British buyers need to understand the US taxation system. The US taxation system is a complex one and completely
different than that in the UK. The US Taxation system involves payments to at least four different levels of government: local, regional, state and federal. Florida is one of only 7 states that does not levy personal income tax.
BRITISH BUYERS AND THE US TAX SYSTEM
One benefit for Brits looking to buy in the USA, is the Double Taxation Treaty between the US and the UK, which prevents double payment of taxes. It is important that you talk to a tax specialist, to understand the tax implication for your own
This state ranks lower than many other US states in terms of the tax burden it imposes. More than half of its non-federal
revenue is collected at the local level, the majority being through property taxes approximates to about 1.5 per cent of a
property’s value per annum.
For those looking to buy for an income property, it is
important to know that in Florida, all rental income is subject to tax and is charged on a sliding scale, currently 15 to 34
percent, depending on the amount of income from renting. Intangible personal property, such as stocks, bonds, mutual funds, etc. is also taxable. Florida currently does not have an intangible tax.
If you are not planning to rent out your home, you will not be required to complete a US tax return each year. Unless they have other types of US income such as interest, dividends, or are claiming a refund for tax withheld at source.
Sales and Use taxes provide over half of Florida revenue. Sales tax is applied to most retail items, except groceries,
medications, car rentals, theatre tickets and most service. The Florida current sales tax rate is currently 6%.
BRITISH BUYERS AND THE US TAX SYSTEM – BY SHELLEY FREEMAN