Buying through an LLC: when it makes sense, and what FIRPTA does

What an LLC genuinely solves

• Separating assets. If something happens at the property and there is a lawsuit, exposure is in principle limited to the company's assets rather than your personal estate.
• Privacy on the record. The owner appearing in the county's public records is the company. Your name is not on the recorded deed.
• Several partners with clear rules. If two or three people buy together, the operating agreement defines contributions, splits and what happens if one wants out. It settles far more than simple joint ownership.
• Estate planning. Transferring company interests is usually simpler than transferring real estate, and it avoids a Florida probate. This has to be designed with an attorney, not improvised.

On that last point, a warning almost nobody hears in time: a non-resident has a very low exemption under the federal estate tax on assets situated in the United States. It is one of the strongest reasons to structure properly from the outset, and exactly the kind of question that calls for a specialized attorney.

What an LLC actually costs

Market ranges as of November 2026, for planning. Formation and accounting costs vary widely by provider and by how complex the case is.

It matters to understand that an LLC does not reduce property tax and does not give access to the homestead exemption. If the home will be your primary residence, buying in a company's name normally costs you that benefit, which from 2027 is worth far more than it used to be.

The filing that catches people out: Form 5472

This is the part I want to make plain, because it is where most people get into trouble without knowing. A single-member LLC with a foreign owner is treated, for tax purposes, as a disregarded entity, and for tax years beginning in 2017 onward it must file Form 5472 each year alongside a pro forma Form 1120.

• It is filed even with no activity. Having had no transactions is no excuse: the obligation comes from existing with a foreign owner.
• The penalty for not filing is 25,000 dollars. Per form and per year, with additional charges if the omission continues after the IRS notice.
• It requires an employer identification number (EIN) for the company, even with no employees and no tax due.
• You need an accountant familiar with this form. It is not an ordinary return and many local preparers do not handle it.

None of these points is a reason to avoid an LLC. They are reasons to use one with an accountant from day one and to budget that fee into the return.

FIRPTA: what gets withheld when you sell

FIRPTA is the law requiring part of the price to be withheld when a foreign person sells US real estate. The first thing to understand is that it is not an extra tax: it is an advance. If the tax actually owed is lower, the difference comes back when the year's return is filed.

Rules in force as of November 2026. The residence exceptions apply when the buyer is an individual and require a signed affidavit from them. It is possible to request reduced withholding from the IRS, using the corresponding form, when the estimated real tax is lower. Confirm your situation with a licensed accountant.

The withholding is made by the buyer through the title company, and it is calculated on the sale price, not on the gain. That distinction throws almost everyone: you can sell with a small gain and still see 15% of the full price withheld until the return is filed.

My practical recommendation

I do not give tax or legal advice, and I do not pretend to. What I do is put these questions in front of you in time, before an ownership decision gets made by default, and point you to professionals who work with investors from abroad.

General and educational information, current as of November 2026. It is not tax, legal, accounting or investment advice. Filing obligations, penalty amounts and withholding rules are set by federal law and must be confirmed with an accountant or attorney licensed in the United States for your specific case.