FIRPTA, LLCs and Trusts: How International Buyers Should Hold a South Florida New-Development Condo
FIRPTA withholding, the U.S. estate tax for nonresidents, federal beneficial-ownership reporting and Florida filing costs all turn on how an international buyer takes title to a South Florida condo. Here is what each rule says as of October 2026, sourced to the IRS, FinCEN and Florida agencies, and what to settle with your advisers before you sign.
FIRPTA does not apply when a foreign buyer purchases a new condo from a U.S. developer. It applies later, when the foreign owner sells or assigns the contract: the buyer generally must withhold 15% of the amount realized, per the IRS. A single-member LLC does not change that, because it is disregarded for tax purposes. Settle the structure with a Florida attorney and a tax adviser before signing.
Updated October 16, 2026: rates re-checked against IRS guidance.
For international buyers reserving residences in South Florida’s new towers, the name on the purchase agreement is one of the first decisions, and it is harder to change later. This guide sets out the federal and Florida rules that bear on that choice as of October 2026: FIRPTA withholding, the U.S. estate tax for nonresidents, the FinCEN beneficial-ownership rule finalized in August 2026, and Florida filing and transfer costs. Each figure links to the official source it comes from. It pairs with our foreign buyer’s guide to South Florida luxury condos.
What is FIRPTA and when does the 15% withholding apply?
The Foreign Investment in Real Property Tax Act of 1980 covers dispositions of U.S. real property interests by foreign persons. As of October 2026, the IRS’s FIRPTA withholding page says the purchaser must generally withhold 15% of the amount realized (10% for dispositions before February 17, 2016). The amount realized is the cash paid or to be paid, plus the fair market value of other property transferred, plus any liability the buyer assumes or that the property is subject to. It is measured on the price, not the gain. The buyer is generally the withholding agent, and a buyer who fails to withhold from a foreign seller may be held liable for the tax, per the IRS.
The withholding is a collection mechanism, not a separate tax. The Instructions for Form 8288 (revised January 2026, current as of October 2026) say it “serves to collect U.S. tax that may be owed by the foreign person.” The buyer files Form 8288 and pays the amount withheld to the IRS by the 20th day after the date of transfer, per the same instructions.
Two residence rules can lower the amount, per the Form 8288 instructions and IRS Publication 515 (2026), as of October 2026. If the buyer acquires the property for use as a residence and the amount realized is $300,000 or less, no withholding is required; that exception does not apply if the actual buyer is not an individual. If the buyer acquires the property as a residence and the amount realized is more than $300,000 but not more than $1,000,000, withholding is required at a reduced rate of 10%. In both cases the buyer or a family member must have definite plans to reside there for at least 50% of the days the property is used by any person during each of the first two 12-month periods after the transfer (IRS FIRPTA FAQ Q6). Above $1,000,000 the reduced-rate bands do not apply, per the IRS.
Withholding can also be reduced by an IRS withholding certificate. Either the buyer or the seller may apply, in certain cases on Form 8288-B, for example when the standard withholding would exceed the seller’s maximum tax liability. The IRS normally acts within 90 days of receiving a complete application (Form 8288 instructions; IRS FIRPTA FAQ Q13). The buyer must still withhold at closing while an application is pending, but does not have to file Form 8288 and pay over the amount until the 20th day after the IRS mails the certificate or a notice of denial, per the Form 8288 instructions.What this means for a new-development purchase: FIRPTA withholding applies to dispositions by foreign persons, so it does not arise when a foreign buyer purchases a new residence from a U.S. developer. It becomes relevant later, when the foreign owner sells, and that includes a sale of the contract before completion. The IRS says withholding applies when a foreign person assigns the right to buy U.S. real property. In its example, a foreign buyer under a $400,000 contract sells the right to purchase for $30,000, and the assignee must withhold $4,500, which is 15% of the $30,000 amount realized, and file Forms 8288 and 8288-A (IRS FIRPTA FAQ Q4, as of October 2026). In the IRS example, the withholding is figured on the $30,000 the assignor receives, not on the $400,000 contract price. Our guide to staged pre-construction deposits explains how much cash a contract ties up before closing.
Should a foreign buyer purchase in an LLC or personally?
Holding a condo personally involves no entity, and the individual’s name appears on the recorded deed. A single-member Florida LLC puts the company’s name on the deed. For federal tax purposes, Publication 515 (2026) says a business entity that is not a corporation and has a single owner may be disregarded as an entity separate from its owner. For FIRPTA, the Form 8288 instructions (as of October 2026) say a disregarded entity cannot be the transferor; the person treated as owning its assets is the transferor. A single-member LLC owned by a nonresident therefore does not remove FIRPTA withholding when the condo is later sold.
The U.S. estate tax is a separate question. Per the Instructions for Form 706-NA (revised September 2025, current as of October 2026), the executor of a nonresident non-citizen’s estate must file Form 706-NA when the decedent’s U.S.-situated assets, together with certain lifetime gifts, exceed $60,000. Unless a treaty provides otherwise, real estate physically located in the United States is a U.S. asset for this purpose. The maximum unified credit is generally $13,000. The tentative tax is figured with the unified rate schedule in the Instructions for Form 706 (revised July 2026), which runs from 18% to 40%. For comparison, the IRS lists a $15,000,000 basic exclusion amount for 2026 for estates of U.S. citizens and residents (IRS, what’s new for estate and gift tax, as of October 2026). The Form 706 instructions add that the executor of a nonresident non-citizen’s estate cannot make a portability election.
A condo held personally is U.S. real estate under those instructions. Do not assume a single-member LLC changes the estate-tax picture: how an LLC interest is treated for a nonresident’s estate depends on the facts and should be confirmed with a cross-border tax adviser. The Form 706-NA instructions also list the countries with death tax treaties in effect with the United States, which can change how assets are treated.
Federal beneficial-ownership reporting changed in August 2026. On August 11, 2026, FinCEN issued a final rule, published in the Federal Register on August 14, 2026 (document 2026-16576) and effective that day. As of October 2026, FinCEN’s beneficial ownership page says U.S. companies are exempt and no longer required to file BOI reports, and U.S. persons do not need to provide BOI to reporting companies. Foreign reporting companies, entities formed under the law of a foreign country and registered to do business in a U.S. state, still report their beneficial owners other than U.S. persons, per the Federal Register notice. A Florida LLC is a U.S. company, so it does not file a BOI report under the current rule.
What does a trust structure change?
A trust changes who holds title and who controls the residence, and the IRS applies specific FIRPTA rules to trusts. As of October 2026, the Form 8288 instructions list a foreign trust as a foreign person, so a sale by a foreign trust is subject to withholding. For a grantor trust, the IRS says withholding applies when a foreign person is treated as a grantor of the property, to that person’s share (IRS FIRPTA FAQ Q2). Domestic trusts and estates with foreign beneficiaries follow separate withholding rules under section 1445(e), set out in the Form 8288 instructions.
The 21% rate in IRS FIRPTA guidance is a corporate rule. Per the IRS FIRPTA withholding page as of October 2026, a foreign corporation that distributes a U.S. real property interest must withhold 21% of the gain it recognizes on the distribution to its shareholders who are foreign persons. It is not the rate on an ordinary condo sale, which remains 15% of the amount realized unless an exception or a withholding certificate applies.Whether a trust keeps a residence out of a nonresident’s U.S. taxable estate depends on how it is drafted, who funds it and what powers that person keeps. Those are drafting questions for a Florida attorney and a cross-border tax adviser, and the answer differs from buyer to buyer. A trust also adds trustee and fiduciary costs and changes how directly the buyer controls the property. Our South Florida pre-construction contract guide covers the developer paperwork any structure has to fit.
What does each structure cost to maintain annually?
Holding personally adds no entity filings beyond the owner’s own tax returns. A Florida LLC must file an annual report with the Division of Corporations each year to stay active. As of October 2026, the Sunbiz fee schedule lists the LLC annual report at $138.75, or $538.75 if received after May 1, and the Sunbiz annual report page says an entity that has not filed by the third Friday in September faces administrative dissolution. Forming a new Florida LLC is listed at a $100 filing fee plus a $25 registered agent fee. Registered-agent service and federal return preparation are separate costs set by providers. Trusts carry trustee and fiduciary-return costs, and corporations carry their own federal filings; the state does not set those amounts.
These costs add to the carrying costs every owner models; see our guide to HOA fees at South Florida luxury new developments.
Documentary stamp tax on the deed is a transfer cost to plan for. As of October 2026, the Florida Department of Revenue lists a rate of $0.70 per $100 of consideration in every county except Miami-Dade, where the rate is $0.60 per $100 plus a $0.45 per $100 surtax; the Department says the surtax is not due on a document that transfers only a single-family dwelling, and its page does not say how it treats a condominium unit, so ask your closing agent. The Department’s examples show that a later deed into a trust, or between related companies, can be taxed on the consideration, including mortgage debt on the property, and that a deed reciting nominal consideration still owes tax. On the federal side, the IRS says a nonresident who contributes U.S. real property to a foreign corporation in exchange for its stock is generally subject to FIRPTA withholding (IRS FIRPTA FAQ Q16). Both points are reasons buyers settle the vesting name before closing rather than after.Florida’s homestead exemption, which can reduce a home’s taxable value by as much as $50,000 and qualifies it for the Save Our Homes assessment limitation, applies when the owner makes the property his or her permanent residence or that of a dependent, per the Florida Department of Revenue as of October 2026. Nonresident owners should not assume it applies; our homestead exemption guide for luxury buyers covers the details.
What should buyers settle before signing the pre-construction contract?
Decide the vesting name before a reservation becomes a binding contract. If an entity will buy, it has to exist before it can be named in the purchase agreement. Read the assignment clause to see whether it allows a transfer to an affiliated entity, and ask the developer in writing whether it will change the purchaser name after signing and on what terms. Our South Florida luxury condo due diligence checklist and the guide to financing pre-construction in 2026 cover the rest of the review.
Taxpayer numbers follow IRS timing rules. As of October 2026, IRS FIRPTA FAQ Q12 says a foreign person with no other valid reason for an ITIN cannot request one before entering into a contract to sell U.S. real property; once a legally binding sale contract exists, the seller can apply on Form W-7 under the exception for FIRPTA withholding. Ask a tax adviser whether you have another basis for an ITIN, such as a U.S. filing requirement, and when to apply.Test the structure against two events before signing: a resale or assignment during construction, and a death before completion. Delivery windows on new towers can run for years; read our guide to reading completion risk in South Florida pre-construction and the list of new developments delivering 2027 to 2030 alongside the contract.
Questions for your attorney and tax adviser
Take these to a Florida real estate attorney and a cross-border tax adviser before you sign. This list does not answer them; the answers depend on your facts.
- Whose name, or which entity, should be on the purchase agreement, and can it be changed before closing?
- How would a single-member LLC be treated in my case for FIRPTA, U.S. income tax and U.S. estate tax?
- Does my country have an estate tax or income tax treaty with the United States, and how would it apply to this residence?
- What U.S. estate tax could apply if I died before closing, or after, under each structure we are considering?
- If I assign the contract before completion, how much would be withheld, and should we apply for a withholding certificate?
- Do I have a basis to apply for an ITIN now, or only once I have a binding sale contract?
- Which federal and Florida filings would each structure require every year, and what would they cost?
- Would documentary stamp tax apply if the residence moved into an entity or trust later?
- Does any foreign entity in the structure have to file a beneficial-ownership report with FinCEN?
- If the residence is rented, how would the rental income be reported and taxed?
Structure first, sign second. To see which towers are launching, topping off and delivering across Miami, Fort Lauderdale and the Palm Beaches, explore Haute Residence’s coverage of South Florida new developments.HL Real Estate Group can request current price sheets, floor plans, deposit schedules and rental rules for South Florida new developments.
Frequently Asked Questions
Does FIRPTA apply when a foreign buyer purchases from a U.S. developer?
No. FIRPTA withholding applies to dispositions of U.S. real property by foreign persons, per the IRS as of October 2026. Buying a new residence from a U.S. developer involves no foreign seller, so no FIRPTA withholding arises on the purchase. The foreign owner’s exposure comes later, when they sell the residence or assign the purchase contract.
What is the standard FIRPTA withholding rate in 2026?
Generally 15% of the amount realized, per the IRS FIRPTA withholding page as of October 2026. The amount realized is the cash paid, plus the fair market value of other property transferred, plus liabilities assumed. The buyer files Form 8288 and pays the withholding to the IRS by the 20th day after the transfer, per the Form 8288 instructions.
When does the 10 percent or 0 percent rate apply?
Per the Form 8288 instructions and Publication 515 (2026), no withholding applies when an individual buys the property as a residence for $300,000 or less, and 10% applies above $300,000 up to $1,000,000. The buyer or family must plan to reside there at least 50% of the days it is used in each of the first two 12-month periods.
Can withholding be reduced below the statutory rate?
Yes. The buyer or seller can apply for an IRS withholding certificate, in certain cases on Form 8288-B, when the standard withholding would exceed the seller’s maximum tax liability. The IRS normally acts within 90 days of a complete application, per IRS guidance as of October 2026. The buyer still withholds at closing while an application is pending.
Does FIRPTA apply if I assign my pre-construction contract?
Yes, if you are a foreign person. The IRS says withholding applies when a foreign person assigns the right to buy U.S. real property (FIRPTA FAQ Q4, as of October 2026). In its example, a $30,000 assignment price means $4,500 is withheld, 15% of the amount realized. Our guide to assigning a pre-construction contract covers contract terms.
Does a single-member LLC protect a foreign owner from U.S. estate tax?
Do not assume it does. A single-member LLC may be disregarded for federal tax purposes, and U.S. real estate is a U.S.-situated asset for a nonresident’s estate, per IRS guidance as of October 2026. How an LLC interest is treated for estate tax depends on the facts, so confirm it with a cross-border tax adviser before signing.
How much U.S. estate tax exemption does a nonresident get?
Per the Form 706-NA instructions (revised September 2025, current as of October 2026), the estate must file when U.S.-situated assets plus certain gifts exceed $60,000, and the maximum unified credit is generally $13,000. Estates of U.S. citizens and residents have a $15,000,000 basic exclusion in 2026, per the IRS. A nonresident’s executor cannot elect portability.
Do Florida LLCs still file beneficial-ownership reports with FinCEN?
No. Under FinCEN’s final rule issued August 11, 2026 and published in the Federal Register on August 14, 2026, U.S. companies are exempt from beneficial-ownership reporting and U.S. persons need not provide their information. Foreign reporting companies registered to do business in the U.S. still report their foreign beneficial owners, per FinCEN as of October 2026.
What are Florida documentary stamp taxes on a condo deed?
Per the Florida Department of Revenue as of October 2026, the rate is $0.70 per $100 of consideration in every county except Miami-Dade. Miami-Dade charges $0.60 per $100 plus a $0.45 per $100 surtax. The Department says the surtax is not due on a document that transfers only a single-family dwelling, and its page does not say how it treats a condominium unit. Confirm the amount for your deed with your closing agent.
Can I move my condo into an LLC or trust after closing?
It can be done, but it has costs. Florida Department of Revenue examples show a later deed can owe documentary stamp tax on the consideration, including mortgage debt, and the IRS says contributing U.S. property to a foreign corporation for stock is generally subject to FIRPTA withholding. A lender’s consent may be needed. Ask your attorney before closing.This article is general information, not tax or legal advice. Consult a qualified cross-border tax attorney before structuring a purchase.