Canadian Florida Land Trusts
Canadian Florida Land Trusts are unique entities which allow Canadian citizens to hold title to real estate in the state of Florida. There are however items that a Canadian citizen must look at before beginning the process of transferring funds for the express purpose of purchasing any type of property in this way. U.S. estate tax laws, as well as the capital gains inclusions, can create unforeseen difficulties if the buyer is unaware of the correct procedures to follow in order to protect themselves before moving forward.
While Canadian Florida Land Trusts are expressly formed to be beneficial to Canadian's wishing to purchase land in the USA there are no general rules that can be set up to imply ownership within the United States unless certain guidelines are followed prior to the trust moving ahead. Anyone who has dealt from within the USA knows that Florida has very complex probate rules as well as creditor protection issues that must be examined before proceeding.
Once these things have been worked out then the benefits that come with holding property thru a Canadian Florida Land Trust can be extremely rewarding. The protection rules protect any beneficiary's interest in the property in question because nothing is available for disclosure until the beneficiary decides to sell, or through a court order. These rules must be adhered to unless the owner gives express permission. Florida law also protects an owner's beneficial interest in personal property which will avoid probate requirements normally subject to this type of property purchase including a home or condominium. It also guards against any probate problems at the time of an owner's death. It substitutes as a will and provides information on property distribution. This includes instructions for any partnership aggreements. It outlines partner's rights and the interests thereof at time of death.
The use of Canadian Florida Land Trusts isn't subject to any state imposed interest of transfer due to it not being subject to transfer tax. Because you can choose who is the trustee of the property, which is usually the owner, you as the bearer of the contract will have full management of the property. The suggestion of an individual ownership land trust is further enhanced by the fact that your state income tax will receive a tremendous break if set it up in this way. Individual ownership tax rates are lower than a property held through a corporation. Basically if you hold onto your individual trust for over a year the capital gains tax rate is 15% as opposed to the corporate rate of 34%. Issuing a land trust under a corporation can raise the capital gains as high as a combined tax rate of 40% negating much of the earnings on the property.
For a thorough explaination of Canadian Florida Land Trust laws you can contact Cheryl Stein for personalized assistance.