Florida cash buyers exploiting tax-dodge loophole

An investigative report in The Miami Herald newspaper this week has reported that Florida, which currently accounts for a third of all the “foreign-backed property transactions” in the USA and is the country’s “number one state for international residential real estate sales,” is losing out on large of amounts of property tax revenues as deals increasingly go through in cash and the buyers concerned register themselves offshore.

“Investors in the Florida housing market have found a way to avoid paying everything from state title transfer fees to federal capital gains taxes,” says the newspaper. “How? By going off-shore, to places like the Caribbean island of Nevis.”

76% of Florida’s overseas property buyers currently pay in cash and, says The Miami Herald, “a loophole is leaving the tax man's pockets empty when investors set up a shell company in an off-shore tax haven to buy that Florida condo.”

Local agent R.M. Woodnutt, based in Gibraltar Fla, says tax avoidance is definitely the name of the game in Florida right now. "If you transfer the stock in the offshore company and do not actually sell the company or the real estate property outright, then you certainly avoid paying any taxes on the transaction,” he says. “That is the beauty of all this."

Source: OPP.org.uk