Buying a Retirement Property in Florida

If you’ve been thinking of cashing in on your home in Toronto, Vancouver, or other Canadian real estate hot spots to buy a retirement property in Florida, now may be the time.

Though prices for individual homes or condos in Florida have rebounded substantially since the real estate recession and are now selling briskly, there is still a big window of opportunity for closing a single home,  townhouse, or condo at prices close to what they were just before the housing recession hit in 2006.

According to official Florida Realtor figures, the average sale price of a single family home this spring was $324,839 USD, 8.3 percent higher than last year.  And the average sale price of a townhouse or condo in this spring was up $261,635 USD, up 8 percent over the comparable month last year. That’s a statewide average, which includes high price areas such as Miami-Dade, Naples, Sarasota, and Fort Lauderdale areas. In less exclusive areas, prices can be a lot less.

Given the recent strengthening of the Canadian dollar vs the American dollar, the strengthening of the US economy, and increases in wages and consumer spending power in the first six months of the year (factors which are bound to fuel an even more robust spate of home buying in coming months) it may be your last best chance to nail down a very handsome property for what Torontonians or Vancouverites would consider bargain basement.


Now here is the ‘but’

Understand that owning a home in Florida, or any other sunbelt location, does not give you a free pass to permanent residency in the US. You are still bound by the B2 visa rule which allows you, as a Canadian, to live in the US for a maximum total of six months per each rolling 12 consecutive month period.

That’s not calendar months, that’s 180 days in one single stay or an aggregation of shorter stays within one 12-month period.  And during that time, you can’t work, you can’t own or run a business, or earn an income. You are a visitor, a vacationer, a tourist, which is not all bad because as a visitor, with a provable closer connection to Canada, you can avoid paying taxes to the IRS.


Here is another but

In order to take advantage of that non-taxable alien resident status you must be able to prove a closer connection to Canada, and the best way to do that is to file IRS form 8840 each year. Follow the formula for calculating the number of days you have spent in the previous three years to see if you are in the taxable category, and even if you are, you can still avoid paying taxes to Uncle Sam by establishing the closer connection.

Also understand that because your provincial government (except for PEI and Quebec) allows you to remain eligible for health benefits if you only spend five months at home, you still cannot stay in the US for more than six months per year. These are two separate sets of rules, promulgated by different governments, and were never intended to coincide.


One last but

Private, supplemental health insurance is more essential that ever, during your entire stay, as America plods its way to a workable health insurance system. The costs of hospital stays—even a couple of hours in outpatient or in the emergency room–can ruin not only your vacation, but your household finances if you don’t have that coverage.

Most Americans have health insurance and they are covered for their healthcare needs. And if you need emergency care, you will be treated at any hospital that has an emergency room regardless of your insured status. That’s the law. But unless you have private insurance and can prove it, you will be expected to pay. Your provincial insurance won’t do.


Interested in window shopping for a house across the border? Do not forget your travel medical insurance.

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