Buying well is only half the job: understanding the tax burden on U.S. real estate avoids surprises and protects your investment’s profitability. Below are the key points every Brazilian owner needs to know — always with guidance from an accountant and a tax attorney.
Property tax — the annual tax on the property
Every owner pays an annual tax on the property, calculated on the assessed value of the home. Rates and rules vary by county and municipality, so the amount changes considerably from one area to another. When comparing homes, always ask for an estimate of this tax: it’s part of the real cost of holding the asset.
Tax on rental income
If the property generates rental income, that income is taxable in the United States. Foreigners without a green card have their own filing rules and generally need an ITIN to meet their tax obligations. An accountant experienced with international clients handles this painlessly.
When selling: watch out for FIRPTA
When a foreigner sells a U.S. property, there is a withholding tax on the sale amount, provided by the law known as FIRPTA. This catches many sellers by surprise at closing — which is why sale planning should start well before the property is listed.
Buy in your own name or through a company?
There are different acquisition structures — individual ownership, a U.S. company, or other forms — and each has distinct tax and estate implications. There is no single answer: the ideal structure depends on your wealth, your plans, and your tax situation in Brazil and the U.S. Decide this with an attorney and accountant before the purchase, not after.
Estate planning
U.S. assets fall under American succession rules, which can differ considerably from Brazil’s. For anyone building wealth in dollars, organizing succession is part of the investment — and the earlier, the simpler.