Foreigners can buy real estate in New York City without restrictions. U.S. law allows non-citizens to purchase any property type, including condos, co-ops, and townhouses. However, certain property types like co-ops may have strict board approval requirements that make purchases more challenging. Foreign investors face some unique tax considerations, but the buying process itself remains largely the same as for U.S. citizens.
At Sishodia PLLC, Manhattan real estate attorney Natalia A. Sishodia can help international buyers manage NYC real estate transactions. Our foreign investment lawyers in Manhattan can assist with everything from entity structuring to closing. We represent clients purchasing real estate properties throughout Manhattan and New York City.
This guide explains what foreign buyers need to know, from financing options to tax obligations and closing procedures. If you are a foreigner considering buying a property in Manhattan, contact us at (833) 616-4646 to schedule a consultation.
What Property Types Can Foreigners Buy in New York?
Foreigners can purchase any real property in New York, including single-family homes, condominiums, co-ops, townhouses, and multi-family buildings. No federal or state law prohibits non-citizens from owning real estate. Foreign nationals and foreign corporations account for a significant portion of Manhattan’s luxury real estate market.
The main restriction involves co-ops, which require board approval and typically demand U.S. tax returns. This makes co-op purchases difficult or impossible for non-U.S. taxpayers. Condominiums and townhouses do not have these restrictions, making them the preferred choice for international buyers.
Manhattan offers diverse property options across many price points. Luxury condos at developments like 15 Hudson Yards and 70 Vestry Street in Tribeca attract foreign investors seeking modern amenities and strong appreciation potential. These buildings typically offer simpler purchase processes than older co-op buildings.
Key Takeaway: Foreign buyers can purchase any property type in NYC, but condos and townhouses are easier than co-ops. Co-ops require U.S. tax returns and board approval, which creates barriers for international investors.
Can Foreign Buyers Get Mortgages in New York?
Foreign buyers can obtain mortgages from U.S. banks, though requirements are stricter than for citizens. Several banks in Manhattan and throughout New York offer loans to foreign investors with down payments of 30-40% and three years of mortgage payments in liquid assets held in U.S. bank accounts.
Some banks offer asset-based loans if you transfer assets to a U.S. institution. Working with a financial advisor who specializes in foreign buyer financing helps you find the best options. Experienced real estate attorneys can refer you to mortgage brokers with the right background for international transactions.
Cash purchases avoid New York’s mortgage recording tax because that tax applies when a mortgage is recorded. In New York City, the combined mortgage recording tax under New York Tax Law § 253 depends on the mortgage amount and other factors, and the City recommends using the Automated City Register Information System (ACRIS) to calculate the tax due for a specific transaction.
Key Takeaway: Cash purchases avoid the mortgage recording tax, which can be roughly 2% of the loan amount in New York City. This tax savings is one reason many foreign investors choose to pay cash rather than finance their purchases.
What Is the Step-by-Step Process for Foreign Buyers?
The buying process involves several stages from initial research through closing. Having an experienced real estate attorney should be your first step, as they guide you through every stage and protect your rights. Here’s how the process works:
The Foreign Buyer Purchase Process:
- Preparation and Planning. Decide on the neighborhood, property type, and budget before beginning your search. Meet with a banker or mortgage broker for pre-approval if you require financing. Consult with a tax specialist to understand your tax liability, depending on whether you are buying as an investment or a primary residence.
- Property Search and Offer. Work with a licensed real estate agent to view properties. Make an offer once you find the right property. This offer is not initially binding. New luxury developments typically sell at the asking price, while older properties may accept lower offers.
- Contract Review and Signing. Your attorney reviews the contract within 3-5 business days. The seller may continue showing the property until you sign. Once all parties have signed, you pay a 10% deposit, which goes into the seller’s attorney’s escrow account.
- Due Diligence Period. Conduct appraisals and surveys if you are obtaining a mortgage. Your attorney performs a title search and checks for violations or liens. The bank verifies your documentation and reviews building financials if you are financing the purchase.
- Pre-Closing Walkthrough. Schedule a final property inspection before closing. Many foreign buyers conduct this via video conference with their real estate agent rather than traveling to New York for the walkthrough.
- Closing. Sign the final documents with all parties present or via Power of Attorney. Your attorney handles all payments, including taxes, fees, and title insurance. You will receive the deed and keys once the seller receives payment.
Key Takeaway: Most foreign investment closings happen via Power of Attorney and wire transfers. You do not need to physically be in New York City to complete your purchase.
Foreign Investment Lawyer in Manhattan – Sishodia PLLC
Natalia A. Sishodia, Esq., LL.M.
Natalia A. Sishodia, Esq., LL.M., is a foreign investment lawyer who advises international individuals, investors, and businesses working through detailed U.S. legal and financial frameworks. Fluent in English and Russian, Ms. Sishodia has represented clients from across Europe, Asia, the Middle East, and North America, offering strategic counsel on cross-border real estate acquisitions, business structuring, and tax-efficient investment strategies in New York City. She is trusted by high-net-worth individuals, global entrepreneurs, and institutional lenders seeking sophisticated, results-driven legal solutions.
With extensive experience handling high-value domestic and international real estate transactions, Ms. Sishodia guides foreign investors through every phase of the process. Her practice also includes private client services such as international estate planning, wealth preservation, and asset protection, including digital assets and cryptocurrency. Known for her meticulous planning and “stress-free” closings, Ms. Sishodia delivers personalized legal strategies designed to protect investments and build long-term legacies in the U.S.
What Ownership Structure Should Foreign Buyers Use?
Foreign investors can hold property in their personal name, through an entity (LLC, Corporation, or Partnership), or in a trust. A Limited Liability Company (LLC) is a business structure that separates personal assets from business assets. An LLC can hold property and provide liability protection while offering flexible tax treatment. The right structure depends on your tax situation and asset protection goals. It’s important to consult with both a real estate attorney and tax professional before deciding.
Personal ownership seems simplest but exposes you to significant taxes. You face withholding tax under the Foreign Investment in Real Property Tax Act (FIRPTA) of 15% of the sale price when you sell, as required by Internal Revenue Code § 1445. You also face New York State withholding tax under New York Tax Law § 663 at 10.9% on gains at closing, paid using form IT-2663. Most importantly, personal ownership exposes you to estate tax of up to 40% of market value when you die.
Entity ownership through an LLC or corporation offers better asset protection and estate planning benefits. However, co-ops typically do not allow entity purchases, as they require personal ownership. Condos and townhouses accept entity ownership, which is one more reason foreign buyers prefer these property types.
| Ownership Type | Tax Benefits | Asset Protection | Estate Tax Exposure | Co-op Eligible |
|---|---|---|---|---|
| Personal | None | Low | Up to 40% of market value | Yes |
| LLC | Flexible tax treatment | High | Reduced with proper planning | Usually no |
| Corporation | Potential tax deferral | High | Reduced with proper planning | Usually no |
| Trust | Estate tax reduction | Moderate to high | Varies by trust type | Rarely |
Knowledgeable foreign investment attorneys from Sishodia PLLC can structure your purchase to minimize tax exposure and maximize asset protection. The right structure varies based on your citizenship, residency status, and estate planning goals.
Key Takeaway: Personal ownership exposes foreign buyers to FIRPTA withholding (15% of sale price), New York State withholding (10.9% on gains), and federal estate tax up to 40% of market value upon death. Entity structures can reduce these tax burdens but require upfront planning with experienced legal and tax advisors.
Do Foreign Buyers Need an ITIN Number?
Foreign buyers need an Individual Tax Identification Number (ITIN) if they don’t have a Social Security Number. The Internal Revenue Service (IRS) assigns ITINs to non-resident aliens who need to comply with U.S. tax laws. You need an ITIN to purchase property if you don’t have a Social Security Number.
You obtain an ITIN by submitting Form W-7 to the IRS along with necessary identification documents. The process typically takes several weeks, so start early if you’re planning a purchase. Many foreign buyers apply for their ITIN during the due diligence period after signing a contract.
An experienced real estate attorney can coordinate your ITIN application with the purchase timeline. This ensures you have the number ready when needed for closing documents and future tax filings.
What Closing Costs Should Foreign Buyers Expect in NYC?
Closing costs in Manhattan vary widely based on property type and whether you finance. These costs may include legal fees, title insurance, recording fees at the New York County Clerk’s Office, lender-related charges, and various state and city government fees.
The mansion tax applies to properties over $1 million, starting at 1% and increasing to 3.9% for properties over $25 million. As a buyer, you pay this tax at closing along with other fees.
If you obtain financing, you also pay the mortgage recording tax at roughly 2% of the loan amount. This is one reason many foreign buyers choose to pay cash. Title insurance costs vary based on purchase price and protect you against defects in the property’s title history.
Transfer taxes are split between buyer and seller, with rates varying based on property value. Your attorney can provide a detailed breakdown of expected closing costs during the contract review phase. Budget for these costs early in your planning process to avoid surprises.
How Can Foreign Buyers Minimize Tax Exposure?
Foreign buyers should work with tax professionals before purchasing to develop strategies that minimize tax liability. The key is proper structuring from the beginning, because restructuring after purchase costs more and may not achieve the same results.
Entity structures like LLCs can help reduce estate tax exposure and provide asset protection. However, the specific structure depends on your country of citizenship, residency status, and overall wealth. What works for one buyer may not work for another.
Some buyers use life insurance policies to provide liquidity for estate taxes. Others create specific types of trusts that remove property from their taxable estate. These strategies require careful planning with attorneys who focus on foreign investment and international tax law.
Don’t rely on general advice or assume strategies that worked for others will work for you. Individual circumstances vary greatly, and tax laws change regularly. Investing in proper legal and tax advice upfront saves substantial money in the long run.
Get Help from an Experienced Manhattan Foreign Investment Attorney
Buying real estate in New York City as a foreign investor involves complex legal, financial, and tax considerations. You deserve experienced guidance to protect your investment and minimize your tax exposure. The right structure and strategy make a significant difference in both short-term costs and long-term wealth preservation.
Manhattan foreign investment lawyer Natalia A. Sishodia has helped international buyers successfully purchase property throughout New York City. Attorney Sishodia understands the unique challenges foreign buyers face and can help you navigate the process efficiently while protecting your interests and maximizing your investment value.
Call Sishodia PLLC today at (833) 616-4646 to schedule a consultation. Our office serves international buyers throughout Manhattan, Brooklyn, Queens, the Bronx, and Staten Island. Whether you’re purchasing your first New York property or expanding your real estate portfolio, contact us to discuss your foreign investment needs.
