USA – FLORIDA Law and Practice Contributed by: Jennifer Jordan McCall, Drew Reitz and Christine Tsai, Pillsbury Winthrop Shaw Pittman LLP
under the “Save Our Homes Act,” the assessed value of the homestead property cannot be increased by more than 3% above the last year’s assessed value (or the consumer price index, whichever is lower). Moreo - ver, Florida’s Constitution allows for certain creditor protections for homestead properties within a certain acreage. 1.3 Income Tax Planning Many tax planning opportunities exist for Florida residents. Florida is a favourable state for income and estate tax planning, as it does not impose state income taxes, state estate taxes, or state estate tax - es. Nor are there state inheritance taxes if an indi - vidual inherits property from someone else. It also has strong real property exemptions and protections for a person’s permanent residence, as long as certain requirements are met (as described in 1.2 Exemp- tions ). Non-residents of Florida may also benefit from Florida’s favourable income tax regime, combined with its Rule Against Perpetuities law, allowing trusts governed by Florida law to last for up to 1,000 years. However, various requirements of Florida law, such as the requirement of annual accountings and mandatory disclosure of trusts to beneficiaries, may offset these benefits – see 2.6 Transfer of Assets: Vehicle and Planning Mechanisms . 1.4 Taxation of Real Estate Owned by Non- Residents Except as noted below, Florida law does not restrict or limit the purchase of real estate by foreign investors. Foreign investors are not eligible for the homestead exemption. Given the popularity of foreign investment in Florida real estate, the tax implications become most preva - lent at sale. Buyers and sellers should become familiar - ised with the Foreign Investment in Real Property Tax Act (FIRPTA). Persons who purchase US real property from foreign persons are required to withhold 15% of the amount realised on the sale, exchange, gift, liqui - dation, etc. The withholding amount is applied to the total tax due by the foreign transferor. In 2023, Florida enacted a law which prohibits own - ership of certain real property by “foreign principals” from “foreign nations of concern”. The countries
include China, Russia, Iran, North Korea, Cuba, Ven - ezuela, and Syria. The law primarily aims to restrict the conveyance of agricultural land and land located within a 10-mile radius of military installations and critical infrastructure facilities. Violations of this law by buyers or sellers may result in incarceration, fines, and/or forfeiture of the property. 1.5 Stability of Tax Laws The US tax laws are highly dependent upon which political party controls the US House of Representa - tives, the US Senate, and the Presidency. The two major US political parties have very different view - points on the topic of taxation, both from an income tax perspective and a transfer tax perspective. Of note is the proposed “One Big Beautiful Bill”, which would not only extend and make permanent many of the 2017 Tax Cuts and Jobs Act provisions, but would also introduce new tax benefits and phase out other existing tax incentives, changing the current US tax landscape. There are also proposals that have been outlined by certain political figures to severely limit certain transfer tax planning vehicles, including Gran - tor Retained Annuity Trusts as well as “grantor trusts” in general. None of those proposals have yet been adopted, but they could be in the future. Florida is more stable, as it does not have a state income tax, gift tax, or estate tax, and there are cur - rently no plans for these taxes to be enacted. 1.6 Transparency and Increased Global Reporting The federal government enacted the Corporate Trans - parency Act, which is a sweeping statute aimed at curtailing money laundering. The Act requires t “ben - eficial owners” of “reporting companies” to report their beneficial ownership information to a database controlled by the Financial Crimes Enforcement Net - work (FinCEN). After the Act was subject to litiga - tion regarding its constitutionality, FinCEN provided updated guidance through an “interim final rule” as published in the Congressional Record on 26 March 2025. This interim final rule is subject to public com - ment until 27 May 2025, but its terms are currently effective as written. FinCEN anticipates that a final rule will be issued in 2025 “in light of those comments”.
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