Comprehensive legal guide covering eligibility, state restrictions, tax implications, fair housing compliance, and immigration connections for international property buyers
$56BForeign Investment (2024-25)
28-30States with Restrictions
15%Max FIRPTA Withholding
$800KMin EB-5 Investment
🌍 Can You Own U.S. Property?
Quick Answer: Yes, but the legal landscape has shifted dramatically since 2020. No federal prohibition exists, but 28-30 states now restrict foreign ownership—especially for nationals from "countries of concern."
Quick Eligibility Assessment
Answer these questions to identify potential restrictions:
1. What state are you purchasing in?
2. Your nationality:
3. Property type:
🇺🇸
Federal Level
No blanket prohibition on foreign ownership. No citizenship, green card, or visa required for purchase.
🏛️
State Level
Patchwork of restrictions across 28-30 states, varying by location and nationality.
⚔️
"Countries of Concern"
Many states restrict ownership by nationals from China, Russia, Iran, North Korea, Cuba, Syria, Venezuela.
⚠️ Critical Action Item
Before making an offer, verify whether the state has foreign ownership restrictions and whether your nationality or entity structure would be affected. This is separate from immigration status—you may be legally present in the U.S. but still barred from purchasing property.
States with Foreign Ownership Restrictions (2025)
Florida (SB 264)TexasArkansasLouisianaMississippiAlabamaTennesseeOklahomaMontanaNorth DakotaSouth Dakota+ 17 More States
List continues to expand through state legislative sessions
What's Typically Restricted
Agricultural land and farmland (most common restriction)
Property within specified distances of military installations or critical infrastructure
In some states (like Florida), all real property for certain foreign persons
Ownership by foreign government-controlled entities
CFIUS: Federal Scrutiny Near Sensitive Locations
The Committee on Foreign Investment in the United States (CFIUS) reviews foreign purchases near sensitive facilities under 31 C.F.R. Part 802.
December 2024 Expansion
A final rule effective December 9, 2024, expanded CFIUS jurisdiction to cover more installations. Check the Treasury's Part 802 Geographic Reference Tool before purchasing near military bases, ports, airports, or government installations.
Farmland Ownership: Federal Reporting
📋
Mandatory USDA reporting within 90 days of farmland acquisition
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Heightened state scrutiny - many states specifically restrict foreign farmland ownership
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Potential future restrictions as Congress considers Farmland Security Act
✓
Residential/commercial/urban property that is not farmland generally exempt from AFIDA
🏢 Individual vs. Entity Ownership
Foreign buyers face a critical choice: purchase in personal name or through an LLC/corporation. Each has distinct advantages and disadvantages.
Factor
Individual Ownership
LLC/Corporation
Privacy
Your name appears on public records
Entity name appears (but BOI reporting applies)
Liability Protection
Personal assets exposed to lawsuits
Limited liability shield if properly maintained
Tax Implications
Direct 1040-NR filing; may qualify for capital gains exclusion
Pass-through or corporate taxation; more complex reporting
Financing
Easier to obtain mortgages
More difficult; many lenders won't finance LLC purchases
Estate Planning
Subject to probate; may trigger estate tax
Can facilitate succession without probate
Compliance Burden
Minimal
Annual state filings, registered agent, BOI reporting
Corporate Transparency Act & BOI Reporting (2025)
Status Update
U.S. companies and persons: BOI reporting requirements removed by interim rule
Foreign reporting companies: Still subject to BOI filing with FinCEN
Foreign entities registered in U.S.: Must comply if registered to do business in any U.S. state
🇺🇸
U.S. Companies
BOI reporting requirements removed for U.S. companies and U.S. persons.
🌍
Foreign Companies
Still subject to BOI filing obligations with FinCEN. Deadlines keyed to March 26, 2025.
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Penalties
Civil penalties up to $500/day and criminal penalties including fines up to $10,000 and/or 2 years imprisonment.
Anti-Money Laundering & Transparency
1
GTOs (Through Feb 28, 2026)
Geographic Targeting Orders require title companies to report beneficial ownership for all-cash purchases above thresholds in designated metro areas.
2
RRE Rule (March 1, 2026)
Nationwide Residential Real Estate Rule replaces GTOs and covers all-cash entity purchases nationwide.
3
Enhanced Due Diligence
Title companies collect detailed beneficial ownership info, government ID, proof of address, source of funds documentation.
💰 Tax Obligations for Foreign Owners
FIRPTA Withholding Calculator
Estimate the withholding tax when you sell your U.S. property
Making the net rental income election by providing Form W-8ECI to your property manager typically saves significant tax compared to 30% gross withholding. This election is almost always the better choice—consult with a tax professional to confirm.
FIRPTA: Tax on Sale of Property
Sales Price
Buyer's Residential Use?
Withholding Rate
≤ $300,000
Yes (50% use for 24 months)
0% (exempt)
$300,001 - $1,000,000
Yes (50% use for 24 months)
10%
> $1,000,000
Any use
15%
≤ $1,000,000
No residential use by buyer
15%
Important: Withholding is Not Final Tax
FIRPTA withholding is an estimated deposit. You file Form 1040-NR reporting actual capital gain, pay additional tax if owed, and claim refund if you overpaid. The buyer withholds and remits to IRS within 20 days of closing.
Estate Tax Exposure
Critical for High-Net-Worth Buyers
Non-U.S. citizens who are not U.S. residents face federal estate tax on U.S. real property with only a $60,000 exemption (compared to $13.99 million for U.S. citizens in 2025). Estate planning strategies are essential before purchasing.
Irrevocable trusts can remove property from taxable estate
Limited partnerships or LLCs may provide valuation discounts
Life insurance can provide liquidity to pay estate taxes
Consult estate planning attorney specializing in cross-border estates BEFORE purchasing
ITIN Requirement
1
Complete Form W-7
Application for IRS Individual Taxpayer Identification Number with original documents or certified copies.
2
Choose Submission Method
Submit with U.S. tax return, process through IRS-authorized Certifying Acceptance Agent, or appear in person at IRS offices/U.S. embassies.
3
Wait for Processing
Processing typically takes 7-11 weeks. Apply well before closing if you need ITIN for financing.
🏘️ Fair Housing Compliance for Foreign Landlords
⚠️ Critical Warning for Foreign Landlords
In some cultures, landlords asking personal questions or showing personal interest in tenants may be considered normal or friendly. In the United States, this behavior creates severe legal liability. Maintain strictly professional, business-only interactions with all tenants and applicants.
Federal Fair Housing Act: Protected Classes
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Race & Color
Discrimination based on race or skin color strictly prohibited
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National Origin
Cannot discriminate based on country of origin, ancestry, or accent
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Religion
Religious beliefs and practices are protected
⚧️
Sex
Includes sexual orientation and gender identity
♿
Disability
Physical and mental disabilities protected
👨👩👧👦
Familial Status
Presence of children under 18, pregnancy, custody of minors
State & Local Additional Protections
Many jurisdictions add protected classes beyond federal law:
Source of income (Section 8 vouchers, disability benefits)
Marital status (protected in many cities)
Military or veteran status
Age (beyond confirming 18+)
Sexual orientation and gender identity (explicit in many states)
Tenant Screening: What You Can and Cannot Ask
Category
✅ ACCEPTABLE
❌ PROHIBITED
Financial
Income verification, credit check, employment history, bank statements
N/A - financial qualifications generally acceptable
Rental History
Prior addresses, landlord references, eviction history
N/A - rental history generally acceptable
Occupancy
Number of occupants, names and ages for occupancy standards
"Do you have children?" "Are you pregnant?" "Plan to have kids?"
Personal
Pet ownership (if pet policies), smoking status, vehicle info
"Are you married?" "What's your religion?" "Where were you born?" "How old are you?"
Violations can result in daily fines and forced closure
🛂 Immigration Connections
Real Estate Purchase ≠ Immigration Benefit
Simply buying residential property does NOT:
Grant you any visa or immigration status
Provide pathway to green card
Give you right to live or work in the United States
Count toward EB-5 or other investor visa requirements
EB-5 Immigrant Investor Program
The EB-5 program allows foreign investors to obtain green cards by making qualified investments in U.S. commercial enterprises that create jobs.
Investment Type
Amount Required (2025)
Job Creation
Targeted Employment Area (TEA)
$800,000
10 full-time U.S. jobs
Standard Investment (Non-TEA)
$1,050,000
10 full-time U.S. jobs
Rural/High Unemployment/Infrastructure
$800,000
10 full-time U.S. jobs
EB-5 Key Requirements
🏢
New Commercial Enterprise
Must invest in business (not personal real estate). Typically structured through Regional Centers.
👷
Job Creation
Must create or preserve 10 full-time jobs for U.S. workers within required timeframe.
⚠️
At-Risk Investment
Investment must be "at risk" with no guaranteed returns or buyback arrangements.
Real Estate & EB-5
Does NOT qualify: Buying a house, condo, or rental property for passive investment
CAN qualify: Large-scale real estate development projects (hotels, apartment buildings, commercial developments) structured through Regional Centers if they meet job creation thresholds
Recommendation
If immigration is a primary goal, consult with an immigration attorney before purchasing property. Real estate investments can be part of a broader strategy, but cannot substitute for proper EB-5 or other visa programs.
✅ Compliance Checklists
Before You Purchase
Compliance Item
What to Check
Resources
State Foreign Ownership Laws
Does state restrict foreign ownership? Does your nationality fall under "country of concern"?
State attorney general, local real estate attorney
CFIUS Jurisdiction
Is property near military installations, ports, critical infrastructure?
Treasury.gov Part 802 Geographic Tool
Entity Structure
LLC vs. personal ownership—tax implications in U.S. and home country
U.S. tax attorney + home country tax advisor
BOI Reporting
If using entity, does it qualify as foreign reporting company?
FinCEN.gov/BOI
ITIN Application
If financing or will have rental income, obtain ITIN before closing
IRS Form W-7
Title Insurance
Confirm title company handles FIRPTA withholding and FinCEN reporting
Title company, closing attorney
Financing
Foreign national mortgage requirements, down payment, documentation
Lenders specializing in foreign national loans
Estate Planning
U.S. estate tax exposure ($60K exemption for non-residents)
Cross-border estate planning attorney
Before You Rent the Property
Compliance Item
What to Check
Resources
Fair Housing Laws
Federal + state + local protected classes and requirements
HUD.gov, state civil rights commission
Rental Application
Legal review of application and screening criteria
Yes. You'll need an ITIN (Individual Taxpayer Identification Number) instead. Apply using IRS Form W-7 before applying for a mortgage. Expect to provide extensive documentation of foreign income and assets, make a larger down payment (typically 30-40%), and pay higher interest rates than U.S. citizens or permanent residents.
No. An LLC provides limited liability protection, but you can still be held personally liable for: (1) your own negligent or wrongful acts, (2) personally guaranteed loans, (3) failure to maintain LLC properly ("piercing the corporate veil"), and (4) certain other circumstances. Proper insurance is equally important.
Usually yes, but requirements vary by country. Many countries tax worldwide income, including U.S. rental income and capital gains from property sales. Some countries also require disclosure of foreign assets. You may be entitled to foreign tax credits for U.S. taxes paid. Consult a tax advisor in your home country before purchasing.
Generally no. Most cities regulate short-term rentals and require registration, licensing, or permits. Requirements vary: some cities ban STRs entirely, some allow only in certain zones, some require owner on-site, some impose caps on rental days per year. You must also collect and remit transient occupancy taxes. Failure to comply can result in daily fines and forced shutdown.
Both buyer and seller can be held liable. If you're the seller and a foreign person, you're ultimately responsible for tax on capital gain. If buyer fails to withhold, IRS can pursue buyer for unpaid withholding tax plus penalties and interest. This is why buyers typically insist on compliance and title companies routinely handle FIRPTA withholding at closing. If you qualify for exemption or reduced withholding, apply for withholding certificate using Form 8288-B well before closing (90+ days processing).
No, this would constitute national origin discrimination under the Fair Housing Act. You can require that tenants be able to communicate sufficiently to understand lease terms, and you may use a professional interpreter, but you cannot refuse to rent based on English proficiency or accent. Communication challenges can be addressed through written translations, interpreters, or bilingual property managers—but not by excluding applicants.
Potentially, but legally and practically risky. Many state laws include anti-circumvention provisions prohibiting use of intermediaries or straw purchasers to evade foreign ownership restrictions. If authorities determine a U.S. citizen is holding property on behalf of a prohibited foreign person, the transaction may be unwound, penalties imposed, and property potentially forfeited. Consult with a real estate attorney licensed in that state to explore legitimate alternatives.
Not absolutely required but highly recommended. Most title companies prefer to receive funds from U.S. bank accounts to facilitate closing. International wire transfers for large sums can trigger delays, enhanced scrutiny, and additional documentation requirements. Opening a U.S. bank account as foreign national requires: passport, proof of foreign address, ITIN or foreign tax ID, and potentially a U.S. address (even if temporary). Some banks are more accommodating than others.
Yes, heirs can inherit your U.S. property, but the estate may face U.S. estate tax. For non-U.S. citizens who are not U.S. residents, federal estate tax exemption is only $60,000 (compared to $13.99 million for U.S. citizens in 2025). This means most valuable properties will trigger significant estate tax liability. Estate planning strategies such as irrevocable trusts, limited partnerships, or life insurance can help mitigate exposure. Consult estate planning attorney specializing in cross-border estates BEFORE purchasing.
The most practical solution is hiring a licensed property manager in the property's location. Good property managers handle: tenant screening and placement, rent collection, maintenance and repairs, lease enforcement, evictions if necessary, and compliance with local landlord-tenant law. Management fees typically range from 8-12% of monthly rent. This is often essential for foreign owners because effective property management requires local knowledge, rapid response to issues, and understanding of state-specific legal requirements.