The Foreign Buyer's Guide to Manhattan Real Estate

Updated May 2026 by Corey Cohen, Roebling Team

TL;DR

If you're a non-U.S. buyer purchasing a Manhattan apartment, three rules cover 90% of the decision:

1. Buy a condo, not a co-op. Most Manhattan co-ops will reject you. Condos almost universally accept foreign buyers with a clean financial package.

2. 2. Structure the purchase carefully. The choice between buying in your personal name, an LLC, or a trust has significant implications for U.S. tax exposure — especially U.S. estate tax, which can take up to 40% of the property's value if you die owning it directly.

3. 3. Plan for the tax footprint before you offer, not after closing. Property tax, mansion tax, FIRPTA on eventual sale, and ongoing income tax (if you rent the apartment) all need to be modeled into the deal economics. Most buyers and many brokers underestimate them.

This guide walks through the practical realities — financing, banking, documentation, structuring, and the common pitfalls — that I've seen play out across foreign buyer transactions in Manhattan.

Why foreign buyers should default to condos

Manhattan is roughly 75% co-ops and 25% condos. Foreign buyers should generally restrict their search to that 25%.

The reason is straightforward: co-op boards retain the right to reject any prospective buyer, and most Manhattan co-op boards will reject (or strongly discourage) foreign buyers. The reasons cited are usually some mix of:

• "We can't verify income or assets in your home country with the same documentation we'd accept from a U.S. resident."

• - "If you default on maintenance, we have limited legal recourse against assets held abroad."

• - "We require physical occupancy, and we're skeptical about pied-à-terre use."

Some co-ops will accept foreign buyers in specific structures — for example, with 24+ months of maintenance held in escrow, or with a U.S.-resident guarantor, or only if the buyer has a long verifiable U.S. financial history. These cases exist but are not the norm.

Condos are different. A condo is real property — when you buy a condo, you receive a deed in your name (or your LLC's name) just like any other piece of real estate. The condo board has a "right of first refusal" to match any sale price and buy the unit themselves at that price, but in practice they almost never exercise this. Condos do not interview, do not approve, and do not reject foreign buyers in any meaningful sense.

For most foreign buyers, this is dispositive: shop condos. The exception is the rare buyer with a long-established U.S. footprint (citizenship test passed, U.S. employment income, U.S. credit history) who genuinely wants a co-op for its lower price point and can find an open-minded board. For most readers of this guide, that exception doesn't apply.

The three structuring options

How you take title matters more than most foreign buyers realize. The three options:

Personal name (individual ownership)

The simplest structure. You buy the apartment, the deed shows your name, and you pay U.S. taxes the same way you would if you held any other U.S. real estate.

Pros: Cheapest to set up. No annual entity maintenance.

Cons: Massive U.S. estate tax exposure. This is the part most buyers don't realize until it's too late. If you, as a non-U.S. domiciliary, die owning U.S. real estate directly, your estate is subject to U.S. estate tax of up to 40% of the property's value over a $60,000 exemption. That's not a typo — sixty thousand dollars. (U.S. citizens and U.S. domiciliaries get a $13M+ exemption. Non-U.S. domiciliaries get $60K.) On a $3M apartment, that's potentially $1M+ owed to the IRS by your heirs.

Best for: Short-hold purchases, very young buyers with negligible mortality concern, or buyers from treaty countries (Australia, Canada, Denmark, France, Germany, Italy, Japan, the Netherlands, South Africa, Switzerland, the U.K., among others) who get larger exemptions under bilateral estate tax treaties. Always verify with a qualified cross-border tax attorney, not a real-estate broker (including me).

Single-member LLC (Limited Liability Company)

You form a Delaware or New York LLC, and the LLC takes title to the property. You own the LLC.

Pros: Estate planning flexibility. Some buyers further hold the LLC through a foreign corporation or foreign trust, which (in some structures) shields the U.S. real estate from direct U.S. estate tax. Liability protection if the apartment is rented out and a tenant sues. Privacy in public records (the deed shows the LLC's name, not yours).

Cons: Annual entity maintenance and filing requirements. Some condo buildings have residency restrictions in their bylaws that limit or prohibit ownership by entities — read the bylaws before assuming this works. Cost: roughly $500–$2,000 to set up depending on attorney rates, and a few hundred per year to maintain.

Best for: Most non-treaty foreign buyers. The estate tax savings vastly outweigh the setup cost.

Foreign corporation or trust (more sophisticated structures)

For larger purchases or buyers with complex international tax situations, more sophisticated structures involve a foreign corporation owning the U.S. LLC, or a discretionary trust holding the LLC. These can fully shield the U.S. real estate from U.S. estate tax exposure but introduce other complications (e.g., higher U.S. income tax rates on rental income from a foreign-corporation-owned property).

Best for: Purchases above $5M, multi-property portfolios, or buyers whose home-country tax counsel recommends specific structures. These are not DIY decisions.

The right answer is structure-dependent. Get advice from a U.S. tax attorney who specializes in inbound international real estate. Expect to pay $2,000–$5,000 for a proper consultation. On a $2M+ purchase, this is the highest-ROI legal fee you will pay.

Financing realities

Most foreign buyers either pay all-cash or finance with a U.S. mortgage at "foreign national" terms. The realities:

All-cash is most common. Roughly 60–70% of Manhattan foreign-buyer transactions are cash. It removes financing contingency from the offer and accelerates closing.

Foreign national mortgages exist but with strings attached.

• Down payment requirements are typically 30–40%, sometimes higher.

• - Interest rates run 0.5%–1.5% above the U.S. resident rate at the same loan size.

• - Lenders will require 12–24 months of post-closing reserves in a U.S. or U.S.-recognized account.

• - The loan process takes 60–90 days vs. 30–45 for resident borrowers, so expect longer contracts to close.

• - A few specialized lenders dominate this space (HSBC, Citi Private Bank, Bank of China, Republic Bank). Compass, Roebling Team, and other experienced agents can refer you.

You may not get the most attractive rate unless you have a meaningful U.S. financial history. Many foreign buyers establish a U.S. bank relationship a year before buying for exactly this reason.

The U.S. tax footprint

What the U.S. government takes from foreign buyers, in roughly chronological order:

At purchase

• Mansion tax: 1.0% to 3.9% of the purchase price for residential properties at $1M and above. Same as for U.S. buyers.

• - Mortgage recording tax (if financing): 1.925% on condo loans above $500K. Buyer paid.

• - Title insurance: ~0.4–0.5% of the purchase price.

Annually while you own

• Property tax: paid as a separate line item (in condos) or bundled into common charges (in co-ops). For Manhattan condos, expect 1.0–1.5% of purchase price annually after any 421-a abatement expires.

• - Common charges: condo monthly fees. Set by the building.

• - U.S. income tax (if you rent the apartment out): this is a real surprise for many foreign buyers. Rental income on U.S. property is taxed at 30% gross by default for non-residents — yes, on the gross, not net. There is an election (Section 871(d)) that lets you be taxed on net income at graduated rates instead, which is almost always better, but it requires filing. Always make this election if you'll be receiving rental income.

• - Property-specific costs: utilities, insurance, repairs.

When you sell

• FIRPTA withholding: 15% of the gross sale price withheld at closing and remitted to the IRS as a credit toward your eventual U.S. tax liability. There are exceptions (purchase below $300K with buyer-occupancy intent) and reduced rates available with a Withholding Certificate, but the default is 15% of gross sale price withheld up front. This can be significant on a $3M sale: $450K withheld until you file your final U.S. tax return and reconcile.

• - Capital gains tax: long-term U.S. federal capital gains rate (currently 20%) plus NY state and city capital gains tax (~10% combined). On the gain, not the gross sale price.

• - NYC and NY transfer taxes: typically seller-paid. Same rates as for U.S. sellers.

A foreign buyer holding a $3M condo for 5 years, selling for $3.6M (with an LLC structured properly), might net only $250–$300K of "profit" after all U.S. tax and transaction costs. This needs to be modeled at the time of purchase, not discovered at sale.

Banking and money movement

Three operational realities most foreign buyers confront:

Open a U.S. bank account before you start shopping. It dramatically smooths every step. Without one, every contract milestone (10% earnest money, closing wire) becomes a friction point. HSBC, Citi, JPMorgan Private Bank, and a handful of others will open accounts for non-residents with a passport, proof of address, and (sometimes) a meeting in person. Plan for this 2–4 months before you need it.

Compliance scrutiny is real. Wire transfers above certain thresholds trigger anti-money-laundering checks. Be prepared to document the source of funds: which account did the money come from, which property/business/inheritance generated it, what's the chain of custody. This is not optional; it's the law. Have your home-country bank prepare a "source of funds letter" if the dollar amount is large.

Currency timing matters. A 5% adverse currency move between offer signing and closing can erase your negotiation gains. Some buyers use forward contracts to lock in the exchange rate; others wire dollars early into a U.S. account to avoid the risk. Talk to your home-country bank about hedging options before you make an offer.

Documentation a foreign buyer should have ready

Before you submit an offer on any Manhattan property:

• Passport (and a U.S. visa, if you have one)

• - Proof of address in your home country (utility bill, bank statement)

• - Reference letter from your home-country bank, stating account standing and approximate balances

• - Tax returns or income documentation from your home country (last 2 years)

• - Source-of-funds letter for the down payment (or full purchase, if cash)

• - U.S. tax ID number (ITIN) — apply for this through Form W-7. Takes 6–10 weeks. Start early.

• - Engagement letter from a U.S. tax attorney for the structuring work, if not already in place

• - A New York real estate attorney with cross-border experience

Without these in hand, a contract can stall for weeks.

The "approval pool" — which condos are most foreign-buyer friendly

Not all condos are equally welcoming. Some practical observations from recent transactions:

New developments / sponsor units: very foreign-buyer friendly. Sponsors want to sell, and the pricing process is straightforward.

Mid-2000s and 2010s condos in Tribeca, West Chelsea, the West Village, the Upper East Side: typically welcoming to foreign buyers, often with significant existing foreign ownership in the building.

Older condos (less common in Manhattan; most pre-1990 buildings are co-ops): generally fine but may have unusual bylaws — read them.

Some condos with strong residency-focused communities may have informal preferences, even if their bylaws permit foreign ownership. Your broker should know which buildings these are. Don't waste time on buildings where the implicit signal is "we'd rather have someone who actually lives here."

Common pitfalls

Things I have seen go wrong, in roughly decreasing order of how often they happen:

1. Buying in personal name without considering estate tax. The buyer is happy. Five years later they pass away, and their heirs face a 40% estate tax bill that erases most of the property's value.

2. 2. Not making the Section 871(d) net-rental election and getting taxed at 30% on gross rental income for years.

3. 3. Underestimating FIRPTA withholding at sale and having a cash crunch when 15% of the gross sale price is withheld.

4. 4. Hiring a generalist real-estate attorney who doesn't catch a land lease, an unusual title issue, or a structuring problem. Always use a Manhattan-specialist with cross-border experience.

5. 5. Not factoring in 421-a expiration on a condo with a tax abatement, then being surprised when monthly carrying cost jumps 30% in year 11.

6. 6. Trying to buy a co-op because the price-per-square-foot is lower, getting rejected, and burning 90 days of search time.

7. 7. Assuming your home-country financial documents are sufficient to satisfy condo financial review or lender underwriting. Often they need translation, apostille certification, or U.S.-bank-verified summaries.

A worked example

A buyer in Singapore wants a Manhattan pied-à-terre at $2.8M. Three structures, projected over a 7-year hold:

Structure A: personal name, all cash.

• Closing costs: ~$95K (mansion tax 1.25% = $35K, attorney/title/misc = $60K)

• - Annual property tax + common charges: ~$60K/year = $420K over 7 years

• - Estate tax exposure: ~$1.1M if buyer dies with property

• - FIRPTA at sale: 15% of $3.4M = $510K withheld upfront, recovered after final tax filing

• - Net gain on $600K appreciation: ~$200K after federal + NY capital gains

Structure B: U.S. LLC, owned through a foreign holding company.

• Setup: ~$5K U.S. attorney + ~$3K home-country counsel

• - Annual entity maintenance: ~$1.5K

• - Closing costs: similar to A

• - Estate tax exposure: dramatically reduced, often near zero with proper structure

• - Other tax effects: rental income (if any) taxed differently; check with counsel

• - Net gain on $600K appreciation: ~$180K after entity costs and adjusted tax treatment

The structuring fee of $8K saves potentially $1M+ in estate exposure. This isn't optional planning. It's the entire economic case.

When you'll want a Manhattan-specialist real estate attorney

You will. For a foreign buyer, attorney selection is more important than broker selection (and I say that as a broker). The attorney should:

• Have closed at least 20 Manhattan transactions in the last year, with a meaningful share involving foreign buyers

• - Be comfortable with LLC formation and cross-border structuring (or work closely with someone who is)

• - Know the specific buildings' quirks (some attorneys have closed in dozens of buildings and recognize names instantly)

• - Charge a flat fee or capped hourly fee in the $3,500–$7,500 range for a standard $2–5M transaction

Don't use a generalist or a remote attorney for this. The cost of getting it wrong is much higher than the legal fee.

If you're a foreign buyer evaluating a Manhattan purchase and want a 30-minute conversation about structure, building suitability, and financing options, call or text 646.939.7375. The U.S. tax and structuring questions need to be answered by qualified counsel — but the building-and-deal conversation is where I add the most value, and it's worth having before you offer, not after.