Foreign Buyers Return to NYC: How International Investment is Reshaping the 2025 Real Estate Market

After years of international sellers dominating New York City’s real estate transactions, 2025 marks a dramatic shift as foreign buyers are making a strong comeback to the market. According to The Real Deal, this marks a major shift in buyer-seller dynamics. So far in 2025, there has been one foreign buyer for every two international sellers. That’s the closest balance since early 2020. Just two years ago, there were 3.6 sellers for every international buyer.

The Global Factors Driving Foreign Investment

Several international factors are contributing to this renewed interest in NYC real estate. The demand comes as China’s housing market faces serious declines. In May, residential sales dropped more than 6% year-over-year. Additionally, the US saw the second-largest millionaire inflow in 2025, just behind the UAE, according to Henley & Partners. China and the U.K. had the biggest millionaire outflows.

Despite US political tensions and new tariff policies, foreign buyers see New York as a safer investment. Kane Manera of Corcoran, who recently traveled to London to promote Central Park Tower, said NYC still offers relative value. “There’s uncertainty in the US,” he said. “But compared to the U.K. or China, New York is still a stable choice.” Douglas Elliman’s George Vanderploeg echoed that sentiment.

Understanding the Complex Tax Landscape

Foreign buyers entering the NYC market must navigate a complex web of federal, state, and local tax obligations that can significantly impact their investment returns. Under FIRPTA, the buyer or transferee of the real property is required to withhold and remit to the IRS a certain percentage (usually 15%) of the total amount realized by the foreign seller on the disposition of their United States real property interest.

The tax burden extends beyond federal requirements. When a non-US resident sells a property in New York City that he or she has owned for over a year, he or she must pay 30% of the price of the sale in Federal and State taxes. In 1980, the US government instated the Foreign Investment in Real Property Tax Act, which withholds these taxes from the sale’s proceeds in order to ensure that non-US residents pay the taxes. New York State withholds 6.85% for taxes, and the IRS withholds an additional 10%.

The Impact on NYC’s Luxury Market

This surge in foreign investment is particularly evident in Manhattan’s luxury segment. Manhattan apartment sales rose 29% in the first quarter, and the total value of apartment sales in the city reached $5.7 billion, up 56%. The strength has largely been driven by the high end of the market and luxury properties, as the wealthy sought a safe investment.

We’re seeing a notable increase in activity from family offices, many of which are acquiring real estate as long-term legacy assets,” said real estate agent Cindy Scholz of Compass. This institutional approach to real estate investment suggests that foreign buyers are viewing NYC property as a stable store of value amid global economic uncertainty.

Safety and Compliance Considerations for International Investors

For foreign investors purchasing properties in occupied buildings or those undergoing renovation, ensuring tenant safety and regulatory compliance becomes crucial. This is particularly important in NYC, where As a New York City based company, we ensure your project meets all city-specific codes and regulations. Understanding local building codes and safety requirements is essential for protecting both investment value and tenant welfare.

When foreign investors acquire properties that require construction or renovation work in occupied buildings, implementing a comprehensive tenant protection plan nyc becomes a critical component of the investment strategy. These plans ensure compliance with NYC Department of Buildings requirements while maintaining tenant safety during construction activities.

Property Ownership Structures and Strategic Planning

Smart foreign investors are increasingly utilizing strategic ownership structures to optimize their tax position and liability protection. In order to avoid these taxes, a foreign investor can creates a Limited Liability Company, or LLC, in order to purchase and sell real estate in the City of New York. It is often beneficial for foreign buyers to set up a U.S. based LLC to purchase the property. Not only does this have tax benefits, but corporate ownership also shields the buyer from personal lawsuits in the U.S.

Market Outlook and Investment Opportunities

With rising global wealth migration, foreign investment in New York is likely to grow. Developers may increase outreach abroad, offer more payment flexibility, and tailor buildings to suit global buyers’ tastes. The luxury market’s momentum in 2025 may be just the beginning.

The current market conditions present unique opportunities for foreign investors who understand the regulatory landscape and can navigate the complex requirements. I believe 2025 has the potential to be the strongest year for real estate since 2021. Buyers have grown increasingly comfortable navigating the current economic landscape, fostering confidence in both financing opportunities and making significant cash investments in the market.

As international buyers continue to view NYC real estate as a safe haven investment, the importance of working with experienced professionals who understand both the global investment landscape and local regulatory requirements cannot be overstated. From tax planning and ownership structure optimization to ensuring building safety and compliance, successful foreign investment in NYC real estate requires comprehensive expertise across multiple disciplines.