Buying a Florida Vacation Rental as a Foreign Owner: EIN, ITIN, and LLC Basics

Florida's vacation rental market draws buyers from Canada, the UK, Germany, Brazil, and dozens of other countries. The property purchase itself is usually the easy part. The administrative stack behind it — federal identification numbers, entity registration, withholding elections, state tax accounts, county tourist tax, and a DBPR license — is where timelines slip.

This guide lays out the sequence, the forms involved, and the decisions that need professional advice rather than a checklist.

Educational information only. This is not legal, tax, or accounting advice, and it does not address treaty positions, estate tax exposure, or your home-country tax treatment. Cross-border ownership involves rules in at least two jurisdictions. Work with a U.S. tax professional experienced in nonresident real estate and, where relevant, a Florida attorney. Florida Host Desk provides administrative compliance support and does not prepare or submit tax filings, applications, or legal documents on your behalf.

The order these steps happen in

Steps 3 and 4 have the longest lead times for foreign owners, and steps 6 through 9 usually cannot be completed without them.

EIN vs. ITIN: which one you need

EIN — Employer Identification Number

An EIN is the tax identification number for a business entity. Your Florida LLC will need one to open a U.S. bank account, register for Florida sales tax, and file federal returns.

The IRS online application requires the responsible party to already have an SSN, ITIN, or EIN. Foreign applicants who do not have one are directed to apply by other means. The Instructions for Form SS-4 describe international application by telephone, and Form SS-4 may also be faxed or mailed. Expect fax and mail routes to be measurably slower than the phone route.

Get the legal name and address on Form SS-4 exactly right. A mismatch between the EIN record and Sunbiz registration causes rejections later at the Department of Revenue and at banks.

ITIN — Individual Taxpayer Identification Number

An ITIN is for an individual who has a U.S. tax filing or reporting obligation but is not eligible for a Social Security number. It is requested on Form W-7.

• The general rule is that Form W-7 is filed together with the U.S. federal tax return that creates the need for the number.
• The W-7 instructions list exceptions permitting a standalone application, including certain withholding and dispositions of U.S. real property interests.
• Identity documents must be original or certified by the issuing agency. Certified Acceptance Agents and IRS Taxpayer Assistance Centers can verify documents so a passport does not travel by mail.
• ITINs can expire if not used on a federal return for three consecutive years. An expired ITIN causes processing delays on returns and refunds.
• Each individual who files needs their own ITIN. Spouses who co-own and file jointly generally each need one.

Should the property sit in a Florida LLC?

An LLC is not automatically the right answer, but it is the most common structure for a rental property because it separates the operating activity from the individual.

An LLC also does not by itself solve U.S. estate tax exposure for non-U.S. persons, which is a separate and technical question. Discuss it with a cross-border tax adviser before assuming a structure protects you.

For the general trade-offs applicable to any owner, see LLC vs. personal ownership for a Florida Airbnb. Filing fees are published by the Florida Division of Corporations.

30 percent withholding and the section 871(d) election

This is the single most important tax concept for a nonresident landlord.

The default: gross-basis withholding

Rental income paid to a nonresident alien from U.S. real property is generally fixed, determinable, annual, or periodical income, subject to a flat 30 percent tax on the gross rent, unless reduced by treaty. No deductions. A property with $60,000 of rent and $45,000 of expenses would still face withholding computed on the $60,000.

The election: net-basis taxation

Under IRC section 871(d), a nonresident may elect to treat income from U.S. real property as effectively connected with a U.S. trade or business. The income is then taxed at graduated rates on net income after deductible expenses — management fees, cleaning, repairs, insurance, property tax, mortgage interest, and depreciation.

Mechanics worth knowing:

• The election is made with the federal income tax return and requires the return to be filed to be effective.
• Form W-8ECI is provided to withholding agents — property managers, booking platforms, and payers — to stop 30 percent gross withholding on the basis that the income is effectively connected.
• The election generally remains in effect for later years unless revoked with IRS consent.
• Filing late has real cost: deductions can be denied where a nonresident's return is not filed within the period allowed, which is exactly the outcome the election was meant to avoid.

Form 5472 and the disregarded-entity trap

A U.S. LLC with a single foreign owner is disregarded for income tax purposes but is treated as a corporation for certain reporting. It must obtain an EIN and file Form 5472 attached to a pro forma Form 1120, reporting reportable transactions with the foreign owner — including capital contributions and distributions.

• The obligation exists even in a year with no rental income and no activity beyond formation.
• Money you send from abroad to fund the LLC, and money the LLC sends back to you, are typically reportable transactions.
• Penalties for failure to file are significant and can accrue for continued failure after notice.
• The LLC must keep records sufficient to establish the accuracy of the return.

Many foreign owners learn about Form 5472 in their second or third year. Ask your preparer about it before the first filing deadline, not after.

The Florida registrations you still need

Federal identification numbers do not replace Florida requirements. A nonresident owner faces the same state and local stack as any other owner:

Start with the DBPR license guide and the Florida tax guide. If you will manage remotely, our out-of-state owner guide covers the same operating problems from a distance — the local-contact requirement in particular applies to overseas owners with more force.

FIRPTA: what happens when you sell

The Foreign Investment in Real Property Tax Act requires the buyer to withhold on a purchase from a foreign seller. Under IRC section 1445:

• The general withholding rate is 15 percent of the amount realized — usually the gross sales price, not the gain.
• A reduced 10 percent rate can apply to certain residential transactions where the amount realized is between $300,001 and $1,000,000 and the buyer intends to use the property as a residence.
• A full exemption can apply where the amount realized is $300,000 or less and the buyer will use the property as a residence, subject to the regulatory conditions.
• Withholding is a prepayment. The seller files a U.S. return for the year of sale to compute the actual tax and claim any refund.
• A withholding certificate can be requested from the IRS to reduce withholding where the expected tax is less than the amount to be withheld. This takes time and must be started before closing.

Depreciation you claimed during the rental years affects the gain calculation at sale. That interaction is one more reason to file returns properly from year one.

SB 264 and restrictions on some foreign buyers

In 2023 Florida enacted SB 264, codified at sections 692.201 through 692.204, Florida Statutes. It restricts the purchase and ownership of certain Florida real property by "foreign principals" with defined connections to specified countries of concern, with distinct rules for agricultural land, property near military installations and critical infrastructure, and other real property.

The law was challenged in federal court. The Eleventh Circuit's decision in Shen v. Simpson did not leave the law enjoined, so it currently applies. Buyers with citizenship, domicile, or governmental ties to a listed country should obtain Florida legal advice before signing a contract, and should expect the closing to involve a required affidavit.

This article does not attempt to summarize who is or is not covered. That determination is legal advice.

Foreign owner checklist

• Confirm with a cross-border tax adviser whether individual or entity ownership fits your situation, including estate tax exposure.
• If forming an LLC, appoint a registered agent with a Florida street address and diary the May 1 annual report deadline.
• Apply for the EIN using the international route described in the SS-4 instructions; keep the confirmation letter.
• Start the ITIN application early, through a Certified Acceptance Agent if you would rather not mail your passport.
• Decide on the section 871(d) election before signing management or platform agreements, then give the right W-8 form to every withholding agent.
• Diary the Form 5472 obligation if a single foreign person owns the LLC — even for a zero-activity year.
• Register for Florida sales tax, county tourist development tax, and any local business tax receipt using the correct entity identifiers.
• Appoint a local responsible party who can meet any city or county 24-hour contact requirement.
• Keep every closing document, EIN letter, ITIN notice, and registration confirmation in one organized file — you will need them for each new registration.
• Before selling, ask your adviser about FIRPTA withholding and whether a withholding certificate application makes sense.

Frequently asked questions

Official sources

• IRS — Instructions for Form SS-4 (EIN), including international applicants
• IRS — About Form W-7 (ITIN)
• IRS — Nonresident aliens and real property located in the U.S.
• IRS — About Form W-8ECI
• IRS — About Form 5472
• IRS — FIRPTA withholding
• Florida Division of Corporations — LLC fees
• Florida Department of Revenue — business tax registration
• Chapter 692, Florida Statutes — conveyances, including ss. 692.201–692.204

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