General Info Only: This tool gives general info and estimates only. It is not tax, legal, or money advice. US tax laws are complex and vary by state.
Talk to Experts: Before you decide, consult with:
- A CPA or tax agent who knows US expat and non-resident taxes
- A real estate lawyer who knows cross-border deals
- The IRS for current rules
FIRPTA Withholding
FIRPTA (Foreign Investment in Real Property Tax Act) requires buyers to hold back 15% of the sale price when buying US property from a foreign person. The rate drops to 10% if the buyer will live there and the price is under $1M. This amount held back is a tax payment, not the final tax owed.
Rental Income Taxation
Before buying US rental property, see our rental property analysis guide. It helps you learn returns, costs, and market choices. Non-residents have two tax options:
- 30% Flat Tax: Simple rate on gross rent with no write-offs allowed
- Net Income Choice: File a tax return and pay tax on net income (gross rent minus costs) at tiered rates. This choice often results in lower tax.
State Taxes
State tax rates and rules vary a lot. Some states (FL, TX, WA, NV) have no income tax. Others (CA, NY) have high rates over 10%. Always check current state tax rules. If you want to rent instead of buy in a high-tax state, our rent vs buy tool can help you compare. Use our repayment calculator to estimate mortgage costs. For those looking for rentals, check our apartment hunting tips to find the right place.