New York City continues to attract international buyers from around the world. Whether you are purchasing a pied-à-terre, an investment property, or a primary residence, the good news is that foreign nationals can freely purchase real estate in New York. However, the process involves specific legal, tax, and financial considerations that differ from those of domestic buyers.
Can Foreigners Buy Property in New York?
Yes. There are no citizenship or residency requirements for purchasing real estate in New York State. Foreign nationals can purchase condominiums, houses, commercial buildings, and land. However, co-op apartments often have stricter requirements, and many co-op boards may be reluctant to approve non-resident foreign buyers due to concerns about subletting and long-term occupancy.
Condo vs. Co-op for Foreign Buyers
Condos Are Generally the Best Option
For most foreign buyers, condominiums are the preferred choice because condo purchases do not require board approval. Co-ops involve an extensive application and interview process, and boards have broad discretion to reject applicants without stating a reason.
Financing Options
Financing can be more challenging for foreign buyers, but it is not impossible:
- Cash purchase: The simplest option. Many international buyers purchase all-cash, which also makes their offers more competitive.
- Foreign national mortgage programs: Some U.S. banks offer mortgage programs specifically for non-resident borrowers, though these typically require larger down payments (30-50%) and may carry higher interest rates.
- Overseas bank loans: Some buyers obtain financing from banks in their home country, secured against assets held abroad.
- ITIN requirement: Foreign nationals without a Social Security Number will need to obtain an Individual Taxpayer Identification Number (ITIN) from the IRS.
Tax Obligations for Foreign Buyers
FIRPTA — Foreign Investment in Real Property Tax Act
When a foreign seller disposes of U.S. real property, the buyer is generally required to withhold 15% of the gross sales price and remit it to the IRS under FIRPTA. This is important to know even at the time of purchase, because it affects your future sale. Consult a tax professional to understand your obligations.
Additional tax considerations include:
- Property taxes: Foreign owners pay the same property taxes as U.S. owners
- Income tax on rental income: If you rent out the property, you must file a U.S. tax return and pay federal and state income taxes on rental income
- Capital gains tax: Upon sale, capital gains are taxed at applicable U.S. rates
- Estate tax: Non-resident aliens face U.S. estate tax on U.S.-situated assets with a very low exemption — far less than the exemption for U.S. citizens
LLC or Trust Structure
Many foreign buyers choose to purchase through a limited liability company (LLC) or trust to:
- Provide privacy (the LLC name appears on public records instead of the individual's name)
- Potentially mitigate estate tax exposure
- Limit personal liability
However, purchasing through an LLC may trigger additional taxes and filing requirements. Your attorney and accountant should work together to determine the best ownership structure for your situation.
The Purchase Process
- Identify the property and make an offer
- Retain a New York real estate attorney
- Obtain an ITIN (if you don't have an SSN)
- Secure financing or prepare funds for a cash purchase
- Attorney reviews and negotiates the contract
- Sign the contract and submit the deposit (typically 10%)
- Complete due diligence (title search, building review)
- Close the transaction
Conclusion
Purchasing property in New York as a foreign national is entirely feasible, but it requires careful planning around tax, legal, and financing issues. Working with an attorney who has experience representing international buyers is essential to ensuring a smooth and compliant transaction.
At Huang & Associates, P.C., we regularly assist international buyers with real estate purchases in New York City. Our multilingual team can communicate in English, Mandarin, Cantonese, and Shanghainese. Contact us to discuss your purchase.