Buying Property Abroad as an American: Everything You Need to Know
TL;DR: Yes, U.S. citizens can buy property in most countries abroad — there is no U.S. law preventing it. The complications are local: ownership rules, residency requirements, taxes, and reporting. Foreign real estate itself is not a reportable asset under FATCA, but rental income deposited in a foreign account can trigger FBAR ($10,000 aggregate balance) and Form 8938 thresholds ($200,000–$600,000 depending on filing status and residency). Plan the deal, the structure, and the U.S. reporting in parallel — not after the fact.
There are many reasons to buy property abroad. A second home in a warmer climate. A rental income stream in a city you love. Asset diversification away from a single currency. A path to a second residence or, in some countries, a second passport.
At Bespoke Life we work with American clients buying in Monaco, the South of France, Italy, Portugal, the UK, Switzerland, Dubai, and across the Caribbean. The mechanics differ in every jurisdiction, but the questions are the same. This guide answers them in the order that matters.
Can a US citizen buy property abroad?
In most countries, yes. There is no U.S. law that restricts citizens from purchasing real estate overseas. The constraints come from the target country's rules.
A few patterns worth knowing:
Open markets — U.K., France, Italy, Portugal, Spain, Germany, most of the EU, the U.A.E. (in designated freehold zones), most of the Caribbean. Foreign buyers face few or no ownership restrictions.
Restricted markets — Mexico (foreign buyers in coastal/border zones must use a fideicomiso bank trust), Thailand (no land ownership for foreigners — only condos up to 49% of a building), Indonesia, the Philippines, Switzerland (Lex Koller restricts foreign residential purchases).
Closed or near-closed — China, Vietnam, parts of Eastern Europe, where foreigners are limited to long leaseholds or specific entity structures.
Before you commit to a country, the first call should be to a local lawyer who has handled American buyers in that jurisdiction. The second should be to your U.S. tax advisor. Order matters.
Why buy property abroad?
The benefits group into four buckets:
Lifestyle. A part-time residence in a place you love. Many of our clients use European homes for the summer months and a Caribbean or Dubai home in winter.
Income. Short-term and long-term rental yields in cities like Lisbon, Dubai, and parts of Italy can outperform comparable U.S. markets, especially after currency-favorable entry.
Asset diversification. Holding wealth in multiple currencies, jurisdictions, and asset classes is a risk-management tool, not just a lifestyle decision.
Residency or citizenship pathways. Several countries offer residence-by-investment ("golden visa") programs tied to property purchase — Portugal (limited as of 2024), Greece, Italy, Malta, the U.A.E., and several Caribbean nations. A few of these programs lead to citizenship after a residency period. Rules change frequently — always confirm current terms.
We covered the case for one of the strongest European markets in our deeper guide to buying a luxury property in Monaco, and the real estate landscape we work in across Dallas in luxury home rentals in Dallas.
The pitfalls Americans actually run into
After a decade of helping clients buy abroad, the recurring problems are not exotic. They are these:
Underestimating closing costs. Notary fees, registration tax, transfer tax, and legal fees can add 7–15% to the purchase price in Europe — substantially more than U.S. closing costs.
Currency exposure. A 5% move in EUR/USD between offer and closing can swing the dollar cost of a €5M property by $250K. Forward contracts and FX brokers exist for a reason.
Title and ownership disputes. Common in countries with fragmented inheritance laws (parts of Italy, Greece, and Portugal). Complete title due diligence is non-negotiable.
Property management blind spots. A villa you visit twice a year needs full-time oversight. Without it, small problems become structural ones.
Tax surprises on the exit. Selling foreign real estate triggers U.S. capital gains tax even if you have already paid local capital gains in the country of sale (you can usually offset with the Foreign Tax Credit, but it is paperwork-intensive).
Language and legal-system gaps. Common-law and civil-law countries treat property contracts differently. Assumptions from a U.S. transaction will mislead you.
A good local lawyer, a good cross-border tax advisor, and a concierge or buyer's agent who has done this before are the three relationships that prevent the most common mistakes.
Do Americans pay tax on property abroad?
Yes — almost always, on both sides. Here is the simplified picture for 2026:
In the country where the property is located, you will typically pay:
Property purchase tax / stamp duty / transfer tax at acquisition
Annual property tax (rates vary widely by country)
Income tax on any rental income earned locally
Capital gains tax on sale (rates and exemptions vary)
In some jurisdictions, an annual wealth tax that includes real estate
In the U.S., regardless of where the property is, you must:
Report worldwide income on your annual U.S. tax return — including foreign rental income (converted to USD)
Pay U.S. capital gains tax on sale (Form 8949 + Schedule D), though you can usually claim a Foreign Tax Credit for foreign capital gains tax paid (Form 1116)
Apply the Section 121 home sale exclusion if it qualifies as your primary residence — up to $250,000 of gain excluded ($500,000 for married filing jointly)
This is a complex area where mistakes are expensive. Always work with a CPA who specializes in cross-border / expat taxation before you buy, not after.
FBAR and FATCA: the reporting Americans miss
This is the area most likely to bite American buyers, and the area most blogs get wrong. Here is what is actually true in 2026:
Foreign real estate itself is NOT reportable under FATCA Form 8938 or FBAR. Holding a villa in France does not, by itself, create a reporting obligation.
However, related foreign accounts often do:
FBAR (FinCEN Form 114) — required if the aggregate value of all your foreign financial accounts (bank, brokerage, certain pensions) exceeds $10,000 at any point during the year. The threshold is low and easy to cross — a single rental deposit can do it. Filed separately from your tax return, due April 15 with automatic extension to October 15.
FATCA Form 8938 — required if specified foreign financial assets exceed:
U.S. residents: $50,000 single / $100,000 joint (year-end), or $75,000 / $150,000 at any time
Living abroad: $200,000 single / $400,000 joint (year-end), or $300,000 / $600,000 at any time
Filed with your annual U.S. tax return.
The trap: rental income deposited into a foreign bank account often pushes Americans over the FBAR threshold without them realizing it. If you plan to rent the property, plan the banking and reporting structure at the same time.
Penalties for missing these are severe — $10,000 starting point for non-willful Form 8938 failure, much higher for willful FBAR violations.
How Bespoke Life helps
We do not replace your lawyer or your CPA. We coordinate the people who together make a foreign property purchase actually work:
Property sourcing, including off-market deals our clients rarely see on public portals
Local advisor introductions — vetted lawyers, notaries, and tax specialists in each major jurisdiction
Currency and transfer logistics with FX brokers
Furnishing, design, and renovation oversight, working with our network of architects and interior designers
Ongoing property management for second homes and rentals
Coordination with U.S. tax advisors so reporting obligations are mapped before closing, not after
For inbound work — foreigners buying in the U.S. — we handle the equivalent service end-to-end and cover it in how to buy property in the USA as a foreigner.
FRequently Asked Questions
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Country-dependent. Some countries grant residency through property purchase (golden visa programs in Greece, Italy, Malta, the U.A.E., parts of the Caribbean). Others require a separate residency application, language tests, or other criteria. Buying property does not automatically give you the right to live there.
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In most countries, yes. There is no U.S. law preventing it. Some countries restrict foreign ownership of land (Mexico in coastal zones requires a fideicomiso, Thailand bars foreigners from owning land outright, Switzerland's Lex Koller limits residential purchases). Always check the destination country's rules first.
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The property itself is not reportable on FATCA Form 8938 or FBAR. But foreign bank accounts you use for the property — for closing funds, rental deposits, or maintenance — are reportable if they cross thresholds: $10,000 aggregate for FBAR, $50,000–$600,000 for Form 8938 depending on filing status and U.S./abroad residency.
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Local income tax in the country where the property sits, plus U.S. tax on the same income (the U.S. taxes worldwide income for citizens). You can usually offset double taxation with the Foreign Tax Credit (Form 1116) or a tax treaty provision. Have a cross-border CPA structure this before the first rental.
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Closing costs in Europe typically run 7–15% of purchase price (notary, registration, transfer tax, legal). Add ongoing property tax, maintenance, insurance, currency exchange costs, and property management fees. Budget 3–5% of property value annually for upkeep on a second home you do not occupy full-time.
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Engage a local property management company for regular inspections, maintenance, and bill payment. Install monitored security and remote-access cameras. For high-value properties, retained housekeeping or live-in caretakers are common in markets like the South of France and Italy.
Ready to look abroad?
If you are exploring a property purchase outside the U.S., the fastest way to get clarity on a specific country is a single conversation. We will tell you what is realistic in your target market, what it actually costs, and which advisors you need before you commit to anything.
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