USA Real Estate Purchase: Guide for Foreigners

Published on April 27, 2026 and written by Cyril Jarnias

Purchasing real estate in the United States represents an attractive opportunity for many foreign investors. Whether to diversify assets, generate rental income, or simply own a second home across the Atlantic, the U.S. real estate market offers numerous possibilities. However, the acquisition process can seem complex for non-residents. This article will guide you through the key steps, specific regulations, and essential tax considerations to carry out your U.S. real estate project with peace of mind.

Welcome to the American Dream: Open Doors for Foreign Investors

Contrary to some misconceptions, the United States welcomes foreign investors in the real estate sector. The federal government imposes no specific restrictions on non-residents wishing to acquire property on U.S. soil. This openness makes the USA a sought-after destination for international real estate investment.

According to the National Association of Realtors, foreign buyers invested $53 billion in U.S. residential real estate between April 2022 and March 2023. While this figure represents a decline from previous years, mainly due to pandemic-related travel restrictions, it nonetheless reflects the enduring appeal of the U.S. market for international investors.

The most popular states for foreign investment are Florida, California, Texas, Arizona, and New York. These regions offer an attractive mix of economic dynamism, quality of life, and long-term appreciation potential.

Navigating U.S. Regulations: What You Need to Know

While the federal government does not impose major restrictions, it is crucial to understand the specific regulations that apply to foreign buyers:

The Purchase Process: A Matter of Speed and Efficiency

In the United States, the real estate purchase process is generally faster than in Europe. Once an offer is accepted, the transaction can be finalized in 30 days or less. This efficiency is made possible by several key players:

• The real estate agent: Each party (buyer and seller) works with their own agent, who acts as a coach throughout the process.
• The Title Company: It replaces the French notary and handles the legal and financial aspects of the transaction.
• The mortgage lender: If you opt for local financing, your file will be thoroughly reviewed.

Sectoral Restrictions: A Few Sensitive Areas

Although the purchase of residential properties is largely open, certain sectors considered strategic are subject to restrictions:

• Maritime transport
• Aeronautics
• Banking
• Energy
• Communications and media
• Public markets

In these areas, foreign investments may be subject to closer scrutiny by the Committee on Foreign Investment in the United States (CFIUS).

Choosing the Acquisition Structure

How you structure your purchase can have significant implications, particularly in terms of taxes. Common options include:

• Direct purchase as an individual
• Creating a U.S. LLC (Limited Liability Company)
• Using a foreign corporation

Each structure has advantages and disadvantages in terms of liability, taxation, and management. It is crucial to consult a tax and legal expert to determine the best option for your personal situation.

U.S. Taxation for Foreign Investors: A Terrain to Explore with Caution

Taxation is often the most complex aspect of investing in real estate abroad. In the United States, several elements need to be considered:

Tax on Rental Income

If you rent out your property, the income generated will be taxable in the United States. The tax rate depends on your personal situation and the amount of income, but it can go up to 37% for the highest brackets. It is important to note that this income must also be declared in your country of residence, although tax treaties generally exist to avoid double taxation.

The FIRPTA Tax Upon Sale

The Foreign Investment in Real Property Tax Act (FIRPTA) imposes a 15% withholding tax on the sale price when a foreigner sells real estate in the United States. This withholding serves as a down payment on any capital gains tax due. It is possible to recover part or all of this amount if the actual tax owed is lower.

Capital Gains Tax

Capital gains realized from the sale of real estate are taxed in the United States. The rate varies depending on the holding period of the property and your tax situation, but it can reach 20% for long-term capital gains.

Local Taxes

Each property is subject to property taxes, equivalent to French property taxes. These taxes vary considerably by state, county, and even city, potentially reaching up to 2% of the property’s value per year in some localities.

The Franco-American Tax Treaty

For French investors, the tax treaty between France and the United States helps avoid double taxation. Taxes paid in the USA on rental income or capital gains can generally be deducted from the French tax due on that same income.

Essential Documents: Prepare Your File

To successfully carry out your real estate purchase project in the United States, you will need to gather several essential documents:

Identification and Visa

• Valid passport
• Valid visa (if applicable) – while not mandatory for the purchase, it can facilitate certain procedures

Financial Documents

• Bank statements from the last 3 to 6 months
• Proof of income (pay stubs, tax returns)
• Employer verification letter (for employees)
• Balance sheet and income statement (for entrepreneurs)

Documents Specific to Real Estate Purchase

• Proof of funds for the purchase (bank statement showing availability of the required amount)
• Pre-approval letter for a loan (if you plan to finance)
• ITIN (Individual Taxpayer Identification Number) – a tax identification number for non-residents, necessary for various administrative procedures

The Importance of the ITIN

The ITIN is particularly crucial for foreign buyers. This number is needed to:

• File U.S. tax returns
• Open a bank account in the United States
• Facilitate real estate transactions

To obtain an ITIN, you will need to submit Form W-7 to the IRS (Internal Revenue Service), along with supporting documents proving your identity.

Financing: Options Tailored to Foreign Buyers

While cash purchases are common among foreign investors, it is entirely possible to obtain financing for your real estate acquisition in the United States.

Specifics of Mortgages for Non-Residents

• Higher down payment: Banks generally require a 30% to 50% down payment for foreign buyers, compared to 20% for U.S. residents.
• Slightly higher interest rates: Expect about 0.5% more than the rates offered to residents.
• Shorter loan terms: Loans are often limited to 15-20 years for non-residents.

Banks Offering Loans to Foreigners

Some financial institutions have specialized in loans to foreign buyers:

• International banks: HSBC, for example, offers loans to non-residents regardless of their visa status.
• Private banks: JP Morgan and Citi Private offer financing solutions for their international clientele.
• Specialized lenders: Some institutions focus specifically on loans to foreign buyers.

Documents Needed to Obtain a Loan

In addition to standard documents, lenders will generally require:

• Proof of stable and sufficient income in your home country
• International banking references
• A detailed explanation of the source of funds for the down payment
• International life insurance (in some cases)

Pitfalls to Avoid: Navigating Safe Waters

Investing in real estate abroad always carries some risks. Here are a few points of vigilance to secure your purchase in the United States:

Due Diligence: A Crucial Step

Do not underestimate the importance of thorough due diligence. This involves:

• A detailed inspection of the property by a certified professional
• A careful verification of the property title to ensure there are no disputes or hidden liens
• A review of local regulations and potential restrictions (zoning, HOA rules, etc.)

Hidden Costs

Beyond the purchase price, be mindful of additional costs:

• Closing costs, which can represent 2% to 5% of the purchase price
• Annual property taxes, which vary considerably by location
• Maintenance and management fees, especially important if you are not on site

Remote Management

If you do not plan to live in your property, think carefully about how you will manage it:

• Consider hiring a local property manager
• Budget for repairs and regular maintenance
• Make sure you have appropriate insurance, covering periods of vacancy in particular

Market and Exchange Rate Fluctuations

The U.S. real estate market can experience significant variations depending on the region and time period. Additionally, as a foreign investor, you must be aware of the risks associated with fluctuations in the exchange rate between your local currency and the U.S. dollar.

Conclusion: Your American Real Estate Project Within Reach

Purchasing real estate in the United States represents an exciting opportunity for foreign investors. With an open market, efficient purchase procedures, and attractive return potential, the USA remains a top destination for diversifying your real estate portfolio.

However, the success of such a project requires careful preparation. From understanding local regulations to navigating the intricacies of U.S. taxation, from choosing the right acquisition structure to securing financing, each step requires special attention.

By surrounding yourself with the right professionals – an experienced real estate agent, a specialized attorney, a tax advisor – and taking the time to understand the specifics of the U.S. market, you will maximize your chances of realizing your real estate dream across the Atlantic.