LLC or your own name? How to hold the property

The conversation usually opens with the word taxes, and that is where something is worth clearing up early: a single-member LLC is, by default, disregarded for federal tax purposes. It is not a structure that lowers your tax bill on its own. Its value sits in three other things.

Liability

If the property is let, someone can be injured in it. With the property in your own name, a claim reaches your personal assets; inside a properly maintained LLC it stops at the company's. Properly maintained means a separate bank account, its own books, and no personal spending run through the company account. An LLC used as a personal chequing account stops protecting anything.

Privacy

In Florida the deed is public, and the owner's name is searchable by anyone in the county records, alongside the price paid. With the property in an LLC, what appears is the company's name. For many of our clients that is the deciding argument, and it is a legitimate one.

Succession

This is the point most often underestimated. U.S. real property held by a deceased foreign owner goes through probate in the county where it sits, with local counsel, in English, on a timetable measured in months. If what passes instead is membership interest in an LLC, the transfer runs on the company's operating agreement, which is drafted today and in your own language.

There is also an estate tax point worth taking to a tax adviser in your own country: the U.S. estate tax exemption threshold for non-residents is substantially lower than a citizen's. It is not a footnote, and an LLC alone does not solve it.

When it is not worth it

If you are buying one property, for your own use, never to be let, and you do not mind your name sitting in the public record, then an LLC adds an annual filing, a state renewal fee and accounting costs in exchange for very little. We say so when that is the case.