Foreigner purchase Manhattan Property FAQ

By
Real Estate Agent with Douglas Elliman Real Estate

We as Manhattan Real Estate professionals, we work with many international foreigners wanting to invest in Manhattan Real Estate. In addition to educate foreign buyers about the maze of Manhattan Real Estate market, our specialty isfacilitatethe purchase to ensure the transaction is smooth and successful. Below are some frequent asked questions by our foreign buyers, the answers are formulated by our team of professionals (tax accountants and attorneys who also specialized in foreigners purchase in Manhattan New York.) These answers are general and not case specific. To best address to your specific case, contact us directly at (917)837-8869 or Email at EHSU@elliman.com and we can set up a confidential consultation.


Can Foreign Nationals buy a Manhattan Property without having Social Security Number or US residency?
Yes, they can legally, but have to meet the condominium/coop board's requirements for approval. At the sale of the real property, Non-resident aliens are subject to federal withholding tax at 10% of the gross sales price, and to a 8.97% New York State estimate income tax on the net sales proceeds (gains).

Can Foreign Nationals with work visa or student visa buy Manhattan Properties?
Yes, they can legally, but have to meet the condominium/coop board's requirements for approval.  If they remain non-resident aliens at the time of the sale of the real property, they will be subject to the same taxes at the time of sale, as above.

If not, what kind of documents should a foreign nationals prepare to be able to buy? 
They need to have  a valid passport and/or other official photo ID for identification purpose.
 
What are the Options for Foreign Nationals (non-residents aliens) to hold title: (these answers are information only, we are Real Estate professionals, therefore, before you make a specific decision, we recommend you to discuss with our team of attorneys and tax accountants for your specific case.)

  • Individual:  Individual may be exposed to unlimited personal liability, and to estate issues, for instance, inheritance,  will probate and estate administration, when the individual owner dies.
  • LLC: Limited Liability Corporation provides insulation for members from personal liability, but will incur maintenance costs, such as  filing fees for its formation, annual franchise tax  and is subject to higher formation costs (higher than a corporation).
  • Trust:  Trust is an unincorporated entity, cannot hold title by itself; title must be reqistered in the  individual trustee's name.;  the individual trustee may be exposed to unlimited personal liability.
  • S Corporation:  S Corporation is a legal entity, insulates shareholders for from personal liability, does not pay income tax itself, the income tax liability is attributed to the shareholders.  It is subject to filing fees for incorporation, annual franchise tax, etc.
  • C Corporation:  C Corporation is a full fledged legal entity.  It provides shareholders insulation from personal liabilities.  It is a taxable entity for corporate income tax.  Any distribution of after tax profit to shareholders in the form of dividends will be subject to income tax for the shareholder.  It incurs maintenance costs, such as filing fees for incorporation, annual franchise tax, etc.  Its filing fees are less than that for the LLC.
  • Limited Partnership:  the limited partner's liability is limited to his/her capital interest in the limited partnership, whereas the general partner will be subject to unlimited personal liability.  Limited partnership, like general partnership does not pay income tax.  The income tax liabilities are attributed to the individual partners. A limited partnership need to file the partnership agreement with the government.

*These answers are general and not case specific. To best address to your specific case, contact us directly at (917)837-8869 or Email at EileenHsuNYC(@)gmail.com and we can set up a confidential consultation.

If both husband and wife have green cards, will they pay tax similarly as above options? 
Resident individuals owning real property pay the same taxes, but not subject to the gross 10% federal withholding tax and the 8.97% New York State estimate income tax on the gains at the sale of the real property.
 

Can the Foreigners avoid United States taxes?
The taxes cannot be avoided.  The non-resident investor must pay the above taxes at the time of closing of the sale, without the tax payments, the deed will not be accepted for recording.  After having paid the taxes, the non-resident investor may, but need not, keep the proceeds in the U.S. without additional tax (except income tax on the interest payment on such proceeds).

If you are a foreign national and would like to better understand how to purchase and invest in Manhattan Real Estate, it is a good idea to discuss the situation in precise manner. Contact us today at (917)837-8869 or email us at EileenHsuNYC(@)gmail.com.

Posted by

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Eileen Hsu 許雅嵐 (email: EHSU(@)elliman.com)

Our team specialize in Manhattan New York Condominiums, townhouses, and condops.

We are condominium residents ourselves so we understand the Manhattan New York condominium community. We also enjoy all Manhattan neighborhoods, especially Upper West Side, Lincoln Square, Midtown East, Murray Hill, Financial District, Chelsea, Fifth Avenue, Greenwich Village, Nolita and etc just to name a few. If you or you know someone that may be interested in selling, buying or leasing their Manhattan New York condo, call us today (917)837-8869 or (646)644-6929 and we can discuss your specific Real Estate goals.

Manhattan New York Condo Specialists or Chinese Speaking Real Estate Agent

 

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Ambassador
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Gerry Michaels
Glasswork Media Arts - Gettysburg, PA
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Eileen, I absolutely love your posts. I have begun bookmarking posts that you write about this subject. even if I never move back to the "the city" I find this subject so interesting. thanks for sharing your expertise on this. Have a great day

Nov 16, 2010 04:19 AM #1
Rainmaker
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Eileen Hsu
Douglas Elliman Real Estate - Manhattan, NY
LICENSED REAL ESTATE SALESPERSON

Gerry - Thank you for your kind words. I am glad that you find it informative and valueable.

Nov 16, 2010 04:21 AM #2
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Loreena and Michael Yeo
3:16 team REALTY ~ Locally-owned Prosper TX Real Estate Co. - Prosper, TX
Real Estate Agents

Great topic. I'm learning so much from you, especially in this article. I'm currently serving a non-resident alien too.

Nov 16, 2010 07:01 AM #3
Rainmaker
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Will Nesbitt
Nesbitt Realty at Condo Alexandria - Alexandria, VA
Nesbitt Realty is a family-run brokerage.

Eileen your posts are very impressive! You always have the right and detailed information and the way you deliver them is simply outstanding! Keep up the good work!

Nov 18, 2010 01:23 AM #4
Rainer
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Sean Railton
Park City Realty Group - Park City, UT

Good information we have started an international committee for dealing with getting this type of information out to agents.

Nov 20, 2010 09:17 AM #5
Rainmaker
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Erby Crofutt
B4 U Close Home Inspections&Radon Testing (www.b4uclose.com) - Lexington, KY
The Central Kentucky Home Inspector, Lexington KY

Nobody gets away from Uncle Sam's Taxes do they?

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Nov 25, 2010 01:06 AM #6
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Eileen Hsu

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