s deemed disposition rules and U.S. estate tax both apply, with treaty relief available. Plan this one with a cross-border advisor.
Residency pathways
Buying property doesn’t give U.S. residency. Canadians are eligible for the E-2 treaty investor visa, which requires investing in and running an active U.S. business, not owning a rental. Canadian visitors can usually stay up to six months a year, with limits.
Next steps
Irina helps international investors choose the right Florida market and property, coordinates with your tax advisor and lawyer, and manages the purchase remotely if you can’t travel. Read the buying guide for foreign nationals, see financing options for non-residents, or run the rental numbers.
Not legal or tax advice. This article is general information, not legal, tax or immigration advice. Tax rules, treaties and exchange rates change. Before you buy, talk to a cross-border tax advisor and a lawyer licensed in the relevant countries. Irina Manets is a licensed real estate sales associate with CENTURY 21 Stein Posner and does not provide tax or legal advice.