Canadians are about a third of the foreign sellers of Florida homes. Before listing, it helps to see what each path does to your cash, your taxes and your ownership, and which questions to put to a CPA and to a lender.
Seller share: Florida Realtors, 2025 Profile of International Residential Transactions in Florida.
Side by Side
| Sell | Cash-out refinance | |
|---|---|---|
| What you get | Sale proceeds, less costs and any withholding | Loan proceeds, less closing costs |
| What you keep | Nothing; ownership ends | The property, its rent and any future change in value |
| US withholding at closing | Generally 15% of the gross price under FIRPTA, unless reduced by a withholding certificate or a narrow residence exception | None; a loan is not a sale |
| What comes after | US and Canadian tax filings for the year of the sale | A monthly payment the rent has to cover, continued US filings on rental income, and continued US estate tax exposure |
| Main costs | Agent commission, Florida documentary stamp tax on the deed, title and closing costs | Appraisal, title, lender fees, and Florida taxes on the new note and mortgage |
| When the cash arrives | At closing, less withholding; any excess withholding comes back after the IRS processes your return | At closing |
How a Sale Works for a Canadian
When a foreign person sells US real property, the buyer is generally required to withhold 15% of the amount realized (the gross price, not the profit) and send it to the IRS under FIRPTA. The withholding is a prepayment, not the final tax: you file a US return reporting the sale, and any amount withheld beyond the tax actually owed is refunded.
Withholding is reduced or eliminated only in narrow cases where the buyer will live in the home: none when the amount realized is $300,000 or less and the buyer qualifies, and a reduced rate up to $1,000,000. Sellers can also apply on IRS Form 8288-B for a withholding certificate that lowers the withholding to the expected tax.
Canada taxes residents on worldwide income, so the gain is also reported on your Canadian return, generally with a foreign tax credit for US tax paid. A cross-border CPA should run both sides before you list. The Canadian investor guide covers the treaty, rental-income filing and estate tax in more depth.
How a Cash-Out Refinance Works
A cash-out refinance places a new mortgage on the property and pays you the difference at closing. For a Canadian non-resident it usually comes from a US foreign national program, commonly capped at about 60% to 70% of the appraised value, with the rent covering the new payment on a rental. Because you still own the property, FIRPTA withholding does not apply.
If you stay in the property more than about two weeks a year, it is usually financed as a second home rather than a rental, which changes the program options. Details: how a Canadian takes cash out of a paid-off Florida property.
What Keeping the Property Means
- US filings on rent continue. Most Canadian owners of a US rental file a US non-resident return and elect to be taxed on net rental income rather than have 30% withheld from gross rent.
- US estate tax exposure continues. US property owned at death can be subject to US estate tax, and the US-Canada tax treaty provides a prorated credit. How a mortgage affects that exposure is a question for your CPA.
- The payment has to work. Rising insurance and association dues come out of the same rent that covers the loan.
- Currency. A US-dollar loan against a US-dollar property avoids a currency mismatch; converting the proceeds to Canadian dollars adds one.
Questions to Ask Your Cross-Border CPA
- After tax and costs in both countries, what would I net from a sale versus a cash-out refinance?
- Would a withholding certificate (Form 8288-B) reduce what is held back at a sale, and how long would it take?
- How would interest on a new loan be treated in each country, given how I plan to use the cash?
- How does keeping the property affect my US estate tax exposure, and does the type of mortgage matter?
- If I plan to buy another US property, does a like-kind (1031) exchange fit, and how does FIRPTA apply to it?
- When should I convert currency, and where should the proceeds land?
Questions to Ask a Lender
- How much could I take out at today’s appraised value?
- Does the rent cover the new payment, including taxes, insurance and dues?
- Is my building eligible (warrantable status, condotel rules, rental restrictions, inspections and reserves)?
- Does the program lend to me as an individual, or does it need an LLC?
- What documents will you need from me in Canada?
Talk It Through
Viador Partners is based in Tampa. Chad Evers (NMLS #2822744) can tell you what a cash-out refinance on your property would look like, so you can compare it with a sale alongside your CPA. Loans are placed through Focus Home Mortgage Inc. NMLS #2769672.
Frequently Asked Questions
No. FIRPTA withholding applies when a foreign person sells or otherwise disposes of US real property. A cash-out refinance is a loan against a property you keep, so there is no FIRPTA withholding. Changing how title is held is a separate question for a cross-border CPA.
Generally 15% of the amount realized, meaning the gross sale price, not the profit. Withholding is reduced or eliminated only in narrow cases where the buyer will live in the home and the price is $1,000,000 or less, and a withholding certificate from the IRS can lower it to the expected tax.
Any amount withheld beyond the US tax you actually owe on the sale is refunded after you file a US tax return reporting the sale. A withholding certificate requested on Form 8288-B can reduce the amount held back at closing.
A refinance is borrowing, not a sale, so it does not create a gain the way a sale does. How the interest and the use of the proceeds are treated for US and Canadian tax depends on your situation; ask a cross-border CPA.
It depends on whether you want to keep the property, whether the rent supports a new payment, and your after-tax result in both countries. A lender can show you what a refinance would look like; a cross-border CPA should compare the after-tax outcomes.
Educational information only. Not tax, legal or financial advice, and not a commitment to lend. Talk to a qualified cross-border CPA and attorney about your situation. Programs and terms are set by the lender and vary by borrower, property and state. Loans are originated through Focus Home Mortgage Inc. NMLS #2769672.