Should You Buy a Second Home Under an LLC in Florida? A Miami-Area Guide

Buying a second home in Miami, Coral Gables, Coconut Grove, South Miami or nearby South Florida can be a great investment or retreat — but one of the biggest decisions isn’t where to buy, it’s how to own it. For many buyers, especially those planning to rent the property or protect assets, forming a Limited Liability Company (LLC) before purchasing is a popular strategy — but it isn’t right for everyone.

Below is a practical, Florida-specific breakdown to help you decide whether buying your second home under an LLC makes sense for your goals.

What Does It Mean to Buy Real Estate Under an LLC?

An LLC is a legal business entity separate from your personal finances. When you hold property in the name of an LLC:

• the LLC owns the home, not you personally

• your personal assets can be shielded from legal issues tied to the property

• the LLC becomes the title holder on public records and insurance policies

This structure is commonly used by investors and buyers who want to separate liability and financial risks from their personal wealth. 

Key Advantages of Buying Through an LLC in Florida

1. Limited Personal Liability

One of the biggest benefits of an LLC is legal protection: if someone is injured on the property, or a tenant files a lawsuit related to the home, your personal assets — like your primary residence, bank accounts, or investments — may be shielded from claims. 

This protection can be especially valuable in South Florida, where short-term rentals and investment property risks are common.

2. Pass-Through Tax Treatment

LLCs generally use pass-through taxation, meaning the income or losses from the property flow through the LLC to your personal tax return without being subject to corporate income tax. Florida also does not impose personal income tax, which can make an LLC especially attractive for property owners. A

However, this does not eliminate federal taxes, and working with a tax professional is critical to optimize your tax strategy.

3. Flexible Ownership Structure

LLCs allow multiple members (owners), which can be useful if you’re buying the property with partners, family members, or investors. You can define how profits, responsibilities, and decisions are shared in your operating agreement. 

Potential Drawbacks to Consider

1. Mortgage & Financing Challenges

Many lenders are hesitant to issue traditional mortgages directly to LLCs. If you can get financing, lenders often require:

• higher interest rates

• larger down payments

• personal guarantees from LLC members

Buying as an LLC often means self-funding the purchase or refinancing the property after closing. 

2. Loss of Personal Tax Benefits

If the property is intended as a second personal residence, buying it through an LLC means you generally cannot take advantage of personal benefits like the Florida Homestead Exemption or the primary residence capital gains exclusion when you sell. 

Even if the home is used personally, Florida law does not allow homestead tax breaks on property held by an LLC.

3. Annual Costs & Compliance

An LLC must be properly maintained. In Florida this includes:

• filing an annual report

• paying associated fees

• fulfilling corporate formalities

Failing to maintain the LLC correctly can weaken liability protections. 

4. Property Tax and Reassessment Risks

Transferring an existing property into an LLC can sometimes trigger a reassessment for property taxes or the loss of favorable assessment caps on non-homestead properties, potentially increasing your tax bill. 

When an LLC Makes Sense (and When It Doesn’t)

LLC Ownership May Be Smart If:

✔ The home will be used as a rental or investment property
✔ You want to limit personal liability from tenants, guests, or contractors
✔ You’re co-owning the property with partners

LLC Ownership May Not Be Ideal If:

❌ You plan to use the home primarily as a second personal residence
❌ You want to take advantage of tax breaks like the homestead exemption
❌ You prefer traditional financing with lower rates

Frequently Asked Questions

Can an LLC buy or sell a residential home in Florida?

Yes — an LLC can legally buy and sell residential real estate in Florida. However, financing the purchase through an LLC can be more complex than buying in your individual name. 

Will I lose my homestead benefits if I use an LLC?

Yes — Florida homestead tax protections apply only to individually owned primary residences, not properties owned by an LLC. 

Do I still need insurance if I use an LLC?

Absolutely. An LLC does not replace property insurance — it works with insurance to help protect your financial exposure. 

Final Thoughts: Miami Area Ownership Strategy

For many buyers in South Florida, an LLC can be a powerful tool — especially for investment properties or rental homes around Miami, Coconut Grove, Coral Gables, and South Miami. The liability protection and ownership flexibility are real advantages.

But for a pure second personal residence where you plan to maximize tax benefits and traditional financing, owning the home in your personal name may be simpler and financially smarter.

Before making this decision:
✔ Talk with a Florida real estate attorney
✔ Consult with a CPA or tax professional
✔ Review financing options early

I’m also here to help you understand how this choice affects your home search, financing, and long-term strategy in the Miami market — just reach out anytime.

👉 Contact me to explore your second-home options and get tailored guidance for your situation.