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Foreign National Buyers
Foreign nationals can purchase real estate in the United States, including in New York, without restriction on ownership. However, purchasing U.S. real estate as a foreign national involves tax obligations, reporting requirements, and transaction considerations that do not apply to domestic buyers. FIRPTA withholding, state and federal tax filing requirements, entity structuring considerations, and additional lender due diligence requirements all need to be addressed before and at closing.
Parandian Law guides international buyers through the New York real estate transaction process, from contract through closing. We advise on FIRPTA withholding obligations, entity structuring for foreign ownership, title and closing requirements, and coordination with tax advisors on the U.S. and home country tax implications of the purchase. We make the transaction process clear and manageable for buyers who are not familiar with how U.S. real estate closings work.
New York is one of the most active markets for international real estate investment in the United States. Westchester County attracts buyers from Canada, Europe, Latin America, and Asia who are purchasing primary residences, second homes, and investment properties. We bring practical experience with the specific issues that arise in cross-border transactions to every foreign national buyer engagement.
Foreign National Buyer Attorney New York · International Real Estate Attorney · FIRPTA Attorney New York · Foreign Buyer Real Estate Westchester · Cross-Border Real Estate Attorney · International Property Purchase New York · Foreign Investment Real Estate · Non-Resident Buyer Attorney
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New York foreign national buyer framework
Foreign national buyers — the essentials
FIRPTA, the Foreign Investment in Real Property Tax Act, requires that when a foreign person sells U.S. real property, the buyer must withhold a percentage of the purchase price and remit it to the IRS as a prepayment of the seller’s U.S. tax obligation. While FIRPTA withholding is primarily a concern for foreign sellers rather than foreign buyers, a foreign national purchasing property in the U.S. should understand how FIRPTA will apply when they eventually sell. The withholding rate is generally 15 percent of the gross sales price, though reduced rates and exemptions apply in certain circumstances. Proper planning at the time of purchase, including entity structure selection, can affect the FIRPTA exposure at the time of a future sale.
Foreign nationals purchasing U.S. real estate must also consider the ongoing U.S. tax obligations associated with ownership. Rental income from U.S. property is subject to U.S. federal and New York State income tax regardless of where the owner lives. Foreign owners of U.S. real property are also subject to U.S. estate tax on the value of the U.S. property at death, which can apply at rates up to 40 percent with a significantly lower exemption than applies to U.S. citizens and residents. Entity structuring, such as holding the property through a U.S. LLC or a foreign corporation, can affect both the income tax and estate tax treatment of the investment. We coordinate with the buyer’s U.S. and home country tax advisors on these issues before and during the transaction.
Key FACTS
Foreign ownership restriction:
None, foreign nationals may purchase freely
FIRPTA withholding on sale:
Generally 15 percent of gross sales price
Applies to U.S. real property owned by non-residents
Significantly lower for non-residents than U.S. citizens
Rental income:
Subject to U.S. federal and NY State income tax
Entity structuring:
LLC or corporate ownership may reduce exposure
Additional lender requirements:
Foreign nationals face more extensive underwriting
ITIN requirement:
Required for tax filing if no Social Security number
What we handle
Foreign national buyer services
Transaction representation and advisory services for international buyers of New York real estate.
Contract review and closing representation
Review and negotiation of purchase contracts and full closing representation for foreign national buyers of residential and commercial real estate in New York. We manage the transaction process from contract through closing, explain each step in plain language, and coordinate with all parties including lenders, title companies, and opposing counsel on behalf of our international clients.
FIRPTA guidance and withholding
Advising foreign national buyers on FIRPTA withholding obligations and planning considerations at the time of purchase. We explain how FIRPTA will apply when the property is eventually sold, identify available exemptions and reduced withholding rate applications, and coordinate with the buyer’s tax advisors on FIRPTA compliance and planning for the future sale.
Entity structuring for foreign ownership
Advising foreign nationals on the use of U.S. LLCs, corporations, or other entities to hold New York real property, including the tax, liability, and estate planning implications of different ownership structures. We coordinate with the buyer’s U.S. and home country tax advisors to ensure the chosen structure is appropriate for the buyer’s specific situation and goals.
Tax advisor coordination
Coordination with the buyer’s U.S. tax advisor and home country advisors on the income tax, estate tax, and treaty considerations relevant to the purchase. We manage the legal side of the transaction while ensuring that the tax dimensions are addressed by qualified advisors before closing. For buyers who do not yet have a U.S. tax advisor, we can provide referrals to advisors experienced in cross-border real estate transactions.
How it works
Our foreign national buyer process
01
Initial consultation and structure review
We begin by understanding the buyer’s citizenship, residency status, financing plans, and goals for the property, including whether it will be a primary residence, second home, or investment property. We advise on entity structuring considerations and coordinate with the buyer’s tax advisors before the transaction begins so the ownership structure is in place before closing.
02
Defect identification and clearance
We review the purchase contract before our client signs and negotiate any modifications needed to protect their interests. For foreign national buyers, we pay particular attention to financing contingency terms, closing timeline, and any provisions that could create complications given the buyer’s non-resident status or financing structure.
03
Due diligence and closing preparation
We manage the title review, coordinate with the lender on any additional requirements applicable to foreign national borrowers, and prepare all closing documents. We advise the buyer on U.S. tax identification number requirements, wire transfer procedures for international funds, and any other closing logistics that differ for international buyers.
04
Closing and post-closing
We attend the closing, review all documents with our client, and manage the execution and delivery of all transfer documents. After closing, we confirm deed recording and title policy issuance and advise on post-closing obligations including any required tax filings, entity compliance requirements, and rental income reporting obligations if the property will be leased.
Common questions
Foreign national buyers FAQ
Can a foreign national buy real estate in New York?
Yes. There is no restriction on foreign nationals owning real estate in the United States, including in New York. Foreign nationals may purchase residential and commercial property, hold it individually or through an entity, and sell it at any time. The primary considerations for foreign buyers are not restrictions on ownership but rather the U.S. tax obligations that attach to ownership and the transaction requirements that differ from domestic purchases, including FIRPTA withholding on eventual sale, U.S. estate tax exposure on U.S. real property held at death, and additional lender underwriting requirements for non-resident borrowers.
What is FIRPTA and how does it affect me as a buyer?
FIRPTA, the Foreign Investment in Real Property Tax Act, requires the buyer of U.S. real property from a foreign seller to withhold a percentage of the purchase price and remit it to the IRS as a prepayment of the seller’s potential U.S. tax liability. As a foreign national buyer, FIRPTA affects you primarily when you eventually sell the property. At that point, the buyer of your property will be required to withhold generally 15 percent of the gross sales price unless an exemption or reduced withholding certificate applies. Planning the ownership structure of your purchase with FIRPTA in mind can reduce your withholding exposure at the time of a future sale. We advise on FIRPTA planning as part of every foreign national buyer engagement.
Should I purchase New York real estate through an LLC or in my own name?
The answer depends on your tax situation, residency status, and goals for the property. Purchasing through a U.S. LLC provides liability protection and can simplify the transfer of the property in the future. However, the tax treatment of LLC ownership for foreign nationals depends on whether the LLC is treated as a disregarded entity or a corporation for U.S. tax purposes, which affects income tax filing obligations and FIRPTA withholding on eventual sale. Holding property through a foreign corporation can eliminate U.S. estate tax exposure on the property but creates other tax complications. There is no universally correct answer. We advise on the legal dimensions of the ownership structure decision and coordinate with your U.S. tax advisor on the tax implications before the structure is finalized.
What additional requirements do foreign national buyers face at closing?
Foreign national buyers typically face more extensive underwriting requirements from U.S. lenders, including additional documentation of income, assets, and creditworthiness. Some lenders require a larger down payment from non-resident borrowers or limit the loan-to-value ratio available to foreign nationals. Buyers who do not have a U.S. Social Security number will need an Individual Taxpayer Identification Number for tax filing purposes. International wire transfers require advance planning to ensure funds arrive in the correct account in time for closing. We advise foreign national buyers on all of these logistics and coordinate with lenders and the title company to ensure the closing proceeds smoothly.
Related services
Often considered alongside foreign national buyers
Purchasing real estate in New York as a foreign national?
Cross-border real estate transactions involve tax and legal considerations that require coordination before you sign a contract. Speak with an attorney who understands the specific issues that arise for international buyers in the New York market.
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