Who pays which tax
New York State charges a real estate transfer tax of 0.4% of the price, and in New York City an extra 0.25% on residential sales of $3 million or more; these base taxes are normally the seller's. The buyer pays the mansion tax — 1% on residential sales of $1 million or more — and, in the city, a supplemental tax at an incremental rate of 0.25% to 2.9% on residential sales of $2 million or more (New York State Department of Taxation and Finance). Together, the buyer's share reaches 3.9% at the top (our addition of the two published rates). The city adds its own Real Property Transfer Tax: for residential property, 1% up to $500,000 and 1.425% above (NYC Department of Finance, RPTT).
Co-op or condominium
Much of Manhattan's apartment stock is co-operative: you buy shares in the corporation that owns the building rather than real property — New York's own tax forms treat a co-op sale as a transfer of shares. Co-op buildings set their own rules on who may buy and how; condominiums are generally more straightforward for foreign buyers. Ask for the building's purchase requirements before you bid.
What it costs to hold
City property tax is charged on assessed value, which for Class 2 buildings (most apartment buildings) is 45% of market value, and increases are capped — for smaller Class 2 buildings at 8% a year and 30% over five years. The 2026 tax rates are 19.843% for Class 1 and 12.439% for Class 2 (NYC Department of Finance, tax rates; assessed value).
Selling
When a foreign person sells US real property, the buyer must generally withhold 15% of the amount realised under FIRPTA. There is no withholding where the price is $300,000 or less and the buyer will live in the home, and 10% up to $1 million on the same condition (IRS, FIRPTA withholding). New York State also requires non-resident sellers to estimate and pay tax on the gain when the deed is recorded, using form IT-2663 (or IT-2664 for co-op shares) (NYS form IT-2663 instructions).
The federal layer
Estate tax is the trap foreign owners discover late: a non-resident alien's estate must file a US return if US-situated assets exceed $60,000, and US real estate counts (IRS). How the home is held — personally, through a company, through a trust — changes the answer and should be decided with a US adviser before you buy.
Two other federal points. Foreign-investment review (CFIUS) excludes the purchase of a single housing unit (US Treasury). And FinCEN's residential real estate reporting rule, due to start in December 2025, was vacated by a federal court on 19 March 2026; FinCEN has appealed, and reporting is not currently required (FinCEN).
Residency
Buying a home does not give a right to live in the United States. Immigrant investment is a separate programme, EB-5, with a minimum investment of $1,050,000, or $800,000 in a targeted employment area, for petitions filed since 15 March 2022 (USCIS, EB-5).
