Anyone looking to buy a house in Florida understandably looks at the purchase price first. A house for, say, $500,000 seems easily calculable at first glance. However, additional costs arise during the actual purchase – one-time expenses at the time of purchase as well as recurring costs after taking possession.

This distinction is particularly important for Swiss buyers. Anyone wishing to purchase a house in Florida as a vacation property, second home, or investment should therefore not only consider the asking price but also examine the entire financial burden before signing the contract.

What additional costs are involved in the purchase?

Closing costs depend on factors such as the purchase price, the county, the financing, the type of property, and the contractual agreements between buyer and seller. Therefore, there is no single percentage that applies to every Florida home.

Key positions include:

• Documentary Stamp Tax

• Title insurance and other title costs

• Closing and settlement fees

• Inspection and, if necessary, additional expert reports

• Financing costs

• pro rata property taxes

• Building and household insurance

• Flood insurance (if applicable)

• Ongoing costs for HOA or condominium

• Administration and maintenance costs

Which of these positions will actually be taken over by the buyer should be clarified precisely before the purchase agreement is signed.

Documentary Stamp Tax on real estate purchases

When transferring real estate in Florida, a Documentary Stamp Tax is levied on the corresponding deed. According to the Florida Department of Revenue, the tax rate is generally $0.70 per $100 of the consideration. Special rules apply in Miami-Dade County; there, the state rate is $0.60 per $100, and a county surtax may also be applicable. There is a specific exemption from this surtax for the transfer of a single-family home.

It is important to note that who ultimately bears the economic burden of this tax can be determined by the purchase agreement or local transaction practice. Therefore, a Swiss buyer should not automatically assume that every tax item will be distributed according to the same scheme as in Switzerland.

Title Insurance: An important component of the transaction

When buying a house in Florida, title insurance plays an important role. It protects the owner or lender from certain problems with the title, such as certain old liens, claims, or other encumbrances on the title.

In Florida, owner's title insurance premiums are calculated according to state-regulated rates. For the first $100,000, the base rate is currently $5.75 per $1,000 of coverage; further tiered rates apply for coverage up to $1 million. Reissue rates may apply under certain circumstances.

In addition, costs may arise for title search, closing agent, documents, or other services. Therefore, the crucial question is not only whether title insurance is needed, but also which other title and closing services are included in the specific offer.

Home inspection and technical testing

Anyone looking to buy a house in Florida should have the property thoroughly inspected before finalizing the purchase. A home inspection can provide insights into the condition of the roof, air conditioning, electrical system, plumbing, windows, and other components of the house.

For properties in Florida, additional inspections may be particularly relevant depending on the location and the property itself. These could include, for example, a wind mitigation inspection, a four-point inspection, or an assessment for potential water damage.

While the costs for this are relatively small compared to the purchase price, they can help avoid larger, unexpected expenses after the purchase. Therefore, when buying an older house, one should not only consider its visual condition.

Property Tax: Not just adopting the current tax amount

The annual property tax is one of the most significant ongoing costs of owning a property in Florida. It is calculated based on the property's valuation and local tax rates.

An important point for buyers: A change of ownership can alter the tax assessment. The Florida Department of Revenue points out that when acquiring a new property, the assessed value generally corresponds to the just or market value. Furthermore, different limitations apply to future value increases for properties that are not homestead properties compared to homestead properties.

This is particularly relevant for Swiss buyers if the house is not used as their permanent primary residence. Therefore, an existing tax bill from the seller should not simply be considered a reliable forecast of future property tax.

Homestead Exemption is not automatically relevant for every buyer.

Florida offers a Homestead Exemption under certain conditions. The Florida Department of Revenue specifies a possible reduction in the taxable value of up to $50,000 for eligible owners who use the property as their permanent residence.

Swiss buyers purchasing a holiday home or a purely investment property should therefore carefully examine whether the requirements are met. They should not simply apply the tax burden of a property with the Homestead benefit to their own situation.

Insurance: A cost factor that should be checked early on.

Insurance can have a significant impact on the ongoing costs of owning a house in Florida. This includes more than just standard homeowner's insurance.

Depending on the location and property, wind and hurricane risks can be particularly significant. It's also important to know that flood damage is generally not covered by standard homeowners insurance. Separate flood insurance may be necessary.

Florida has a significant flood risk due to its coastal location, heavy rainfall, and other geographical factors. Properties outside of obvious coastal areas can also be affected.

Since October 2024, sellers of certain residential properties have also been required to provide a flood disclosure before or at the latest upon conclusion of the purchase agreement.

Therefore, before purchasing insurance, one should not only ask: "How much does the insurance cost?", but also: What coverage is included, what deductibles apply, and is additional flood insurance advisable or necessary due to the financing?

HOA and condo fees

Additional HOA or condominium fees may apply to a condominium or house in a planned residential complex.

These fees can finance things like communal facilities, landscaping, security, pools, clubhouses, or certain maintenance services. However, the specific facility is the deciding factor.

Before purchasing, Swiss prospective buyers should therefore check the current HOA fees, possible special levies, reserves, community rules and the financial situation of the Association.

Buying a seemingly cheap house in Florida can therefore have a significantly higher monthly cost than a comparable property without HOA.

Financing incurs additional costs.

Anyone who doesn't pay for the purchase entirely with their own funds must also consider financing costs. These can include, among other things, lender fees, valuation costs, credit checks, mortgage-related costs, and other closing charges.

Financing requirements for an international buyer may differ from those for a US buyer. Therefore, financing should be reviewed as early as possible, and not just shortly before closing.

The exchange rate must also be factored into the calculation. A Swiss buyer pays in US dollars but may have income or assets in Swiss francs. A change in the exchange rate can therefore affect the actual purchase price in CHF and also the ongoing costs.

Ongoing costs after purchase

In addition to the direct purchase costs, a realistic annual budget should be drawn up when buying a house in Florida.

This includes in particular:

Property Tax: annual tax on real estate.

Insurance: Homeowners Insurance and, if applicable, additional flood or wind cover.

HOA or Condo Fees: if the property is part of a corresponding community.

Maintenance: Air conditioning, pool, garden, roof, sanitary facilities and other maintenance work.

Property Management: particularly relevant if the owner lives predominantly in Switzerland and cannot manage the property himself.

Utilities: Electricity, water, internet and other ongoing services.

When considering a holiday property, it's important to factor in potential costs that may arise during extended absences. Regular inspections of the property, for example, can be beneficial in identifying technical problems early on.

What Swiss buyers should check before signing a contract

Anyone seriously planning to buy a house in Florida should obtain a complete cost breakdown before signing the contract. This includes not only the purchase price and the anticipated closing costs, but also property tax, insurance, HOA (House Ownership Assessment), maintenance, and, if applicable, financing costs.

It is particularly important to examine the specific property and its location. A house in Miami-Dade may be assessed differently in terms of taxes, insurance, and running costs than a property in Fort Lauderdale, Naples, Cape Coral, or Punta Gorda.

Personal use also plays a role: A holiday home is viewed differently for tax and organizational purposes than a property that is permanently used as a main residence.

Anyone from Switzerland who wants to buy a property in Florida should therefore not only ask how much the house costs , but what the total costs of ownership will actually be .

For personalized advice on buying real estate in Florida, visit https://florida-immobilien.ch/ . You can reach the experts at +41 79 950 19 57 or +1 954 224 6469 or contact them by email at info@florida-immobilien.ch .