Buying an Orlando Vacation Home From the UK or Canada: Taxes, Money and Closing From Abroad

Buying from abroad means two of everything – two tax systems, two banks, two time zones

By David Myers, Broker Associate · MyOrlandoVacationHome.com · Last updated October 2026

Buyers from the UK and Canada buy Orlando vacation homes, or holiday homes and villas as UK buyers call them, and the purchase itself works much like a US buyer's. The differences are in tax: US rent paid to a nonresident is taxed at 30% of the gross unless the owner elects to be taxed on net income and files a US return. Owners also report the rent at home, where a foreign tax credit can offset US tax, and Canadians may need to report the property on Form T1135. US estate tax can apply to a nonresident's US home, and a buyer withholds tax when a foreign owner sells. Plan financing, closing from abroad and the ownership structure with a lender and a cross-border tax adviser before you make an offer.

Buying an Orlando vacation home from Manchester or Toronto means two of everything. Two tax systems, two banks, two time zones... and two sets of forms with names like license plates.

None of it is hard once it's set up. Most of it just has to be set up before the first guest arrives, not after the first tax bill.

Can You Buy an Orlando Vacation Home From the UK or Canada?

Yes. The purchase works much like a US buyer's – the planning is what's different.

The search, the offer, the inspection and the closing follow the same steps as for any buyer – see our buyer's guide. The rental rules are the same too: the home needs a Florida vacation rental license, a state sales tax registration and a county tourist tax account, and the resort has to allow short-term rentals.

Plan your own stays around your immigration status, not the deed. Visa Waiver Program visits are limited to 90 days and can't be extended, and the program doesn't allow a change of status inside the US. Canadian citizens don't need a visa for a visit. Our guide to resorts by maximum owner usage covers the resort side of how much you can use the home.

How Do Overseas Buyers Pay for the Home?

Cash, a foreign national loan or financing from home.

Buyers without a US credit history can use foreign national loans from specialty lenders, usually with a larger down payment and more paperwork, and some international buyers pay cash or borrow at home instead. See our guide to financing an Orlando vacation home. Moving money across currencies adds exchange-rate risk between the offer and the closing, so plan the transfer early and keep a cushion.

Can You Close Without Flying to Florida?

Usually. Florida allows remote online notarization, and a power of attorney is another option.

Florida law lets an online notary public perform notarizations remotely, and it can be used for closings. A power of attorney can also let someone you trust sign for you. Ask the title company early which it will accept. Before you wire money, confirm the wiring instructions by phone with the title company, using a number you found yourself.

How Is the Rental Income Taxed in the US?

At 30% of the gross rent – unless you elect to be taxed on net income and file a return.

Federal income tax on rent for nonresident individuals under 26 USC 871. Treaties and your circumstances can change the result; ask a cross-border tax adviser.

US tax law taxes a nonresident's rent at 30% of the gross, and the US agent who handles the rent, such as your manager, generally has to withhold it. A nonresident can instead elect to treat the rent as business income, which means tax on the net after expenses such as management, cleaning, HOA dues and insurance. The election is made with a statement attached to the tax return, stays in effect for later years, and you give your manager Form W-8ECI.

The election only works if you file. A nonresident gets deductions only by filing a true and accurate return, generally within 16 months of the due date. The return is Form 1040-NR, due June 15 for owners without US wages. You'll need a US taxpayer number (an ITIN), applied for on Form W-7 with your first return. Florida's own rental taxes on each stay apply as for any owner – see our taxes guide.

Do You Pay Tax at Home Too?

You report it at home, and a foreign tax credit usually offsets some or all of the US tax.

For UK owners, HMRC says UK residents normally pay tax on foreign income, including rent from overseas property, and can usually claim Foreign Tax Credit Relief for tax paid abroad – though you may not get back the full amount.

For Canadian owners, residents of Canada can claim a federal foreign tax credit for tax paid on income from outside Canada. Form T1135 reports specified foreign property; the CRA says a property used mainly for personal use isn't included, but one that is rented out is – reportable when the total cost of all your specified foreign property passes $100,000 (Canadian) during the year.

What About US Estate Tax?

A nonresident's US home counts for US estate tax – plan for it before you buy.

The IRS lists US real estate as a US-situated asset for nonresidents, and an estate tax return (Form 706-NA) is required when those assets are worth more than $60,000 at death. Estate tax treaties can give nonresidents better treatment. How you hold the home – in your own names, jointly, through a company or in a trust – changes the estate, income tax and paperwork picture on both sides of the Atlantic, so decide with a cross-border tax adviser before you sign the contract.

What Happens When You Sell?

The buyer withholds 15% of the price for the IRS unless an exception or certificate applies.

When a foreign owner sells US property, the buyer generally must withhold 15% of the amount realized and send it to the IRS under FIRPTA. The seller can apply for a withholding certificate to reduce it to the tax actually expected, and claims any excess back on the US return. Start that application before you list. Our guide to buying from a foreign seller explains the rules from the other side of the table.

Pros, Cons and Our Take

Pros

• The purchase and rental rules are the same as for US buyers.
• The net-basis election can cut US tax on rent to tax on profit.
• Remote online notarization can let you close without a trip.

Cons

• Without the election, rent is taxed at 30% of the gross; with it, a late return can cost you your deductions.
• US estate tax can apply to a nonresident's US home.
• A buyer withholds 15% of the price when you sell, unless reduced in advance.

Our Take

Set up the tax side before the first booking: the ITIN, the W-8ECI for your manager, a cross-border adviser and a decision on how you'll hold the home. Then enjoy the part you bought it for. Two of everything is manageable – as long as one of the two is a good accountant.

What Owners Should Know

• File Form 1040-NR every year, even in a year with a loss.
• Give your manager an updated W-8ECI when it's due.
• Keep US and home-country records together, by year.
• Review your estate plan whenever you change how you hold the home.

Official Sources

• 26 USC 871: tax on nonresident alien individuals
• IRS: taxation of nonresident aliens
• IRS: instructions for Form W-8ECI
• IRS: individual taxpayer identification number (ITIN)
• IRS: nonresidents with US assets and estate tax returns
• IRS: FIRPTA withholding
• US Department of State: Visa Waiver Program
• GOV.UK: tax on foreign income
• Canada Revenue Agency: Form T1135 questions and answers
• Florida Statute 117.209: remote online notarization

David Myers is a licensed Florida real estate broker, working as a broker associate with Ziro Realty, and is not an attorney or tax professional. This article is general information, not legal or tax advice. Laws and local rules change; confirm current requirements with the county, the DBPR and a Florida attorney or tax professional.