Buying Real Estate in the USA: Complete Guide to the Process, Taxes, and Nuances (Florida and New York)
Buying real estate in the USA is a complex process involving legal, financial, and tax nuances. For foreign investors, key aspects include financing, taxation, and transaction formalities. In this article, we will cover all stages of buying property, focusing on Florida and New York, two of the most popular states for investment.
1. Can foreigners buy real estate in the USA?
There are no restrictions on foreign citizens buying real estate in the USA. However, there are important nuances:
✔ Non-residents can purchase both residential and commercial real estate.
✔ Financial transparency is crucial – proof of the legality of income will be required.
✔ If the property is intended for rental, income taxes must be considered.
✔ In some residential complexes, building board approval is required (especially in New York for Co-ops).
2. Choosing the type of property
Before purchasing, you need to decide on the type of housing:
Popular in New York:
- Condos (Condos) – can be rented out, sold without approval.
- Co-ops (Co-ops) – stricter rules, board approval is required.
- Townhouses (Townhouses) – private homes in the city.
Popular in Florida:
- Oceanfront Condos – popular with investors and vacationers.
- Single-Family Houses – affordable with fewer restrictions.
- Gated Communities – enhanced security and well-developed infrastructure.
3. Average Property Prices in New York and Florida
Prices depend on location, property type, and infrastructure.
| Property Type | New York (Manhattan) | Florida (Miami) |
|---|---|---|
| 1-Bedroom Apartment | $800,000 – $1,500,000 | $400,000 – $700,000 |
| 2-Bedroom Apartment | $1,500,000 – $3,000,000 | $700,000 – $1,500,000 |
| House (3 Bedrooms, 2 Bathrooms) | $2,500,000+ | $800,000 – $2,500,000 |
In Florida, housing is significantly cheaper than in New York, and taxes are also lower.
4. Main Taxes When Buying Real Estate
Buyers must consider both one-time taxes upon purchase and annual property taxes.
One-time Taxes and Fees
- Transfer Tax
- New York: from 1.425% to 2.625% of the purchase price.
- Florida: 0.7% – 1% (Stamp Duty).
- Notary and registration fees – approximately $2,000 – $5,000.
- Attorney fees – $2,500 – $5,000.
- Home Inspection – $500 – $1,500.
Annual Property Taxes
- New York: 0.9% – 1.8% of the property value.
- Florida: 0.8% – 2%, but no income tax for individuals.
Additionally, condominiums may charge monthly HOA fees (management company fees), ranging from $300 – $2,000 per month.
5. The Property Purchase Process
Step 1: Property Search
- Using online platforms (Zillow, Realtor, MLS).
- Hiring a professional realtor.
- In New York, it is important to consider Co-op or Condo community rules.
Step 2: Preliminary Offer (Offer & Contract Signing)
- An offer is made (Letter of Intent).
- A contract is signed with a deposit of 5-10%.
Step 3: Legal Due Diligence
- Title Search (Title Search).
- Check for debts and restrictions.
- Home inspection (Home Inspection).
Step 4: Closing the Deal
- The buyer pays the remaining amount.
- Final documents are signed.
- Ownership transfer and registration of the transaction.
6. Mortgage for Non-Residents
Foreigners can obtain a mortgage, but under stricter conditions:
✔ Down payment 30-50%.
✔ Interest rate 6-8% per year.
✔ Proof of income required.
✔ Large banks and private lenders are involved.
In Florida, mortgages are easier as the market is geared toward investors. In New York, additional Co-op community restrictions may apply.
7. Potential Challenges
🔹 Long approval process in New York (up to 2-3 months).
🔹 Rental restrictions in Co-op – the building committee can refuse without explanation.
🔹 High taxes on sale – especially if the property has been owned for less than 3 years.
🔹 Mandatory utility fees in condominiums.
In Florida, purchasing is easier and more tax-friendly, especially for investors and retirees.
8. How to Protect Yourself from Risks?
✅ Work with licensed realtors and attorneys.
✅ Verify property documents and history.
✅ Consider purchasing through an LLC (for asset protection).
✅ Consider all taxes and additional fees.
✅ Open an American bank account for convenient payments.
Conclusion
Buying real estate in the USA is a complex but rewarding process. New York offers prestigious properties, but with high taxes and approval challenges. Florida is a great alternative with lower taxes, mild climate, and high demand for rentals.
If you need a detailed consultation and transaction support, our team of professionals will help you navigate all the details, avoid mistakes, and complete the deal with maximum benefit!
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