Considerations for foreign buyers purchasing real estate in New York and seeking information about real estate investment consulting.
If there is one factor that makes New York the cultural and financial epicenter of the world is its diversity. This diversity has been achieved due in part to the fact the New York welcomes foreign real estate buyers. Indeed, foreign real estate buyers make up a substantial part of the total investments made in New York every year and the number of foreign nationals seeking to own a piece of this great city is only growing. However, the process of selling, buying and owning real estate is different in New York than it is in other parts of the world and there are a number of issues that foreign buyers especially should be aware of.

The process of purchasing a residential property for foreign buyers begins similarly to those of local buyers. Buyers should be aware that there are a number of major forms of ownership that can be found across various building types. However, foreigners overwhelmingly purchase condominiums in new developments due to the ease of transacting, management, and the fact that New York has some of the most luxurious developments in the world.

However, foreign buyers should consider all the options available to them because condominiums in new developments tend to be the most expensive option both in terms of purchase price but also in terms of common charges and property taxes. Co-ops, for-example, often welcome foreign buyers, especially if the buyer plans to occupy the unit long-term, is purchasing without financing, has US-source income and substantial net-worth. Some of the most prestigious, historic properties in New York are co-ops and often they are substantially less expensive than condominiums both in terms of purchase price and in terms of cost of monthly expenses. 

Single family townhouses offer owners complete privacy and control and multifamily properties can allow owners to rent a portion of the property to others which helps keep the overall costs of ownership down. Often overlooked by foreign buyers, single family and multifamily properties are even easier to purchase than condos and are an excellent long-term investment.

One major mistake foreign buyers make is underestimating the complexity of cross-border treatment of income and capital gains taxes. Taxation of income and capital gains from real estate ownership is more complex when an owner pays taxes or is a resident in a different country. While there are double-tax treaties in place between the United States and many nations, foreign buyers need to be sure that they are acquiring the property in a way that is advantageous from a tax perspective. Only a tax advisor with experience structuring cross-border real estate transactions can advise you in this regard. Etage Real Estate is able to refer you to the right advisor to ensure you have the proper acquisition structure in place before you begin your search.

Foreign buyers should always be represented by a buyer’s broker so to ensure their interests are being protected. This is especially the case for those who are considering purchasing property in New York as an investment and for diversification purposes. Often such buyers come to New York with a very narrow view of the location, type of property and form of ownership they desire for investment. Working with a buyer’s broker can help such buyers get to know New York a little better and aid them in making more informed decisions which will have an effect on the performance of their investment and the overall satisfaction they get from owning a property.

If you are interested in buying real estate in New York, please contact us: Tel. +1 (212) 535-7200  or email info@etagerealestate.com.
Please see information about Holding Structures Associated with Investments in Real Estate by Non-resident Aliens.