Buying an Apartment in New York as a Foreigner: Co-op vs Condo
Published on: August 20, 2026
Last verified: 20 August 2026. US federal, New York State and New York City rules, rates and reporting obligations change, and several reporting rules described here are the subject of ongoing litigation; confirm the current position before making an offer.
Quick answer: There is no restriction on foreign nationals owning New York property, and no purchase surcharge for non-residents. The obstacle is the stock: most pre-war Manhattan apartments are co-ops, and a co-op board package built on US tax returns, US credit and US references is a documentary test most non-residents cannot pass, which is why international buyers concentrate in condos. Budget for the mansion tax cliff (1 per cent of the entire price from exactly 1 million dollars, rising to 3.9 per cent), sponsor-unit transfer taxes shifted to the buyer, FIRPTA withholding of 15 per cent of gross proceeds when you sell, and a federal estate tax exemption for non-US-domiciled owners of only 60,000 dollars, which is the real reason foreign buyers structure through entities.
There is no federal or New York State restriction on foreign nationals owning residential property in the United States. You do not need a visa, a green card or US residency to buy a New York apartment, and you do not need a US partner or a trust structure to hold it.
The obstacle in New York is not immigration law. It is that most of Manhattan's apartment stock is not real estate in the ordinary sense. It is shares in a housing cooperative, and the corporation that owns the building decides who may buy in. Understanding that single structural fact explains almost everything about how foreign buyers actually behave in this market.
Two completely different things called "apartments"
| Co-operative (co-op) | Condominium (condo) | |
|---|---|---|
| What you own | Shares in a corporation, plus a proprietary lease for a specific unit | Real property: a deed to the unit and an interest in common elements |
| Approval to buy | Board approval after a detailed application package and, usually, an in-person interview | Board has a right of first refusal it almost always waives; a much lighter application |
| Share of NYC stock | The large majority of pre-war Manhattan apartments | Most new construction since the 1980s, and most of what is marketed internationally |
| Financing limits | Boards commonly cap borrowing (often 20 to 50 per cent) and some buildings are all-cash | No building-level cap; lender rules apply |
| Renting it out | Typically restricted, often prohibited for the first years and then limited | Usually permitted, subject to house rules and minimum lease terms |
| Ownership by an entity | Generally not permitted | Commonly permitted |
| Mortgage recording tax | Not applicable (shares, not real property) | Applies |
| Title insurance | Not customary | Customary |
| Price level | Typically lower per square foot for comparable space | Typically higher, reflecting flexibility |
Why foreign buyers end up in condos
Co-op boards have broad discretion. Under longstanding New York practice, a board may decline an applicant without stating a reason, subject to federal, state and city fair housing laws, which prohibit discrimination on protected grounds including national origin. So the accurate statement is not that co-ops exclude foreigners. It is that the standard co-op underwriting package is built around documents that a non-resident buyer often cannot produce.
A typical board package asks for:
- Two or three years of US federal tax returns
- US employment verification and letters from US-based employers
- A US credit report
- Statements from US financial institutions
- Evidence of post-closing liquidity, frequently one to two years of maintenance and, in stricter buildings, considerably more
- A debt-to-income ratio below a building-specific threshold, often around 25 to 30 per cent
- Personal and professional reference letters, usually from people the board can plausibly contact
A buyer whose income, assets, credit history and references are all outside the United States is not being rejected for being foreign. They are failing a documentary test designed for domestic applicants. Some boards will accept translated and certified foreign equivalents plus a substantial escrow of maintenance payments; many will not engage at all. Because a rejection costs the buyer time, legal fees and, in a competitive market, the apartment, most brokers steer international clients toward condos from the outset.
Condops sit in between: buildings structured as co-ops but with condo-like rules, often including relaxed subletting and easier approvals. The term has no fixed legal definition, so read the actual governing documents rather than the listing description.
The money: what a foreign buyer actually pays
Foreign buyers pay the same closing costs as domestic buyers. There is no surcharge for non-residents in New York, and proposed "pied-à-terre" taxes on non-primary residences have been raised repeatedly in Albany without being enacted. Check the current position before you rely on it.
Buyer-side costs
| Item | Rate |
|---|---|
| Mansion tax (NY State additional transfer tax, buyer pays) | Tiered from 1 per cent at 1 million dollars to 3.9 per cent at 25 million dollars and above. It applies to the entire price, not the excess, so it is a cliff: 999,999 dollars pays nothing, 1,000,000 dollars pays 10,000 dollars |
| Mortgage recording tax | Roughly 1.8 per cent of the loan below 500,000 dollars and about 1.925 per cent at or above it. Condos only; co-op share loans are exempt |
| Title insurance | Around 0.4 to 0.6 per cent of price. Condos only |
| Buyer's attorney | Typically a few thousand dollars. New York transactions are attorney-driven; using one is standard practice, not optional in effect |
| Sponsor units (new development) | Offering plans commonly shift the seller's NYC and NY State transfer taxes onto the buyer, adding roughly 1.8 to 2.1 per cent. This is the largest avoidable surprise in new-construction deals |
| Building fees | Application, move-in deposit, managing agent fees, and for co-ops potentially a flip tax on resale |
Seller-side costs, which matter when you exit
| Item | Rate |
|---|---|
| NYC Real Property Transfer Tax (residential) | 1 per cent below 500,000 dollars; about 1.425 per cent at or above |
| NY State Real Estate Transfer Tax | 0.4 per cent, plus an additional 0.25 per cent on residential sales of 3 million dollars and above |
| Broker commission | Negotiable, historically around 5 to 6 per cent, with commission practice in the US in flux since 2024 |
| FIRPTA withholding | Where the seller is a foreign person, the buyer must generally withhold 15 per cent of gross proceeds and remit it to the IRS. It is a withholding, not a final tax, and can often be reduced with a withholding certificate applied for in advance |
Tax exposure a non-resident buyer should model before offering
This is where New York differs most from European markets, and it is the part that is routinely underestimated.
Rental income. A non-resident is by default subject to 30 per cent withholding on gross US-source rents. Making an election to treat the income as effectively connected with a US trade or business allows taxation on net income after depreciation and expenses instead, which is usually far better, but requires filing. New York State and City taxes apply on top of federal.
Capital gains on sale. Taxable in the United States, with FIRPTA withholding as the collection mechanism. State and city taxes apply separately.
US estate tax. This is the one that surprises people. A non-US-domiciled individual holding US-situs assets, which includes directly owned US real estate, has a federal estate tax exemption of only 60,000 dollars, with rates rising to 40 per cent above it. That is not a typo, and it is not the same generous exemption US citizens receive. New York State imposes its own estate tax on New York real property held by non-residents. Some estate tax treaties modify the outcome; most countries do not have one with the United States.
This is the main reason foreign buyers structure ownership through entities. Structures range from a single-member LLC to a foreign corporation owning a US LLC, and each trades estate tax exposure against income tax rates, filing burden and cost. There is no universally correct answer, and picking a structure from a blog post is a genuinely expensive mistake. Note also that most co-ops will not permit entity ownership at all, which pushes structured buyers further toward condos.
Reporting. In addition to income tax filings, entity buyers should be aware of federal beneficial ownership reporting rules, whose scope has been narrowed and litigated repeatedly, and of FinCEN's Residential Real Estate Rule. That rule took effect on 1 March 2026 for non-financed transfers of residential property to entities and trusts, and was then vacated by a federal district court order on 19 March 2026, which FinCEN is appealing. FinCEN's own guidance states that reports are not required while that order stands. Because this is actively moving, confirm the position on FinCEN's residential real estate FAQ page at the time of your closing rather than relying on any secondary source.
Financing as a non-resident
Non-resident financing exists but is a specialist product. Expect:
- Down payments commonly in the 30 to 40 per cent range, sometimes higher
- Documentation of foreign income, often with certified translations
- Foreign national and ITIN loan programmes, or debt-service-coverage products for investment purchases
- Longer timelines than cash offers, which weakens you in competitive situations
- Building-level constraints in co-ops that can make the loan irrelevant
Many international buyers close in cash and refinance afterwards. See our guide to foreign national, DSCR and ITIN loans for US property for the lending side in detail.
Where the condos actually are
If you are limited to condos in practice, the map narrows:
- New development corridors: Hudson Yards, Long Island City, Downtown Brooklyn, the Financial District, Billionaires' Row
- Post-war and newer condo stock: parts of the Upper East Side and Upper West Side, Chelsea, Tribeca, Williamsburg
- Heavily co-op: classic pre-war Upper East Side and Upper West Side, Greenwich Village, Park Slope, Jackson Heights, Forest Hills, most of the outer-borough garden apartment stock
The trade-off is consistent across the city: co-ops offer more space and lower prices per square foot in exchange for approval risk and restricted use; condos offer flexibility and liquidity at a premium.
Frequently asked questions
Can foreigners buy property in New York?
Yes. There is no citizenship or residency requirement to own US real estate. Ownership does not grant any immigration status.
Can a co-op board reject me because I am not American?
A board may decline an application without giving reasons, but it cannot lawfully discriminate on protected grounds, which include national origin under federal, state and city fair housing law. The practical barrier is documentary: US tax returns, US credit history and US-based liquidity are standard requirements that many non-residents cannot satisfy.
Do I need a US bank account?
Not strictly to buy, but in practice yes. Closing funds, maintenance or common charges, utilities and tax payments are far easier from a US account, and some sellers and managing agents insist on it.
Do I pay extra tax as a foreign buyer?
Not at purchase. New York applies the same transfer and mansion taxes to everyone. Differences appear on the income and exit side: withholding on rents, FIRPTA on sale, and materially different estate tax exposure.
Should I buy through an LLC?
It depends on your home country, your estate planning and whether the building allows it. Entity ownership can help with estate tax exposure but adds filing obligations and cost, and most co-ops prohibit it. Take cross-border tax advice before you sign a contract, not after.
How long does a purchase take?
For a condo paying cash, roughly 30 to 60 days. For a co-op, add four to eight weeks for the board package and interview, and accept that the timeline is outside your control.
Keep reading on JanusHermes
The co-op versus condo split decides your building options, your financing, your structure and your exit, so settle it before you start viewing. JanusHermes lists property from local agencies in 11 languages, with the local agency's own contact details on every listing.
For the national picture, see the foreign buyer's guide to US real estate and buying property in Florida. On the tax side, read the US non-resident estate tax trap and FIRPTA for foreign sellers. On financing, see foreign national, DSCR and ITIN loans. For a sibling city guide, read buying an apartment in Paris.
This article is general information and not legal, tax or investment advice. US federal, New York State and New York City rules, rates and reporting obligations change, and several of the reporting rules described here are the subject of ongoing litigation. Individual outcomes depend on your citizenship, domicile, treaty position and the specific building's governing documents. Engage a New York real estate attorney and a cross-border tax adviser before making an offer. JanusHermes accepts no liability for actions taken based on this content.
Primary sources: The New York State additional transfer tax (mansion tax) tiers and the New York City Real Property Transfer Tax schedule; the New York State Real Estate Transfer Tax including the additional rate on residential sales of 3 million dollars and above; the FIRPTA withholding provisions of the US Internal Revenue Code; the federal estate tax rules for non-resident aliens with the 60,000 dollar exemption; FinCEN's Residential Real Estate Rule, 31 CFR 1031.320, effective 1 March 2026 and vacated by federal district court order of 19 March 2026, on appeal; and federal, New York State and New York City fair housing law.
