FOREIGN INVESTMENT IN NYC REAL ESTATE

At Dilendorf Law Firm, we focus on providing legal support to international clients in their investments in New York City real estate. Our services include advising on investment structures and representing clients in all related matters.

We combine hands-on real estate experience with legal experience, making us a one-stop shop for real estate clients around the world.

Our firm has significant experience in developing and implementing tax efficient holding structures for foreign investments in the U.S. real estate that minimize the U.S. tax burden arising from participation in real estate projects.

Purchasing U.S. real estate as a non-resident is different in some very important ways from buying property as a citizen or permanent resident.

The rules that apply to such transactions and the processes that must be followed are often more complicated and time consuming. Even basic things like opening a bank account for non-residents require multiple steps and additional documents.

As such, careful planning is crucial at every stage of the real estate transaction to ensure successful execution and compliance with the state and federal laws.

Our real estate law firm guides foreign clients through every aspect of a real estate transaction, including:

• Forming tax-efficient real estate holding entities for foreign clients;
• Compliance with FIRPTA (Foreign Investment in Real Property Tax Act);
• Advising clients as to their U.S. and New York State/New York City tax and reporting obligations in connection with purchase and sale of real estate;
• Ensuring compliance with federal, state and municipal tax laws;
• Obtaining U.S. tax identification numbers for purchasing real estate;
• Assisting clients in opening of the U.S. bank accounts;
• Drafting, negotiating and reviewing purchase offers, contracts of purchase and sale, closing documents and deeds; and
• Conducting title search and examination, and resolving title problems.

Common Pitfalls when International Clients Investing in NYC Real Estate:

As part of our international real estate practice, we identified the top critical issues in the process of multinational clients investing in NYC real estate.

Pre-purchase legal and tax planning can minimize a foreign buyer’s legal responsibilities and maximize tax savings with regard to income, gift, estate taxes, and FIRPTA withholding when it comes to investing in New York real estate.

Specifically, this summary discusses:

1. Non-U.S. citizens purchasing New York real estate individually is a mistake due to potential legal liabilities and tax exposure.
2. Buying New York City properties using limited liability companies (LLCs) is discouraged as it may not provide the desired level of protection and tax optimization.
3. Not claiming bilateral tax treaties when purchasing NYC real estate is an expensive oversight that could result in unnecessary tax burdens.
4. Not asking the right questions when buying U.S. real estate could lead to disastrous legal and tax liability.
5. Not considering the use of a U.S. or foreign trust to buy/hold NYC real estate limits potential tax savings and protection benefits.
6. Not considering the advantage of using a NYC blocker structure for holding U.S. real estate limits the ability to optimize tax and legal protection.
7. After the initial purchase planning, the next steps include ongoing tax and legal compliance and estate planning.

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