Investing in Miami real estate: what changes when the buyer is Brazilian

When a Brazilian buyer arrives in Miami, the first question is usually about the building. Brickell or Sunny Isles, pre-construction or delivered, bay view or ocean view. These are relevant questions. They are not the first ones.

The questions that matter before the building are four: how the asset will be held, how it will be financed, how it will be reported to the Brazilian tax authority, and how it will pass to heirs. Each of these decisions has concrete implications for the net return on the investment, at magnitudes that change the thesis.

This essay covers the four decisions. It does not substitute specialized legal counsel, and is not meant to. It covers the map, so the buyer arrives at the lawyer's and accountant's table with the right questions.

The ownership structure

A Brazilian buyer can acquire U.S. real estate through three main structures. As an individual directly, through a U.S. LLC held by the individual, or through a layered corporate structure (a U.S. LLC held by an offshore holding company in, for example, the Cayman Islands or Delaware).

The individual is the simplest. The asset enters Brazilian tax reporting at acquisition cost, declared annually in Assets and Rights, and rental income is taxed in the U.S. at the federal non-resident rate (typically 30% gross, or 30% on net income if the investor elects Effectively Connected Income treatment). The disadvantage emerges at succession: U.S. estate tax applies to non-resident assets above USD 60,000, with progressive rates reaching 40%.

The U.S. LLC held by the individual resolves the operational piece, but not the succession piece. A single-member LLC is treated as a disregarded entity for U.S. tax purposes, and estate tax still applies. The advantage is asset separation: the property sits in a legal entity distinct from the individual, shielding against direct litigation against the investor.

The layered corporate structure, with an offshore entity owning the U.S. LLC, is the form most often used by Brazilian high-net-worth families. The offshore owns the LLC interests. The LLC owns the property. Succession happens inside the offshore, under the chosen jurisdiction, without triggering U.S. estate tax. The costs of maintaining the offshore (between USD 3,000 and USD 10,000 per year, depending on jurisdiction) only make sense at tickets above USD 1 million, but at that level they become standard practice.

The decision between the three structures is made before the purchase contract. Reverting after closing involves transferring between entities, with meaningful tax frictions.

Financing as a foreign buyer

The Brazilian buyer can finance the acquisition. U.S. banks active in the foreign-national market require down payments between 30% and 40%, proof of foreign income, and charge rates typically 1.5 to 2.5 percentage points above resident rates. The process takes 45 to 75 days.

The practical question is whether financing makes sense. The answer depends on three variables. The first is the cost of money in Brazil versus the cost of money in the U.S. When the U.S. rate is meaningfully lower than the net Brazilian Selic, leveraging part of the acquisition preserves capital for Brazilian fixed-income investments with positive spread.

The second is the expected appreciation of the property. In markets of consistent appreciation, leverage amplifies the return on equity. In stable markets, it simply pays interest.

The third is the use of the property. When the property is income- generating (annual rental or short-term rental), the income can cover the financing fully or partially, and the interest is deductible against U.S. rental income. When it is a family residence, the deductibility does not apply and the cost of the financing is full out-of-pocket.

Roughly 60% to 70% of foreign purchases in Miami are all-cash, no financing. The percentage reflects the international buyer profile, which prioritizes speed of close and absence of banking friction. Cash also places the investor in a stronger negotiating position, particularly on contested units.

The Brazilian declaration

A property acquired abroad must be declared annually in the Brazilian tax return under Assets and Rights. The declared value is the acquisition cost in reais (converted at the PTAX rate of the purchase day), and does not track market value. Capital gains tax is triggered only at sale, calculated on the difference between sale price (in reais converted) and declared cost, at progressive rates between 15% and 22.5%.

Rental income received abroad is taxed in Brazil under the carnê-leão regime, with monthly rates between 7.5% and 27.5%. A credit applies for taxes paid in the U.S., avoiding double taxation within the terms of the Brazil-U.S. tax treaty (still in negotiation and currently operating through unilateral reciprocity).

Brazilian currency regulation requires every foreign property purchase to be registered in the Central Bank's Sistema Câmbio, through a foreign exchange contract executed by an authorized financial institution. Documentation proving the source of the funds must be retained by the investor for the life of the asset.

Succession

Succession is where poorly planned structures reveal themselves. U.S. estate tax applies to non-resident assets above USD 60,000, with progressive rates reaching 40% of market value on the date of death. Without adequate structure, a USD 5 million residence can generate an estate tax obligation up to USD 2 million, due within nine months of death, with the IRS holding title until paid.

Layered corporate structures move succession outside the U.S. The death of the Brazilian investor transfers ownership of the offshore shares to heirs, under Brazilian law or the offshore jurisdiction's law, without triggering U.S. estate tax. The property itself never changes hands from the U.S. perspective.

The complexity of the structure scales with portfolio size. For a single USD 2 million property, a U.S. LLC with a Brazilian will naming the heirs may suffice. For a portfolio of multiple properties or a ticket above USD 5 million, the offshore holding becomes the standard structure.

Where Z Group fits into the map

Z Group is not a law firm or an accounting firm. We do not structure LLCs, do not plan succession, and are not the source of the legal opinion. What we do is point the buyer to the correct team before the contract. Florida-licensed attorneys who work with Brazilian clients, binational accountants who understand the tax treatment on both sides, U.S. banks with desks specialized in foreign nationals.

The coordination among these professionals before closing is what separates an investment that returns to the family balance sheet from an investment that delivers less than it promised. In twenty-five years of Miami, we have not seen a scenario in which this coordination was done after closing and produced a result equivalent to doing it first.

The question that opens the first conversation with a new buyer is rarely about the building. It is about the structure. Welcome home.