A US citizen who dies in 2026 can pass $15 million before the federal estate tax touches anything. A person whose home is outside the United States, who dies owning a Manhattan condo, is sheltered on $60,000 of US-situated assets, and the rate above that line climbs to 40%. Same apartment, same deed, two completely different outcomes depending on where the owner lived.
That gap is the most expensive thing about buying New York City property from abroad, and it is almost never raised at a showing. Everything else, the purchase taxes and the closing mechanics, works close to the way it works for anyone else. I have been selling NYC real estate since November 2001, and my sales practice runs across Manhattan, Brooklyn, and Queens: resales, new construction, and buy-side. Below is the order I would work a purchase through with a buyer who is not in the country.
One boundary first. "Foreign buyer" here means one thing: a buyer whose primary residence is outside the United States. It is a tax-residency and paperwork description. What a building asks of you is a documentation question, not a question about where you are from.
The purchase taxes do not change
New York does not run a separate rate card for overseas buyers. The mansion tax starts at 1% at a $1 million purchase price and steps through eight brackets to 3.9% at $25 million, and the buyer pays it whether the buyer is in Sydney or in Sunnyside. The city and state transfer taxes fall on the seller in the standard contract: 1% to 2.625% for the NYC Real Property Transfer Tax, 0.4% for most New York State transfers.
The detail sits in my mansion tax guide, my transfer tax breakdown, and the full closing cost breakdown. Budget them exactly as a local buyer would. Nobody can quote you a different rate because of where you live.
Financing without a US credit file
The most common thing I hear from buyers abroad is that they assumed a mortgage was off the table without a US credit score. It is not. Foreign national loan programs exist specifically for borrowers with no US FICO file, and they underwrite the asset and the documentation instead of the credit bureau.
As of 2026, expect 20% to 40% down. Full-documentation programs for a primary or second home generally sit at 25% to 40% and qualify on verified foreign income and assets; investment programs that qualify on the unit's own rental income typically want 20% to 30%. Lenders here lean hard on reserves and international bank statements, often with certified translations, plus proof of the source of the down payment funds.
Two NYC notes. Co-op boards often set a financing ceiling stricter than the lender's, so the building can shrink your loan before the bank does. And at the $1 million-plus condo prices where most overseas purchases land here, cash is common: 48% of foreign buyers nationally paid all cash in the year through March 2026, against 28% of all existing-home buyers. Cash removes the loan contingency, not the tax planning.
You need a US tax number before you need a mover
Buying does not by itself require a Social Security number. Filing does. Most overseas owners end up needing an Individual Taxpayer Identification Number, applied for on IRS Form W-7, because they will file US returns on rental income and again when they sell. Start it early: a FIRPTA withholding certificate application cannot be processed if the ITIN application attached to it is rejected.
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FIRPTA is a selling problem, not a buying one
This is the point that gets explained backwards more than any other. The Foreign Investment in Real Property Tax Act applies when a foreign person disposes of US real property. It does not tax you for buying.
Two consequences follow. When you buy from an ordinary US seller, FIRPTA is not your problem. When you eventually sell, your buyer becomes the withholding agent and must hold back a percentage of the gross sale price out of your proceeds and remit it to the IRS. That withholding is a prepayment against your actual US tax bill, not an extra tax, and you reconcile it on a return. Getting the cash back can take many months.
| Gross sale price when you sell | Buyer will occupy as a residence | Withholding |
|---|---|---|
| $300,000 or less | Yes, and meets the use test | 0% |
| $300,001 to $1,000,000 | Yes, and meets the use test | 10% |
| Above $1,000,000 | No exception available | 15% |
| Any price, buyer will not occupy | No | 15% |
Withholding is on the gross price, not on the gain. The residence exceptions require the buyer or the buyer's lineal family to occupy the unit for more than half of the days it is used residentially in each of the two years after closing.
Read the bottom rows against NYC pricing and the answer is blunt: at the $1 million-plus levels where most overseas buying happens here, no exception exists. Plan on 15% of the gross price unless you act in advance. The action is IRS Form 8288-B, an application for a withholding certificate that asks the IRS to reduce the hold to something closer to the real tax on the gain. Complete applications typically take about 90 days, so it is filed well ahead of closing rather than at the table.
The rule also runs the other way. If you buy from a seller who is also a foreign person, you are the withholding agent and you carry personal liability for the amount. Your attorney should confirm the seller's status before contract.
New York withholds separately from the IRS
The federal hold is not the whole story, and this is where out-of-state advisors miss a number. A seller who is a nonresident of New York State, which includes a seller living abroad, files Form IT-2663 and pays estimated New York income tax on the gain at closing. For 2026 the form computes at 10.90%, the top state rate, applied to the estimated gain rather than the gross price. It is due at least 20 days before closing and credits against your New York return for the year.
Federal withholding on the gross price and state estimated tax on the gain land at the same closing. Model it with a CPA the year before you list, not the week before.
The $60,000 line
US real property is always US-situated for estate tax purposes. For a decedent who was not a US citizen or resident, the unified credit shelters only the first $60,000 of US-situated assets, and the rate table on the excess runs from 18% to 40%. The comparable figure for a US citizen dying in 2026 is $15 million. The United States has estate and gift tax treaties with a limited set of countries, and where one applies it can raise or reallocate that exemption. Whether a treaty covers you, and how to hold the asset if it does not, belongs in the file before you sign a contract.
Entity ownership: decide before the offer, not after
The estate exposure above is why most overseas buyers ask about LLCs, trusts, and holding structures. Those can change the analysis, and they carry their own costs, disclosure duties, and approval consequences. The full treatment is in buying an NYC apartment through an LLC or trust, so here is the headline: New York City requires an LLC on a residential deed to file a member list with the transfer tax returns at closing, and since January 1, 2026 the New York LLC Transparency Act requires LLCs formed or authorized here to report beneficial ownership to the Department of State. That state filing goes to a restricted database, not a public one, and LLCs authorized before 2026 have until December 31, 2026 to comply.
The sequencing point matters more than the structure. Confirm the building will approve entity ownership before you spend money forming anything, because a co-op that does not permit it will not change its by-laws for your closing.
Condos and co-ops handle overseas paperwork differently
The condo and co-op distinction, covered generally in my co-op versus condo comparison, has a specific shape for a buyer whose financial life is documented outside the United States.
Condominium
- • Real property, conveyed by deed
- • No purchase approval; the board holds a right of first refusal it rarely exercises
- • Application is disclosure, not an interview
- • Entity ownership is generally permitted; check the offering plan
- • Subletting rules are usually the loosest of the two
Cooperative
- • Shares in a corporation plus a proprietary lease
- • Board approval required to purchase
- • Packages are built around US tax returns, US bank statements, and post-closing liquidity the board can verify
- • Many buildings restrict entity ownership and pied-a-terre use
- • Financing caps set by the building, on top of the lender's
Read that as friction, not a verdict. Co-ops are the larger share of NYC housing stock and usually the better value per square foot. The obstacle for an overseas buyer is documentary: a package built around US filings is harder to assemble from foreign statements, and boards weigh liquidity they can confirm. That varies enormously building to building. Worth knowing too: national origin and citizenship or immigration status are protected classes under both New York State and New York City law, and a board's financial standards have to be applied the same way to everyone. The practical move is to have your agent confirm in writing what a building accepts before you tour it, so mismatches are ruled out early rather than after a rejected package.
Your deed is public the day it records
Buyers used to jurisdictions with private land registers are often surprised here. Recorded deeds, mortgages, and transfer tax filings for Manhattan, Brooklyn, Queens, and the Bronx are published on the city's ACRIS system, searchable by address or by name at no cost; Staten Island records through the Richmond County Clerk. The purchase price, the date, and the names on the deed are visible to anyone with a browser. Entity ownership changes what appears on the face of the deed and does not make a purchase invisible. If discretion is a real requirement rather than a preference, that conversation belongs with your attorney before the contract is signed.
Closing without flying in
You do not have to be in New York. Two mechanisms carry most of these closings.
The first is a power of attorney, drafted narrowly for the transaction and executed in a form New York accepts. Signing at a US consulate or embassy is the cleanest path; signing locally usually means adding an apostille under the Hague Convention. Lenders and title companies review POAs closely and reject ones that are too old or too broadly drawn, so send it for approval early.
The second is remote notarization. New York permanently authorized electronic notarization under Executive Law 135-c, effective January 31, 2023. The notary must be physically in New York at the time of the act; the signer can be anywhere. The limitation is that on a real estate transaction the lender, title agency, or attorney has to approve remote notarization in advance, so confirm it in the file rather than assuming it.
You will also need a New York real estate attorney, which is not optional here the way it is in some states. NYS rules require me to give you a list to choose from rather than a single name, and I keep one. What that attorney does is laid out in what to expect from a NYC real estate attorney. Add one screening question to the usual ones: ask how many closings they have run on FIRPTA and IT-2663 files.
The sequence that works is tax structure first with an attorney and a CPA, financing pre-qualification second, building screening third, then the search. None of this is a reason to stay out of the market. It is a reason to order the professionals correctly, and to treat the exit taxes as part of the purchase decision rather than a surprise you meet years later.
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I confirm entity, financing, and residency policies with the building before my clients spend money on a package. Licensed Real Estate Associate Broker, Keller Williams NYC, working in English and Spanish across all five boroughs.
Schedule a Private ConsultationThis article is general information about process and is not legal or tax advice. FIRPTA planning, estate tax exposure, treaty positions, and entity structuring are decisions to make with a licensed attorney and a CPA who handle cross-border matters.
