Real Estate Sale in the USA: A Complete Guide to the Process, Taxes, and Nuances (Florida and New York)

Selling real estate in the USA requires consideration of legal, tax, and financial nuances, especially if the seller is a non-resident. In this article, we will cover the detailed selling process, taxes, fees, and transaction nuances with a focus on Florida and New York, as two of the most popular states.

1. Can Foreigners Sell Real Estate in the USA?

Yes, foreign nationals can freely sell real estate in the USA, but:

✔ Non-residents are subject to a capital gains tax on the sale (FIRPTA – 15%).
✔ Local transfer taxes must be considered.
✔ The average sale time is 2-6 months.
✔ There may be restrictions on sales in Co-op and certain gated communities.

2. How to Determine the Value of Real Estate?

It is recommended to contact a realtor or use platforms like Zillow, Realtor, MLS to analyze the market.

Factors affecting the price:

• Location and infrastructure.
• Condition of the property and year of construction.
• Presence of tenants (for investment properties).
• Buyer’s or seller’s market (supply and demand).

Average exposure time:

• New York: 4-6 months.
• Florida: 2-4 months.

3. Main Taxes When Selling Real Estate

Federal Capital Gains Tax

• If the property is sold for more than it was purchased, a profit tax applies.
• For residents, the tax rate is 15-20%.
• For non-residents (foreigners), the tax is withheld at a 30% rate, unless evidence of a lower income is provided.

FIRPTA Tax for Non-Residents

• If the seller is not a tax resident of the USA, the buyer is required to withhold 15% of the sale price (if the property exceeds $300,000).
• Exceptions: If the buyer uses the property as their primary residence and the price is less than $300,000 – FIRPTA tax does not apply.

Local Transfer Taxes

Additionally, in New York, a Mansion Tax (1%) is applied for properties sold for more than $1 million.

4. The Process of Selling Real Estate in the USA

Step 1: Preparing the Property for Sale

• Perform minor repairs, enhance curb appeal.
• Market evaluation and price determination.
• Sign a listing agreement with a realtor.

Step 2: Listing the Property on the Market

• Listing on platforms (Zillow, MLS, Realtor).
• Organizing showings and marketing.

Step 3: Receiving Offers and Negotiations

• Buyer makes an offer.
• Terms of the deal and possible negotiation are discussed.
• Preliminary agreement is signed.

Step 4: Purchase Agreement and Deposit

• Signing the main agreement.
• Buyer deposits earnest money – usually 5-10% of the price.

Step 5: Due Diligence

• Title search.
• Preparation of documents for transfer of rights.

Step 6: Closing the Deal

• Signing final documents.
• Payment of remaining amount.
• Handing over keys and registering new owner.

5. Commissions and Additional Costs

Who Pays the Commissions?

• In the U.S., the seller typically pays the realtor commission.
• The average agent commission is 5-6% of the sale price.

Additional Costs

• Legal services: $2,500 – $5,000.
• Notary and registration fees: $1,000 – $3,000.
• Home staging expenses: $2,000 – $10,000 (optional).

6. Taxes When Selling Property as a Non-Resident

🔹 FIRPTA – 15% is withheld on sale.
🔹 Income tax 30% for non-residents (unless lower income is proven).
🔹 Possibility of tax refund through IRS when filing a return.
🔹 Opening an LLC may help optimize tax liabilities.

7. How to Avoid High Taxes?

✅ Use a tax advisor to calculate optimal payments.
✅ File a tax return in the U.S. – it’s possible to get a refund of the FIRPTA tax.
✅ Sell property through an LLC – reduces tax burden.
✅ Own the property for more than 3-5 years – reduces capital gains tax.

8. What Challenges May Arise?

🔹 Lengthy sale process (especially in New York).
🔹 High realtor commissions and additional costs.
🔹 Restrictions in Co-op communities (approval for sale).

🔹 Potential market downturn – property value may decrease.

Conclusion

Selling property in the U.S. is a complex process that requires consideration of taxes, legal aspects, and correct pricing. In New York, the process is more regulated and lengthy, while in Florida it is easier with fewer taxes.

If you need consultation on sales, taxes, and legal matters, our team of experts will help you optimize the process, avoid mistakes, and sell property for maximum profit!