Can Foreign Buyers Purchase U.S. Real Estate?

Yes. Foreign nationals can purchase real estate in the United States without restriction — there is no federal law prohibiting foreign ownership of U.S. real property. However, foreign buyers face additional requirements: FIRPTA withholding on resale, limited state-specific restrictions near military and agricultural land, restricted access to standard U.S. mortgages, and the need to obtain an ITIN for tax filings.

What Are the Tax Implications for Foreign Buyers?

Foreign buyers of U.S. real estate face distinct U.S. tax obligations: FIRPTA withholding of 15% on resale (reduced to 10% from $300,001 to $1M, or 0% at $300,000 or less, only when the buyer acquires the property for use as a residence), capital gains tax on sale, U.S. estate tax up to 40% with only a $60,000 exemption on U.S. situs assets, and U.S. income tax on rental income with the option to elect effectively connected income treatment.

Should Foreign Buyers Purchase Through an LLC?

For many foreign buyers, purchasing U.S. real estate through a U.S. or foreign LLC — or through a foreign corporation — provides significant advantages in estate tax planning (avoiding U.S. situs asset treatment), liability protection from property-related claims, and privacy in states like Wyoming and Delaware. The benefits come with ongoing IRS compliance obligations that must be maintained properly.

FIRPTA — the Foreign Investment in Real Property Tax Act — is a U.S. federal law that requires buyers to withhold 15% of the gross purchase price when purchasing real property from a foreign seller. Reduced rates apply only when the buyer acquires the property for use as a residence: 0% at $300,000 or less, 10% from $300,001 to $1 million, and 15% above $1 million. If the buyer will not use it as a residence, 15% applies at any price. The buyer is personally liable for the withholding if not collected. Foreign sellers may apply for a withholding certificate to reduce the amount.

What Is the Golden Visa Program?

The Golden Visa program — formally the EB-5 Immigrant Investor Program — allows foreign nationals to obtain U.S. permanent residency in exchange for a qualifying investment in a job-creating U.S. business: $1,050,000 standard or $800,000 in a Targeted Employment Area, with a 10-job creation requirement. EB-5 is not a real estate program — the investment must fund job creation, though real estate development projects can qualify when properly structured.

International Buyers — Questions & Answers

International buyers face a different set of tax, financing, compliance, and structuring questions than U.S. residents. These 50 answers cover FIRPTA, foreign-national mortgages, LLC ownership, treaty estate tax, EB-5, and the markets that serve international capital best.

Can Foreign Buyers Purchase U.S. Real Estate? — Yes — foreign nationals can purchase U.S. real estate without federal restriction. FIRPTA, state restrictions, financing limits, and ITIN requirements explained for international buyers.
What Are the Tax Implications for Foreign Buyers? — U.S. tax implications for foreign buyers: FIRPTA withholding on sale, capital gains, U.S. estate tax at 40% above a $60K exemption, and rental income treatment with ECI election.
Should Foreign Buyers Purchase Through an LLC? — Why foreign buyers often purchase U.S. real estate through an LLC or foreign corporation — estate tax planning, liability protection, and privacy benefits weighed against ongoing compliance costs.
What Is FIRPTA? — FIRPTA — the Foreign Investment in Real Property Tax Act — requires buyers to withhold 15% of the price when purchasing from a foreign seller; 10% or 0% applies only if the buyer will use it as a residence.
What Is the Golden Visa Program? — The Golden Visa — the U.S. EB-5 Immigrant Investor Program — grants permanent residency to foreign nationals who invest $800K (TEA) or $1.05M in a job-creating U.S. business.
How does FIRPTA withholding work? — Buyer's obligation, exceptions, and reduced-withholding certificates.
When is FIRPTA reduced to 10%? — When the buyer acquires the home for use as a residence and the price is $300,001 to $1 million.
When is FIRPTA waived? — When the buyer acquires the home for use as a residence and the price is $300,000 or less.
What is the FIRPTA withholding certificate? — IRS Form 8288-B for reduced withholding.
What is an ITIN? — Individual Taxpayer Identification Number for foreign buyers.
How do I get an ITIN? — Form W-7 process and certified acceptance agents.
What is an EIN for a foreign buyer LLC? — Federal tax ID for the LLC owning property.
Can a foreign buyer get a U.S. mortgage? — Yes — foreign national loan programs at major banks.
What are typical foreign national loan terms? — 30–40% down, higher rates, and 12 months reserves.
Which banks offer foreign national mortgages? — HSBC, City National, BNY Mellon, JPMorgan Private Bank.
Can foreign buyers pay cash? — Yes — majority of foreign luxury buyers transact in cash.
What is wire transfer compliance for foreign buyers? — AML, source of funds, and beneficial ownership requirements.
What is the source of funds documentation? — Bank statements, sale records, and CPA letters.
What is the Corporate Transparency Act? — Beneficial ownership reporting for U.S. LLCs.
What is FinCEN reporting? — Treasury filing requirements for foreign-owned U.S. entities.
What is the FinCEN Geographic Targeting Order? — All-cash luxury purchase disclosure in select markets.
Should a foreign buyer use an LLC? — Privacy, estate tax, and liability considerations.
What is a foreign blocker structure? — Foreign corp → U.S. LLC for estate tax protection.
What is U.S. estate tax for foreign buyers? — 40% above $60K exemption on U.S. situs assets.
What is the U.S.–UK estate tax treaty? — Treaty exemption levels for UK domiciliaries.
What is the U.S.–France estate tax treaty? — Treaty rules for French nationals owning U.S. real estate.
What is the U.S.–Canada tax treaty? — Canadian buyer treaty benefits and credits.
What is the gift tax for foreign buyers? — Transfer rules between non-U.S. spouses and family.
What is the QDOT? — Qualified Domestic Trust for non-citizen spouses.
What is the EB-5 program? — Permanent residency through job-creating investment.
What is the E-2 investor visa? — Treaty-country investor visa for active business operations.
Does buying real estate get me a U.S. visa? — No — real estate alone does not qualify for U.S. visas.
What is the best market for international buyers? — Miami, New York, Los Angeles, Aspen, and Palm Beach.
Why do international buyers prefer Miami? — No state income tax, direct flights, and a multilingual brokerage community.
Why do Latin American buyers choose Miami? — Currency hedge, banking access, and cultural proximity.
Why do European buyers choose New York and Miami? — Cultural alignment, banking, and lifestyle access.
Why do Middle Eastern buyers choose New York and Beverly Hills? — Trophy assets, education, and global capital safe haven.
Why do Asian buyers choose Los Angeles and Seattle? — Pacific Rim access, education, and tech ecosystem.
Why do Canadian buyers choose Florida? — Climate, no state income tax, and the Snowbird Treaty.
What is the Canadian Snowbird visa? — 183-day visit rule and proposed extended-stay legislation.
What are property taxes for foreign owners? — Same as U.S. owners — no foreign penalty.
Are there foreign-buyer taxes in U.S. cities? — Unlike Canada or Singapore, U.S. does not levy foreign-buyer transfer tax.
What is the rental income tax for foreign owners? — 30% withholding unless elected as ECI.
What is ECI election? — Effectively Connected Income election to net rental income.
What is Form 1040NR? — Non-resident federal tax return.
What is Form 5472? — Foreign-owned U.S. LLC reporting requirement.
How do I open a U.S. bank account as a foreigner? — Private bank relationships and documentation needed.
What is a power of attorney for foreign closings? — Allowing U.S. attorney to close on buyer's behalf.
Can I close remotely from abroad? — E-notarization, apostilled POAs, and consular notarization.
What is an apostille? — International document authentication under the Hague Convention.
What is title insurance for foreign buyers? — Same coverage as domestic — strongly recommended.
What is the role of a luxury international buyer's agent? — Translation, time-zone management, and cross-border closing coordination.