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First bit of info is knowing about occupancy.
If
you are Canadian you can stay in your Florida home for up to and 1 day less than
6 months without incurring a need for permission from the U.S. authorities and
without both tax and health care ramifications in Canada.
One day more than 6
months and you could lose your OHIP benefit if it was discovered you were out
of the country. Pretty easy to do when you know that your comings and goings are
recorded at the border.
To purchase a Florida property you will need to
write an offer and give your deposit money, called earnest money in the
U.S. when you cross the border to an escrow agent (usually a lawyer)or a
realtor.
They have a legal obligation to hold your deposit until one of
2 things can happen 1/ the seller hands him or her a deed conveying
title and a “GUARANTEE” that they in fact do own the property. 2/ The
deal falls through, in which case your deposit money comes back to you.
If the lawyer determines you get what you are
meant to get then there will be a closing where your money is exchanged
for the title and you will get the keys to your property.
So who is making the “GUARANTEE”? In Florida as
here in Canada now there are Title Insurance Companies. So your lawyer
would supply you with a policy issued by a big well –known insurance
companies that have been in business for decades and that are highly
solvent. They do research to make sure the seller owns the property and
to make sure there are no others claims or liens against the property.
If the title is clear then the lawyer will issue
you an insurance policy. There is a clause in this policy that insures
the insurance company will pay you the price you paid for the property
in the rare occurrence that despite their research the seller did not
own the property and that if he did and there was a lien that wasn’t
found then the insurance company will pay off the lien. It’s a good
system that works well.
If you have heard that property insurance and
property taxes in Florida are higher than elsewhere then you are
correct. They are higher than states that have income tax and death
tax. However, there are ways to reduce some of these costs plus the
savings on the purchase cost at the moment should substantially offset
these costs, plus of course the lack of other taxes and the generally
lower tax brackets that exist in Florida.
If the property insurance costs seems high it is
quite simple buy something that was built after 1992 and that is not
right on or next to the beach. Property insurance is much more
reasonable for these properties as the building codes changed in 1992
and were much improved plus beach front is of course more subject to
winds and hurricanes.
Properties built after 1992 perform much better in
high winds and this is why they cost less to insure.
Currently as of today’s date property taxes are
running about $1600.00 per year for every $100,000 of property value.
Taxes are market value assessed yearly. So your taxes will be based
initially 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 Florida (the
state) only by the U.S. Federal government at rates much lower than in
Canada.
So it may be time to grab your beach towel and sun
block and check out living part of the year under the Florida Sun.
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