Buying foreign real estate: Easiest countries, costs, and US tax rules

Buying property abroad does not, by itself, trigger a separate US information return. For the 2025 tax year, direct foreign real estate is not an FBAR asset or a Form 8938 specified foreign financial asset. (IRS)

The easiest countries for Americans to buy real estate combine clear foreign-ownership rules with workable closing procedures, financing, and title protection.

US citizens remain subject to US tax on worldwide income while living abroad, so rental income and a later sale can still affect Form 1040. The IRS rules for US citizens living abroad explain that worldwide-income rule.

Before choosing a country, compare how you will hold title. TFX explains how foreign property ownership structures affect US expat taxes.

The following six factors should drive the buying decision:

• Foreigners’ right to own land or condominiums.
• Purchase price and total transaction costs.
• Financing available to nonresident buyers.
• Residency or visa benefits tied to qualifying property.
• Depth of the local expat and resale market.
• Lifestyle fit, title quality, and local legal protections.

A bank account used to buy or manage the property is different from the property itself. If foreign financial accounts exceed $10,000 in aggregate at any time in 2025, check how FBAR and FATCA reporting differ. (FinCEN.gov)

The IRS also separates deductible real estate expenses from costs that must be capitalized. Its real estate tax guidance is useful once the property produces rental income or is sold.

Easiest countries for Americans to buy real estate abroad

Americans can buy property in numerous countries in 2026, but ownership rights vary sharply. The 16 markets below range from open freehold systems to condominium quotas, restricted zones, and temporary foreign-buyer bans.

Where can Americans buy real estate abroad? Mexico, Portugal, Spain, France, Costa Rica, Greece, the UAE, Turkey, Colombia, Italy, and Panama all permit workable forms of foreign ownership.

Thailand, Vietnam, and the Philippines allow narrower ownership structures. Canada and Australia currently impose major restrictions on certain foreign residential purchases.

Easiest to own outright

Five markets stand out for relatively open ownership or established legal routes: Mexico, Portugal, Spain, France, and Costa Rica. Mexico has a special 100-kilometer border and 50-kilometer coastal restricted zone, while the four European or Central American markets use different title safeguards. (sre.gob.mx)

What countries can Americans buy real estate? Portugal, Spain, France, and Costa Rica generally permit direct ownership by US citizens, while Mexico permits direct ownership outside its constitutionally defined restricted zone.

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Mexico

• Ownership: Foreigners can own directly outside the restricted zone.
• Restriction: A fideicomiso is generally used for residential property within 100 kilometers of a border or 50 kilometers of a coast. (sre.gob.mx)
• Roundtrip costs: About 6.5%–14% as a market benchmark. (Global Property Guide)
• Financing: Local and cross-border options exist, but cash purchases remain common.
• Residency: Property ownership alone does not automatically create Mexican residence.
• Watch: Confirm that the land is valid private title rather than unresolved ejido property.

See TFX’s guide to buying property in Mexico as an American before signing a purchase contract.

Portugal

• Ownership: Americans can generally acquire Portuguese real estate directly.
• Restriction: There is no nationality-based ban comparable with Canada’s current federal restriction.
• Roundtrip costs: About 5.15%–17.2%. (Global Property Guide)
• Financing: Portuguese lenders serve qualifying nonresidents, usually with stricter underwriting.
• Residency: Real estate no longer qualifies as a Golden Visa investment.
• Watch: Review the reservation and promissory-contract deposit terms before committing funds.

Portugal’s current ARI rules exclude direct and indirect real estate investment from qualifying investment activity. (aima.gov.pt)

TFX covers the transaction process in its guide to buying property in Portugal as an American.

Spain

• Ownership: Americans can generally buy Spanish real estate.
• Restriction: Foreign nationality alone does not impose a general residential property ban.
• Roundtrip costs: About 10.5%–20%. (Global Property Guide)
• Financing: Nonresident mortgages are available from Spanish lenders.
• Residency: Spain ended its investor residence route on April 3, 2025. (BOE)
• Watch: Obtain a nota simple to review registered ownership, mortgages, liens, and other charges.

For the local process, see TFX’s guide on whether Americans can buy property in Spain.

France

• Ownership: US citizens can generally buy French residential property.
• Restriction: France has no broad nationality-based prohibition on American buyers.
• Roundtrip costs: About 3.82%–12% in the current country comparison. (Global Property Guide)
• Financing: French mortgage financing can be available to nonresidents.
• Residency: Buying a home does not itself grant French residence.
• Watch: A notaire plays a central legal role in the transfer.

TFX explains the process for Americans buying property in France.

Costa Rica

• Ownership: Foreigners generally receive the same rights to titled property as Costa Rican citizens.
• Restriction: Maritime-zone property can fall under concession rules rather than ordinary titled ownership.
• Roundtrip costs: About 6.25%–9.25%. (Global Property Guide)
• Financing: Financing exists but can be less accessible than for residents.
• Residency: Buying a home does not automatically grant residence.
• Watch: Confirm titled status, boundaries, easements, and maritime-zone issues.

See TFX’s guide to buying property in Costa Rica as an American.

These are countries where it’s easy for Americans to buy real estate compared with markets that prohibit foreign land ownership or impose national quotas.

They are also among the countries where Americans can easily buy real estate without using a condominium-only ownership model.

 

Property-linked residence or citizenship

Three markets in this comparison still connect qualifying real estate with an immigration benefit in 2026: Greece, the UAE, and Turkey. Greece starts at €250,000 only in specified conversion or listed-building cases, while its standard geographic thresholds are €400,000 or €800,000. (Stegasi)

The countries where Americans can buy real estate and also pursue a property-linked immigration route require the immigration test to be checked separately from the title rules.

Greece

• Ownership: Americans can generally acquire Greek property.
• Restriction: Certain border or strategically sensitive areas can require extra review.
• Roundtrip costs: About 7.37%–10.77%. (Global Property Guide)
• Financing: Local financing is possible but lender-specific for nonresidents.
• Residency: Qualifying Golden Visa property thresholds are €800,000, €400,000, or €250,000 depending on category and location.
• Watch: The €250,000 route is not a general nationwide price threshold.

The Greek government’s current housing portal confirms the €800,000 and €400,000 geographic tiers. (Stegasi)

For broader US filing considerations, see TFX’s US tax guide for Americans in Greece.

United Arab Emirates

• Ownership: Foreign buyers can own qualifying property in designated freehold areas.
• Restriction: Ownership eligibility depends on the emirate and designated area.
• Roundtrip costs: About 5%–8%. (Global Property Guide)
• Financing: UAE lenders offer nonresident mortgages subject to credit and LTV rules.
• Residency: AED 2 million in qualifying real estate can support a renewable 10-year Golden Visa. (U.AE)
• Watch: Property and visa eligibility must both be confirmed before purchase.

This 5-year term is the current UAE government rule as of February 26, 2026.

TFX’s US tax guide for Americans in Dubai and the UAE covers the US side.

Turkey

• Ownership: Americans can generally purchase qualifying Turkish real estate.
• Restriction: Location and security-zone restrictions can apply.
• Roundtrip costs: About 8.6%–8.7%. (Global Property Guide)
• Financing: Local mortgage access for foreigners depends on the bank.
• Citizenship: Real estate worth at least $400,000 can qualify under the citizenship-by-investment route.
• Watch: The qualifying property is subject to a 3-year resale restriction. (Invest in Türkiye)

See TFX’s guide to buying property in Turkey.

Best value and lifestyle options

Colombia, Italy, and Panama combine comparatively broad access for foreign buyers with distinct lifestyle and price advantages. Their current roundtrip-cost benchmarks range from about 5% in Colombia to as much as 18% in Italy. (Global Property Guide)

The best countries for Americans to buy real estate depend on whether the priority is low transaction cost, EU ownership, residency options, rental demand, or long-term personal use.

These can be countries where Americans can buy real estate easily, but local title review is still required before wiring a deposit.

Colombia

• Ownership: Foreigners can generally buy Colombian real estate directly.
• Restriction: There is no broad prohibition based solely on US citizenship.
• Roundtrip costs: About 5%–8.5%. (Global Property Guide)
• Financing: Local mortgages for nonresidents are less common than cash purchases.
• Residency: Qualifying investment can support an investor visa, subject to current immigration thresholds.
• Watch: Verify title history, liens, taxes, and building approvals.

TFX explains the process for Americans buying property in Colombia.

Italy

• Ownership: Americans can generally purchase Italian property under applicable reciprocity rules.
• Restriction: No broad ban applies to US buyers.
• Roundtrip costs: About 10%–18%. (Global Property Guide)
• Financing: Italian lenders may finance qualifying nonresidents.
• Residency: Buying property alone does not create automatic Italian residence.
• Watch: €1-home programs usually carry renovation deadlines and other obligations beyond the nominal purchase price.

See TFX’s guide to buying property in Italy as an American.

Panama

• Ownership: Foreigners can generally hold titled Panamanian real estate.
• Restriction: Constitutional limits apply near international borders, and some island or concession property needs extra review.
• Roundtrip costs: About 7.1%–9.1%. (Global Property Guide)
• Financing: Local and developer financing may be available.
• Residency: Separate investment-based residence programs exist, but buying any home does not automatically qualify.
• Watch: Distinguish registered title from derecho posesorio, or possessory-rights property.

TFX’s guide to buying property in Panama explains the local ownership structures.

These are countries easy for Americans to buy real estate in relative to markets where legal ownership is limited to condominiums or new construction.

Restricted but workable markets

Five markets require extra care in 2026: Thailand, Vietnam, the Philippines, Canada, and Australia. Thailand limits foreign condominium ownership to 49% of a project, while Vietnam uses a 30% condominium cap and the Philippines limits foreign participation in condominium projects to 40%. (SAWASDEE THAILAND - THAILAND.GO.TH)

Thailand

• Ownership: Foreigners normally cannot own land directly.
• Restriction: Foreign condo ownership is capped at 49% of the project’s saleable condominium area. (SAWASDEE THAILAND - THAILAND.GO.TH)
• Roundtrip costs: About 6%–9.2%. (Global Property Guide)
• Financing: Foreign-buyer mortgage options are limited.
• Residency: Condominium ownership does not itself create permanent residence.
• Watch: Keep bank evidence showing qualifying foreign-currency funds entering Thailand.

TFX covers the restrictions in its guide to foreigners buying property in Thailand.

Vietnam

• Ownership: Eligible foreign individuals can own qualifying residential units under Vietnam’s housing rules.
• Restriction: Foreign ownership is capped at 30% of apartments in a condominium building. (vbpl.moj.gov.vn)
• Roundtrip costs: About 3.55%–6.1%. (Global Property Guide)
• Financing: Local lending to foreign buyers is restricted and lender-specific.
• Residency: Home ownership does not automatically confer residence.
• Watch: Ownership is subject to statutory duration and project eligibility rules.

See TFX’s guide to foreigners buying property in Vietnam.

Philippines

• Ownership: Foreign nationals generally cannot own Philippine private land directly.
• Restriction: Foreign participation in a condominium project is capped at 40%. (boi.gov.ph)
• Roundtrip costs: About 13%–15.25%. (Global Property Guide)
• Financing: Selected lenders offer financing for qualifying condominium purchases.
• Residency: Buying a condominium does not itself grant permanent residence.
• Watch: Confirm the building has remaining foreign-ownership quota before paying.

Canada

• Ownership: Rules depend on the buyer, property, and location.
• Restriction: The federal prohibition on purchases of residential property by non-Canadians was extended through January 1, 2027, subject to exceptions. (Canada)
• Roundtrip costs: About 4.6%–16.5%. (Global Property Guide)
• Financing: Nonresident financing remains possible for transactions that are legally permitted.
• Residency: Property ownership does not create Canadian immigration status.
• Watch: Provincial foreign-buyer taxes can apply in addition to federal restrictions.

TFX explains the current rules in whether Americans can buy property in Canada.

Australia

• Ownership: Foreign persons can still seek approval for eligible new dwellings and certain other investments.
• Restriction: Established-dwelling purchases are generally prohibited from April 1, 2025, through June 30, 2029. (Foreign investment in Australia)
• Roundtrip costs: About 3.6%–10.5%. (Global Property Guide)
• Financing: Nonresident lending exists but is more restrictive than resident lending.
• Residency: Property ownership does not itself create Australian residence.
• Watch: Foreign-investment approval and vacancy rules can apply.

The June 30, 2029 date reflects Australia’s July 1, 2026 government update.

TFX’s guide to foreigners buying property in Australia explains the purchase categories.

For cross-country cost benchmarking, Global Property Guide’s transaction-cost data tracks buying and selling costs across more than 80 markets.

International Living also publishes destination-level property guidance, but local counsel and government registries should control when its summaries differ from law or current government policy.

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Country comparison at a glance

The 16-country comparison below shows why “easy” does not mean the same thing everywhere. Roundtrip-cost estimates run from roughly 3.55% in Vietnam to 20% in Spain, while five countries in this table have material quotas, bans, or land restrictions.

The key decision rule is ownership first, cost second: a low-cost market is not a workable purchase if the property type is legally unavailable to a foreign buyer.

 

Roundtrip percentages are benchmark estimates, not quotations for a particular purchase. They were last reviewed against the current Global Property Guide dataset on September 3, 2026. (Global Property Guide)

What Americans need to check before buying property overseas

A foreign-property closing should not proceed until five areas have been checked: legal title, foreign-ownership rules, immigration consequences, money-transfer requirements, and US tax reporting. A title problem can make a property unusable even when its purchase price appears attractive.

The following five pre-purchase checks should be completed before you send a nonrefundable deposit:

• ☐ Confirm registered ownership, liens, mortgages, easements, and title history.
• ☐ Verify whether your nationality and property type permit direct ownership.
• ☐ Check whether residence rights are separate from property rights.
• ☐ Confirm bank, currency-transfer, and source-of-funds documentation.
• ☐ Review both local tax and US reporting consequences.

The IRS recommends verifying ownership and transaction documentation rather than relying solely on representations from sellers or promoters. See its guidance on avoiding problems in real estate transactions.

The following six documents are worth collecting before closing:

• Current title or land-registry extract.
• Purchase agreement and all amendments.
• Government approval or foreign-buyer permit, if required.
• Bank-transfer and currency-conversion records.
• Invoices for taxes, notary, lawyer, and registration fees.
• Evidence showing the legal owner and ownership structure.

The US tax check is separate from the local title check: direct real estate is excluded from Form 8938, but a foreign entity or financial account connected with the property can still be reportable. (IRS)

 

For financial-asset reporting, see TFX’s detailed guide to Form 8938 and specified foreign financial assets.

Based on our client scenario at TFX: a buyer finds a beachfront home at an attractive price, but the title review shows that the parcel sits inside a restricted ownership zone.

Changing to the legally permitted ownership structure before closing can prevent a title defect and also clarifies which US forms, if any, apply to that structure.

 

Foreign property buying costs and fees

The advertised property price is only 1 part of the acquisition cost. Buyers can also face transfer tax, registration, notary or legal fees, financing charges, exchange-rate costs, and recurring ownership expenses.

The following eight cost categories belong in a pre-purchase budget:

A $300,000 property can require tens of thousands of dollars beyond the asking price when local transfer taxes, legal costs, financing, and foreign-exchange charges are added.

 

For US purposes, a cost being paid at closing does not mean it is currently deductible. TFX explains which expenses for American property investments may be deductible or capitalized.

The IRS separately limits deductions for real estate taxes, mortgage interest, points, and other property expenses.

Mexico adds a special cost in its restricted zone. The Foreign Affairs Ministry’s 2026 Article 27 fee for the related permit is MXN 21,650, separate from bank-trust setup and annual trustee charges. (Portales SRE)

Portugal purchases commonly use a promissory contract before the final deed. Italy requires a notaio for the transfer, while Thailand foreign-condo buyers should retain bank documentation showing compliant incoming funds.

TFX’s guide to taxes and loan interest that may be deductible explains the US treatment after purchase.

For broader federal guidance, the IRS Real Estate Tax Center covers rental, sale, and property-related tax topics.

Based on our client scenario at TFX: a €300,000 apartment with 8% acquisition and closing costs requires an additional €24,000 before financing costs, furnishings, or currency spreads.

That makes the initial acquisition budget €324,000, not €300,000.

Financing a foreign property purchase

Foreign-property financing usually comes from an in-country lender, developer, specialist cross-border lender, or the buyer’s own capital. Nonresident mortgages commonly require more equity, with advertised loan-to-value limits often around 50%–75% rather than the highest domestic-buyer ratios.

Spain, Portugal, France, Italy, and the UAE have established nonresident lending markets. Approval still depends on income, currency, credit history, property type, age, and the lender’s policy.

Mexico and Panama also use developer financing in selected projects. Thailand has fewer conventional mortgage options for foreign buyers, so cash or offshore lending is more common.

A US home-equity loan can provide another source of funds, but it creates a separate US debt secured by US property. Interest deductibility depends on how the borrowed money is used and the applicable mortgage-interest rules.

Before comparing rates, compare the total borrowing cost. Arrangement fees, appraisals, life insurance, foreign-exchange spreads, and early-repayment charges can materially change a lower headline rate.

Selling foreign real estate

A US taxpayer selling foreign real estate generally calculates gain in US dollars and reports taxable worldwide gain on the US return. A qualifying main home can receive a Section 121 exclusion of up to $250,000, or up to $500,000 for certain married couples filing jointly. (IRS)

The full exclusion normally requires both ownership and use for at least two years during the five-year period ending on the sale date. Reduced exclusions can apply in qualifying employment, health, or unforeseen-circumstance cases. (IRS)

TFX’s guide to capital gains tax on foreign property covers the broader US calculation.

The gain calculation depends on USD basis, capital improvements, sale proceeds, selling costs, and exchange rates – not merely the difference between the foreign-currency purchase and sale prices.

 

The IRS’s sale-of-residence guidance explains the US home-sale rules.

If the buyer pays over time, separate rules may apply. The IRS explains the mechanics in its installment-sale guidance for real estate.

The following three record groups should be assembled before the sale closes:

• Purchase and original closing records, plus capital-improvement receipts.
• Sale contract, broker invoices, legal invoices, and final closing statement.
• Exchange-rate records for acquisition costs, improvements, sale proceeds, and foreign taxes.

A Foreign Tax Credit does not reduce foreign-source income dollar for dollar. Subject to its limitations, it reduces qualifying US income tax attributable to foreign-source income. (IRS)

TFX’s explanation of FIRPTA and US real estate withholding is useful for comparison, but FIRPTA itself concerns dispositions of US real property interests.

What US buyers owe the IRS

For a 2025 return filed in 2026, buying a foreign house directly does not itself create FBAR or Form 8938 reporting. US tax issues arise when the purchase involves foreign financial accounts or entities, when the property earns rent, or when it is later sold. (IRS)

The following four US tax rules cover the main issues.

1. Direct ownership is not an FBAR or Form 8938 asset. A bank account used for the property is different.

FinCEN requires an FBAR when a US person’s foreign financial accounts exceed $10,000 in aggregate at any point during the calendar year. (FinCEN.gov)

TFX explains the reporting overlap in its guide to FBAR versus FATCA.

For qualifying taxpayers living abroad, Form 8938 starts above $200,000 at year-end or $300,000 at any point for non-joint filers.

For a married couple filing jointly abroad, those thresholds are $400,000 and $600,000. See the IRS’s Form 8938 filing thresholds and asset rules. (IRS)

TFX’s Form 8938 guide covers the asset categories in more detail.

2. Rental income remains part of the US tax return.

Rent from foreign real estate is not foreign earned income from personal services, so the Foreign Earned Income Exclusion does not shelter it.

Foreign income tax paid on qualifying rental income can instead make the Foreign Tax Credit relevant. See TFX’s guide to reporting rental property on a US tax return.

3. A sale can create a US capital gain.

Section 121 can exclude up to $250,000 for an eligible individual and up to $500,000 for certain eligible married couples filing jointly when the ownership and use requirements are satisfied. (IRS)

Local property or gains taxes can still apply. TFX explains the interaction in its guide to foreign property tax for US taxpayers.

4. Foreign-currency borrowing adds a separate currency issue.

US tax calculations are made in US dollars. The IRS requires foreign-currency income and expenses reported on a US return to be translated into dollars. (IRS)

A foreign-currency mortgage can therefore create tax consequences separate from the property gain when exchange-rate movements affect repayment. The exact Section 988 result depends on the transaction and should be reviewed before payoff.

 

Tax example: Worked calculation

A Section 121 calculation must be done in US dollars, even when every purchase and sale document is denominated in euros. The example below uses a €300,000 purchase, €20,000 of capital improvements, and a €480,000 sale after four years.

Based on our client scenario at TFX: a single US taxpayer buys a primary residence in Portugal for €300,000 and lives there for more than two years.

The taxpayer later spends €20,000 on qualifying capital improvements and sells the home for €480,000.

The following five steps show the simplified calculation. The exchange rates are illustrative rather than historical market quotations.

1. Convert the purchase price. At an illustrative rate of $1.10 per €1, the €300,000 purchase equals $330,000.
2. Add capital improvements. At an illustrative $1.08 rate, €20,000 of improvements equals $21,600.
3. Calculate adjusted basis. Before any other basis adjustments, $330,000 plus $21,600 produces a $351,600 basis.
4. Convert the sale proceeds. At an illustrative $1.15 rate, the €480,000 sale equals $552,000.
5. Calculate the simplified gain. $552,000 minus $351,600 produces a $200,400 gain before considering selling expenses and any other basis adjustments.

The simplified $200,400 gain is below the $250,000 maximum Section 121 exclusion for an eligible single taxpayer.

 

This result assumes the taxpayer meets the Section 121 requirements and has no fact that limits the exclusion.

Portuguese tax can still apply even when the US taxable gain is $0. A Foreign Tax Credit cannot create a credit against US tax that does not exist on the excluded portion, although qualifying foreign tax may matter when a taxable US gain remains.

For a fuller home-sale analysis, see TFX’s guide to capital gains tax on a primary residence in the US and abroad.

Direct real estate does not trigger Form 8621. If the sale proceeds are later invested in a non-US pooled fund, though, review TFX’s guide to Form 8621 and PFIC reporting.

The figures above are educational and simplified. Basis, selling expenses, depreciation, exchange rates, foreign taxes, residence history, and ownership structure can change the actual US result.

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