New York City has long been one of the most active real estate markets in the world for international buyers. Foreign nationals purchase condominiums in Manhattan, multi-family buildings in Brooklyn and Queens, and commercial properties across all five boroughs. There is no citizenship or residency requirement to own real property in New York. A foreign national who has never set foot in the United States may legally purchase, own, rent out, and sell real estate in New York City.
But the legal right to buy is only the beginning. A foreign buyer in New York faces a distinct set of tax obligations, financing constraints, structural decisions, and compliance requirements that do not apply — or apply differently — to U.S. citizens and permanent residents. FIRPTA withholding, U.S. estate tax exposure, FinCEN beneficial ownership reporting, the co-op vs. condo distinction, LLC structuring, and the mechanics of obtaining a mortgage without a U.S. credit history are all issues that international buyers must navigate — and that many first-time foreign buyers are not aware of until well into the transaction.
This guide covers the legal, tax, and practical considerations for non-U.S. citizens buying real estate in New York City. It is written by a New York real estate attorney who represents international buyers in residential and commercial transactions. The firm provides bilingual English and Farsi representation, which is particularly relevant for buyers from Iran and other Farsi-speaking countries. Tax rates, thresholds, and filing requirements cited in this guide were current as of the publication date. Tax law changes frequently — verify all figures with the IRS, the NY State Department of Taxation and Finance, and the NYC Department of Finance before relying on any specific number.
There Is No Citizenship Requirement to Buy Property in New York
New York law imposes no nationality, visa, or immigration-status restriction on real property ownership. A foreign national may own real estate in New York regardless of whether they hold a U.S. visa, are a lawful permanent resident, or have no U.S. immigration status at all. The right applies to all property types: condominiums, single-family homes, multi-family buildings, vacant land, and commercial properties.
This is a common point of confusion for international buyers, particularly those from countries where foreign ownership of real property is restricted or prohibited. In New York, the restrictions on foreign buyers are not about the right to own property — they are about the tax, financing, and regulatory framework that applies to the ownership.
The one practical exception is the cooperative apartment. While there is no legal prohibition on foreign nationals owning co-op shares, co-op boards have broad discretion to reject applicants, and many boards are reluctant to approve non-resident foreign buyers. This is discussed in detail below.
Condominiums vs. Co-ops: Why This Distinction Matters for Foreign Buyers
The single most important structural decision for a foreign buyer in New York City is whether to purchase a condominium or a cooperative apartment. For most international buyers, the answer is a condominium — and understanding why requires understanding how these two ownership structures differ.
Condominiums
A condominium purchase is a conventional real property transaction. The buyer receives a deed to the unit itself (plus an undivided interest in the building’s common elements). There is no board approval — the condo board has only a right of first refusal, which is rarely exercised. The owner may freely rent the unit, use it as a pied-à-terre, hold it through an LLC, or leave it vacant. Condominiums are more common in newer buildings (post-1980 construction) and dominate the new-development market.
For foreign buyers, condos offer several advantages: no board approval risk, no subletting restrictions that would limit rental income, the ability to hold the unit through an LLC for estate tax planning, and the ability to purchase with financing from an international bank or with cash without board scrutiny of the buyer’s financial details.
Cooperative Apartments
A co-op purchase is a purchase of shares in the corporation that owns the building, plus a proprietary lease for a specific unit. The buyer does not receive a deed to real property. Co-op boards have broad discretion to accept or reject applicants — they may reject any applicant without stating a reason, provided the rejection is not based on a protected class under federal, state, or city human rights laws. The board application typically requires extensive financial disclosure, personal and professional references, and an in-person interview.
Foreign buyers face particular challenges with co-ops. Many boards require or strongly prefer that the buyer use the unit as a primary residence. Non-resident foreign buyers — those who intend to use the unit seasonally, as an investment, or as a pied-à-terre — are frequently rejected. Most co-ops do not permit LLC ownership. Some co-ops require the buyer to maintain a certain level of assets in U.S. financial institutions. The board application process itself adds 4 to 8 weeks to the transaction timeline and creates uncertainty that many foreign buyers prefer to avoid.
The majority of pre-1980 residential buildings in Manhattan are co-ops. This means that a significant portion of the city’s housing inventory is effectively unavailable — or at minimum, significantly more difficult to access — for foreign buyers. For a more detailed comparison of co-ops and condos, see our 2026 residential real estate resource guide.
Financing: Mortgage Options for Non-U.S. Citizens
Foreign nationals can obtain mortgage financing in New York, but the landscape is substantially different from what U.S. buyers experience. The conventional mortgage market — Fannie Mae and Freddie Mac conforming loans — is generally not available to borrowers without U.S. citizenship or permanent residency. Foreign buyers typically finance through one of the following channels:
- International banks with U.S. operations: Banks such as HSBC, Santander, and certain Middle Eastern and Asian banks maintain U.S. mortgage operations that serve international clients. These programs typically require 30–50% down payment, proof of income and assets in the borrower’s home country, and a relationship with the bank.
- U.S. private banks and portfolio lenders: Some U.S. banks offer portfolio mortgage products to high-net-worth foreign nationals, particularly for luxury purchases. These are relationship-based products with higher minimums and bespoke terms.
- Home-country financing: Some buyers obtain financing from their home-country bank, secured by assets in their home country rather than by the U.S. property. This avoids the U.S. lending process entirely but requires a bank that offers cross-border lending.
- All-cash purchases: A substantial percentage of foreign purchases in NYC are all-cash transactions. Cash eliminates the mortgage contingency, simplifies the closing, and avoids the challenges of qualifying for a U.S. mortgage. However, all-cash purchases above the FinCEN Geographic Targeting Order threshold ($300,000 in NYC) trigger beneficial ownership reporting requirements.
Foreign buyers should expect higher down payment requirements (30–50% vs. the 20% standard for U.S. buyers), higher interest rates, and more extensive documentation requirements including bank reference letters from home-country institutions, translated and sometimes apostilled financial statements, and proof of the source of funds. Establishing a U.S. bank account before beginning the property search is strongly recommended — some lenders require it, and the wire transfer process for the closing proceeds requires a U.S. receiving account.
FIRPTA: The Tax That Matters When You Sell
The Foreign Investment in Real Property Tax Act (FIRPTA) is a federal law that imposes withholding requirements when a foreign person sells U.S. real property. FIRPTA does not impose a tax at the time of purchase. It becomes relevant when the foreign owner sells.
How FIRPTA Works
When a foreign person sells U.S. real property, the buyer is required to withhold 15% of the gross sale price and remit it to the IRS. This withholding is not a tax — it is a prepayment against the seller’s eventual capital gains tax liability. The foreign seller files a U.S. tax return (Form 1040-NR) for the year of sale, reports the gain, calculates the actual tax owed, and receives a refund of any excess withholding. If the actual tax exceeds the withholding, the seller owes the difference.
Reduced Withholding
The 15% withholding rate applies to the gross sale price, not the gain. On a $2 million sale, the withholding is $300,000 — regardless of whether the seller’s actual gain is $50,000 or $500,000. This can result in substantial over-withholding. To reduce the withholding, the foreign seller may apply for a withholding certificate from the IRS (Form 8288-B) before closing. The application demonstrates the expected gain and tax liability, and the IRS may authorize withholding at the actual tax rate rather than 15%. However, the application process takes approximately 90 days, and the closing cannot be delayed indefinitely to wait for IRS approval. Planning for FIRPTA well before listing the property is critical.
Exceptions
FIRPTA withholding is reduced to 10% if the sale price is between $300,001 and $1 million and the buyer intends to use the property as a residence. No withholding is required if the sale price is $300,000 or less and the buyer will use it as a residence. These exceptions have limited application in the NYC market, where most residential prices exceed $1 million.
Foreign buyers should understand FIRPTA at the time of purchase — not because it triggers an obligation at purchase, but because it shapes the exit strategy and affects the after-tax return on the investment. Every foreign buyer should discuss FIRPTA planning with a tax professional before closing on the acquisition.
LLC Structuring for Foreign Buyers
Many foreign buyers purchase NYC real estate through a limited liability company rather than in their individual name. The LLC structure serves several purposes, but the most important for foreign buyers is estate tax protection.
The Estate Tax Problem
A non-resident alien (a foreign national who is not a U.S. domiciliary for estate tax purposes) who dies while owning U.S. real property is subject to federal estate tax on the value of that property. The estate tax rate reaches 40%, and the exemption for non-resident aliens is only $60,000 — compared to $13.61 million for U.S. citizens and residents. On a $3 million condominium owned directly by a foreign national, the estate tax exposure can exceed $1 million.
The LLC structure may mitigate this exposure. When a foreign national owns the property through an LLC — particularly one structured through a holding chain that includes a foreign corporation — the argument is that the decedent owned an interest in a non-U.S. entity, not U.S. real property directly. This planning must be implemented carefully, with guidance from a tax attorney experienced in international tax and estate planning. The IRS has challenged certain structures, and the specific facts — where the LLC is formed, who manages it, how it is capitalized, and whether it is treated as a disregarded entity for tax purposes — all matter.
Liability Protection
An LLC also provides asset protection. If a tenant or visitor is injured on the property and sues the owner, the LLC limits the claimant’s recovery to the LLC’s assets (primarily the property itself) rather than the individual owner’s worldwide assets. This protection is especially relevant for foreign buyers who own rental properties in NYC.
Practical Considerations
LLC ownership adds cost and complexity. The LLC must obtain an Employer Identification Number (EIN) from the IRS. If the LLC is a domestic entity, it must file a Beneficial Ownership Information (BOI) report with FinCEN under the Corporate Transparency Act. The LLC may need to file a separate tax return (partnership or corporate, depending on the structure). Some mortgage lenders will not lend to an LLC, or will require a personal guaranty that partially defeats the liability protection purpose. And co-op boards almost universally prohibit LLC ownership. For condo purchases, LLC ownership is straightforward. For co-ops, it is generally not available.
Tax Obligations for Foreign Owners of NYC Real Estate
Foreign ownership of NYC real estate creates U.S. tax obligations at the federal, state, and city level. These obligations exist regardless of whether the owner ever resides in the United States.
Property Tax
NYC property taxes are assessed and collected by the NYC Department of Finance. The tax applies to all property owners equally — citizenship and residency are irrelevant. Property tax rates, assessment ratios, and available exemptions vary by property class. The tax is an ongoing carrying cost that foreign owners must account for regardless of whether the property generates income.
Income Tax on Rental Income
A foreign owner who rents out the property must file a U.S. federal tax return (Form 1040-NR) and a New York State income tax return reporting the net rental income. The owner may deduct ordinary expenses — mortgage interest, property taxes, insurance, management fees, repairs, and depreciation — against the rental income. To claim these deductions, the foreign owner must make a timely election to treat the rental income as “effectively connected income” under IRC § 871(d). Without this election, the gross rental income is taxed at a flat 30% rate with no deductions. The election must be made on a timely filed return. An Individual Taxpayer Identification Number (ITIN) is required if the owner does not have a Social Security Number — the ITIN application process should be initiated as early in the process as possible.
Capital Gains Tax on Sale
When the foreign owner sells the property, the gain is subject to federal capital gains tax (the rate depends on the holding period and the owner’s tax bracket for U.S.-source income), New York State income tax, and NYC income tax. FIRPTA withholding applies at closing as discussed above. The foreign seller must file a U.S. tax return for the year of sale to reconcile the withholding against the actual tax liability.
Estate Tax
As discussed in the LLC section above, U.S. real property owned directly by a non-resident alien at death is subject to federal estate tax with only a $60,000 exemption. Some countries have estate tax treaties with the United States that may provide additional credits or exemptions — an international tax attorney should review whether a treaty applies to the buyer’s specific situation. New York also imposes a state-level estate tax on real property situated in New York, with its own rates and thresholds.
FinCEN Reporting and Anti-Money Laundering Requirements
The U.S. government has implemented increasingly rigorous reporting requirements for real estate transactions, particularly those involving legal entities and foreign buyers. Two frameworks are especially relevant.
Geographic Targeting Orders (GTOs)
FinCEN’s Geographic Targeting Orders require title insurance companies to identify the beneficial owners of legal entities (LLCs, corporations, trusts) that purchase residential real estate in designated metropolitan areas. All five NYC boroughs are covered. The current reporting threshold for NYC is $300,000. When a legal entity purchases residential real property above this threshold without financing from a U.S. lender (which would trigger its own anti-money-laundering review), the title company must collect and report the identity of every individual who owns 25% or more of the purchasing entity. The GTO does not prohibit the transaction — it imposes transparency requirements.
Corporate Transparency Act (CTA)
The Corporate Transparency Act requires most domestic LLCs and corporations, and foreign entities registered to do business in the United States, to file Beneficial Ownership Information (BOI) reports with FinCEN. The report identifies every individual who owns or controls 25% or more of the entity, or who exercises substantial control over it. If a foreign buyer forms a U.S. LLC to purchase property, the LLC must file a BOI report. The reporting requirements are independent of the real estate transaction and apply to the entity as long as it exists.
Source of Funds
Foreign buyers should expect scrutiny of the source of funds used for the purchase. Banks, title companies, and attorneys are all subject to anti-money-laundering obligations under the Bank Secrecy Act. A foreign buyer will need to document the source of the purchase funds — bank statements, tax returns, business records, or gift documentation — to the satisfaction of the lender (if financed) and potentially the title company and closing attorney. Wire transfers from foreign banks should be initiated from accounts in the buyer’s own name. Large transfers from third parties raise red flags and require explanation.
The Closing Process for Foreign Buyers
The mechanics of a New York real estate closing are the same for foreign and domestic buyers. New York is an attorney-state: the buyer’s attorney reviews and negotiates the contract of sale, conducts title and due diligence, and represents the buyer at closing. The seller’s attorney drafts the contract and prepares the transfer documents. Title insurance is issued by a separate title company. For a detailed overview of the closing process, see our residential closings practice page.
Several aspects of the closing process differ for foreign buyers:
- ITIN: If the buyer does not have a Social Security Number, an ITIN must be obtained before closing. The ITIN is needed for the deed transfer, for property tax purposes, and for any future tax filings. The application process (IRS Form W-7) can take several weeks.
- Foreign language documents: All closing documents are in English. If the buyer does not read English fluently, working with a bilingual attorney who can explain the documents in the buyer’s language is essential. Yazdi Law provides this service in Farsi.
- Power of attorney: If the buyer cannot be physically present at closing, a power of attorney may be used. The power of attorney must be drafted in compliance with New York General Obligations Law and executed with the formalities required by New York law. If executed abroad, the document may need to be notarized at a U.S. consulate or apostilled under the Hague Convention. The title company must approve the power of attorney before closing.
- Wire transfers: The purchase proceeds (down payment at contract signing, balance at closing) are typically wired from the buyer’s bank account. International wires from foreign banks require additional lead time (3–5 business days), and the buyer should confirm that the sending and receiving banks can process the transfer without delays. Anti-money-laundering screening of international wires can cause holds. Plan accordingly.
- Entity documentation: If purchasing through an LLC, the closing requires the LLC’s certificate of formation, operating agreement, EIN confirmation letter, and a resolution authorizing the purchase. If the LLC is managed by a foreign entity, additional documentation of the foreign entity’s authority may be required.
Currency Exchange and Wire Transfer Considerations
NYC real estate transactions are denominated in U.S. dollars. Foreign buyers paying from accounts denominated in other currencies must convert funds, which introduces exchange rate risk and transfer costs.
For large transactions, the exchange rate difference between the rate offered by the buyer’s retail bank and the interbank rate can represent tens of thousands of dollars. Foreign exchange brokers and specialized services often offer more competitive rates than retail banks. The buyer’s attorney or financial advisor can recommend providers.
Some countries impose capital controls that restrict the amount of money that can be transferred abroad. Buyers from countries with capital controls should plan well in advance and may need to use lawful structuring techniques — such as phased transfers over time — to move the purchase funds to the United States. The buyer’s attorney and the bank should be informed of any capital control issues before contract signing to avoid delays at closing.
All wire transfers for real estate closings should be sent to a verified account using instructions confirmed by the buyer’s attorney. Wire fraud — in which a fraudster impersonates the attorney or title company and provides fake wire instructions — is a serious and increasing risk in real estate transactions. Never send funds based on wire instructions received by email without verbal confirmation with a known contact.
Sanctions and Restricted Countries
The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) administers sanctions programs that restrict transactions with certain countries, entities, and individuals. While there is no general prohibition on citizens of any country owning U.S. property, buyers who are nationals of sanctioned countries — or who need to transfer funds from banks in sanctioned jurisdictions — face additional compliance challenges. U.S. banks, title companies, and attorneys are prohibited from facilitating transactions that violate OFAC sanctions, and all parties to a real estate closing screen for sanctions compliance.
Iranian nationals, in particular, face unique challenges because of the comprehensive U.S. sanctions on Iran. An Iranian national who is a U.S. person (green card holder, permanent resident, or person present in the United States) may generally purchase property, but the transaction must not involve the transfer of funds from Iran or from Iranian banks. The sanctions framework is complex and heavily fact-dependent. Iranian buyers should engage an attorney who understands both the real estate transaction and the sanctions compliance requirements. Yazdi Law has experience representing Iranian and other Farsi-speaking buyers in NYC real estate transactions and can coordinate with sanctions counsel where necessary. See our Iranian attorney services page for more information.
Visa and Immigration Considerations
Buying property in the United States does not confer any immigration benefit. Property ownership does not entitle the buyer to a visa, work authorization, or permanent residency. A foreign buyer who purchases a $10 million apartment in Manhattan has no greater right to reside in the United States than before the purchase. The buyer may visit the property on a B-1/B-2 visitor visa (subject to the usual duration-of-stay limitations), but may not reside permanently or work in the United States based on property ownership alone.
The EB-5 immigrant investor visa program is a separate path that requires a qualifying investment in a new commercial enterprise that creates at least 10 full-time jobs — purchasing a residential property for personal use does not qualify. Buyers interested in immigration options through investment should consult an immigration attorney for current EB-5 requirements and alternatives.
Conversely, a foreign buyer’s current immigration status does not affect their right to purchase property. A person on a student visa, a work visa, a tourist visa, or with no U.S. visa at all may legally buy and own real property in New York.
Title Insurance and Property Insurance for Foreign Buyers
Title insurance is standard in New York real estate transactions and is equally available to foreign buyers. The title company searches the property’s chain of title, identifies any liens, encumbrances, or defects, and issues a policy that insures the buyer against covered title defects. If the buyer is financing the purchase, the lender will require a lender’s title policy. The buyer should also obtain an owner’s policy for their own protection.
Property insurance (homeowner’s or landlord insurance) is available to foreign owners, though some insurers may charge higher premiums for non-resident owners or properties that will be vacant for extended periods. If the property will be managed by a property management company, the insurer should be informed. The mortgage lender (if any) will require proof of adequate property insurance before closing.
Property Management for Non-Resident Foreign Owners
Foreign buyers who will not reside in the property full-time need a plan for property management. This is especially true for rental properties, where the owner has ongoing obligations: tenant communications, maintenance and repairs, rent collection, lease enforcement, and compliance with NYC housing code requirements.
A property management company can handle these responsibilities, typically for a fee of 8–12% of gross rental income. The management company should be named as the owner’s agent for service of process and building communications. For condo owners, the management company coordinates with the condo board regarding building rules, assessments, and unit maintenance.
Non-resident foreign owners who earn rental income should also designate a U.S.-based tax preparer or CPA to handle the annual federal and state tax filings. Withholding obligations under IRC § 1441 may require the tenant (or management company) to withhold 30% of gross rent and remit it to the IRS unless the owner has made the effectively connected income election and provided a valid Form W-8ECI to the tenant or agent.
Choosing a Real Estate Attorney as a Foreign Buyer
Foreign buyers purchasing NYC real estate should work with an attorney who understands the specific issues that international transactions present. The attorney should be able to:
- Advise on LLC structuring in coordination with a tax advisor
- Coordinate ITIN applications and FIRPTA planning
- Navigate FinCEN GTO and CTA compliance
- Work with international lenders and their documentation requirements
- Handle power of attorney execution for buyers who cannot attend closing in person
- Explain closing documents in the buyer’s language where possible
- Coordinate with a property management company for non-resident owners
- Identify sanctions compliance issues where applicable
Yazdi Law represents foreign nationals in residential and commercial real estate transactions throughout New York City. The firm provides bilingual English and Farsi representation and has experience with the tax, compliance, and structural issues that arise in international purchases. For a general overview of the New York residential closing process — including timelines and what to expect at each stage — see our 2026 resource guide for buying and selling residential property in New York and our post on buying and selling property in NYC and Great Neck.
