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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 is facilitate the 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 your specific needs,contact us directly by email or call (646)644-6929.
Can Foreign Nationals buy a NYC condo without having Social Security Number or US residency?
Yes, they can legally, but have to meet the NYC Condo 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?
In order for a Foreigner to buy NYC condo, 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 for NYC condos: (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 (CONTACT US) 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).