Why Foreign Buyers Should Consider Buying a Brownstone?

Over the last couple of years, foreign buyers have been purchasing an increased number of historic townhouses and brownstones in lieu of apartments situated in luxury condo buildings. While it is true that the typical townhome or brownstone does not offer the same number of amenities as a luxury condo building,  there are still a plethora of benefits that foreign buyers should consider, especially if they are looking for increased flexibility, anonymity, and higher appreciation when the property is sold.

Read below to discover the top reasons why foreign buyers should consider buying a brownstone in New York City.

No Board Approval Needed

Manhattan real estate is divided into three property types co-ops, condos, and townhomes/brownstones. Out of the three, brownstones are ideal for foreign buyers who are looking for added value and unique properties in the city.

Specifically, co-ops are not recommended for foreign buyers because the co-op’s board approval is needed if the owner wants to buy, sell, rent, or sublet the property. Technically, co-ops are not even considered real property. Instead, owners of the coop apartments own shares in the building. The owner then is given a proprietary lease from the Co-op corporation making the Co-op owner the indefinite tenant of the apartment until they transfer their shares to someone else or their shares are involuntarily foreclosed on. There are various limitations for owners to rent out their property and sell their property. As such, Co-op owners typically make their apartment their primary residence, which is typically not the case for international buyers.

While condos offer a little bit more flexibility, they can still be fairly expensive compared to buying a brownstone or townhouse. Townhouses offer the added benefit of higher value and more privacy as you’re typically not living on top of one another. Some townhouses even come with the added benefit of air rights above the property, which may be sold or leased separately from the property.


Typically the housing boards of condo and co-op buildings have strict financial disclosure requirements. For the typical foreign buyer, this level of financial scrutiny and disclosure may be uncomfortable, to say the least. However, by purchasing a townhouse, buyers do not have to disclose their finances in the same way they would have to when purchasing a car condo building. Overall, townhouse buyers have the option of purchasing the property anonymously.


The trends in the New York City real estate market indicate that purchasing a townhome is more affordable than some of the more expensive condo units in the city, which offer a fraction of the space compared to a townhouse. While it is true that the townhouse will not come with the same amenities, there are ways of getting around that in 2021. Specifically, many townhouse owners will install a virtual doorman as a way to screen packages and visitors. Additionally, hiring a property manager is also an option, especially if you do not reside in the property full-time, or if you use the space as a part-time Airbnb, etc.

No Additional Expenses For Foreign Buyers

Generally speaking, the cost of purchasing a brownstone for a foreign buyer is the same as a US citizen. In other words, there are no additional costs or taxes levied on international buyers. The only additional cost that a foreign buyer may incur is associated with setting up an entity structure to hold/own the property. However, this should essentially be a non-issue as many US citizens incur the same costs when setting up entities for investment property or when purchasing a second home.

Foreign buyers have the option of owning a brownstone in their individual name or through an entity structure such as a Corp or LLC. There are various pros and cons associated with each form of ownership and should be discussed thoroughly with a tax attorney to ensure that foreign buyers are taking advantage of the best options.

Transaction Cost

Transaction costs are the same for foreigners and US citizens. Specifically, when purchasing a property in New York City, the cost is typically around 8% of the price of the property. This percent is broken down into 6% goes to both sides brokers, and the remaining 2% takes care of attorney fees, transfer taxes, and other miscellaneous expenses.

Capital gains taxes

When an international or foreign buyer sells his property in New York City, he will incur the same capital gains taxes as a local. Specifically, in New York City, the capital gains taxes are 25% of the gain. However, it depends on the ownership structure, the income, and a host of other considerations.

One thing to consider is that when a foreigner sells property in New York City, they are subject to 15% being withheld from the sale. This is called the foreign investment in real property tax. This is a way for the government to ensure that foreign buyers report and pay annual taxes. In the event that the foreigner has been pain and or reporting his taxes annually, they can request an exemption from the FRPT tax. In any event, this withholding is refundable once the IRS confirms that all taxes have been paid by the foreigner. It is not an incremental tax charge to foreign buyers.

The Importance of a Buyer’s Agent

While it is advisable for everyone to seek the assistance of a buyer’s agent, it is even more important for foreing buyers as they  likely have very little knowledge of the New York City real estate market.


An exclusive buyer’s agent is a licensed real estate salesperson/broker who has no interest in steering a buyer towards a certain property; as such there is no conflict of interest. Instead, buyer’s agents exclusively focus on finding the best property for their clients. Foreign buyers don’t have to pay any commission to a buyer’s agents as their commission is paid by the seller.

Overall, an experienced buyer’s agent  will ensure that foreign buyers are not being taken advantage of by sellers. On the other hand, the buyer’s agent will ensure that their foreign buyers make appropriate offers not to insult the seller and ensure that they have a legitimate shot at their offer being accepted by the seller .  Additionally, a buyer’s agent will guide foreign buyers through contract negotiations and answer any questions along the way.

Final Thoughts

Overall, townhomes are unique and different. The character of a townhouse far exceeds the modern cookie-cutter feel of most luxury condo units in New York City. The financial privacy associated with purchasing a brownstone is enticing to foreign buyers who wish to remain anonymous when investing in New York City Real Estate. Given the fact that there are essentially no added expenses for foreigners to purchase a brownstone in New York City, coupled with the added space that brownstones offer, we expect brownstone purchases by foreign investors to increase in 2022.


Schedule a call with me here if you have any interest in obtaining a complimentary valuation for your home or buyer consultation.

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Authored by: Stanley Montfort


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About the Author
Since the start of the pandemic, Stanley Montfort has played a crucial role in facilitating over one billion dollars worth of brownstone sales in New York City. He is a recognized expert in the city's brownstone and townhouse market, with extensive experience in both sell-side and buy-side brownstone transactions, thanks to his military and law background.

Stanley honed his real estate skills at Leslie J. Garfield, where he established the Harlem Townhouse Market, and has assisted in numerous co-ownership transactions, including more complicated deals involving SROs, seller financing, negotiating with tenants, and leaving all parties satisfied.

With a vibrant and diversified career spanning the legal, banking, and technology industries, Stanley brings a wealth of experience to help his clients achieve their real estate objectives. He applies innovative marketing strategies, strategic thinking, and utmost professionalism and integrity to every deal. As a savvy negotiator with strong analytical skills, Stanley has successfully navigated even the most challenging real estate deals to deliver the desired results.

Moreover, Stanley provides a personalized and engaging real estate experience marked by complete transparency, data-driven financial decisions, and honest conversations. He strives to earn his clients' trust and is committed to ensuring that their needs are fully understood and executed without compromise.

Originally from New Jersey, Stanley is a graduate of Fordham University, where he earned his JD and Masters in International, Political, Economy, and Development. Whether you are looking to earn top dollar for your property or find your dream home, Stanley is the no-brainer choice to help you achieve your real estate goals.