United States rent guide

More on ownership

Barred outright

Nothing nationally. State laws bar nationals of named countries, chiefly China, Russia, Iran, North Korea, Cuba, Venezuela and Syria, from farmland and from property near military sites in those states.

Inheritance and gifts

Open to anyone. Estate tax reaches a non-resident's US property above a low exemption, which is why many foreign owners hold through a structure; take advice before buying.

Owning through a company

Common. A limited liability company owned by the foreigner holds the property; it changes liability and estate exposure, not the tax on rent. Outside this guide.

Letting it out from abroad

May a non-resident owner let it

Yes, with no permit and no residency. The tax rules, not property law, are what a non-resident landlord has to get right.

Licences, permits, landlord registration

Local. Many cities require a rental registration or licence and periodic inspections; short-term letting is permitted, licensed or banned city by city.

Local agent or representative

No, but a property manager is usual, and the manager becomes the withholding agent for tax.

The rent agreement

Written agreement required

Required by most states' statute of frauds for a term over a year; shorter leases may be oral but never are in practice.

Mandatory standard form

None nationally. State realtor associations publish standard leases that most landlords use; a few cities mandate clauses.

Language

Any. English in practice; some states require a translation when the lease was negotiated in another language.

Registry

None. Residential leases are not recorded with any registry.

When registration is required

Never. A signed lease is complete on signing; recording in the county land records is possible for very long leases but not done for homes.

Who registers

Not applicable

Registration cost

Not applicable

If it is not registered

Not applicable

Stamp duty

None on leases.

Notarisation and witnesses

Not required for a residential lease in nearly every state.

E-signature

Valid everywhere under the federal ESIGN Act and each state's Uniform Electronic Transactions Act; any method that shows intent works, with no identity scheme involved. Platforms such as DocuSign are the norm for remote landlords.

The usual term

Twelve months, then month to month unless renewed.

Rules the agreement must respect

Deposit

State law. California caps it at one month's rent since July 2024; New York at one month; many states have no cap. Several states require the deposit in a separate account and itemised deductions within a set number of days.

Rent increases

Free at renewal in most states. Rent control is local: New York City, parts of California under its statewide cap, Oregon, and a few others.

Notice periods

State law, commonly thirty days for a month-to-month tenancy and longer after a year's occupancy in some states.

Disputes

The local court, through an eviction suit the landlord must win before the tenant can be removed by the sheriff. Self-help eviction is unlawful everywhere.

Mandatory disclosures

Federal: the lead-based paint disclosure and pamphlet for any home built before 1978. State and city: a long list that varies, from mould and bedbugs to flood zones and the landlord's agent.

Tax when the landlord lives abroad

Is the rent taxed here

Yes. Rent from US property is US-source income. Without an election it is taxed at a flat 30 percent of gross rent with no deductions; with the real property election under section 871(d) it is taxed at graduated rates on net rent after expenses and depreciation, which is almost always better.

Withholding at source

Yes

Withholding rate

30 percent of gross rent, under IRS Publication 515, unless the landlord has elected net taxation and given the payer Form W-8ECI, after which no withholding applies and the landlord pays through a return.

Who withholds

Whoever pays the rent to the foreign owner: the property manager if there is one, otherwise the tenant, who must then register as a withholding agent.

What the tenant must register

The withholding agent files Forms 1042 and 1042-S each year and deposits the tax. A manager handles this routinely; an individual tenant rarely knows to.

How to reduce it

Form W-8ECI to the payer, backed by the election statement on the landlord's return, turns withholding off entirely. Tax treaties generally do not reduce tax on rent from immovable property.

Filing and tax ID

Form 1040-NR every year with an ITIN, applied for on Form W-7, reporting the rent on Schedule E; the state the property is in usually wants a return too. Selling triggers 15 percent FIRPTA withholding on the price.

VAT or GST on rent

No federal VAT or sales tax on residential rent. A few cities levy a tax on rent, and short-term lets attract hotel taxes.

Municipal and housing fees

Annual property tax to the county, often one to two percent of assessed value, paid by the owner, plus homeowners-association dues where they exist.

Money inside the country

How tenants pay

ACH transfer, Zelle, cheque or a property manager's portal. Cash is rare.

Currency of rent

USD

Bank account for a non-resident owner

A non-resident may open a US account in person at many banks on a passport and a US address or ITIN; otherwise the property manager collects into a trust account and wires the balance.

Paying rent to an overseas account

Allowed; the withholding rules apply regardless of where the money is sent.

Taking rent out of the country

No capital controls and no exit tax. Rent moves abroad by wire or a remittance service; nothing to declare on the US side beyond the tax return.

Owning property abroad from here

Buying abroad

No restriction. A US person may buy property anywhere the other country allows and move money out freely.

Reporting foreign assets and accounts

Foreign bank accounts over USD 10,000 in aggregate must be reported each year to FinCEN on the FBAR, and specified foreign financial assets on Form 8938 above its thresholds. Directly held foreign real estate is not itself reportable, but the account the rent lands in is.

Tax at home on foreign rent

Taxed. US citizens and residents are taxed on worldwide income wherever they live; foreign rent goes on Schedule E and foreign tax paid on it is credited through Form 1116.

Bringing rent home

No limit and no declaration for the transfer itself; the income was already reportable when earned.

Digital identity for e-signing

There is no national digital identity. Any e-signature platform the foreign side accepts does the job, or a notarised paper signature where the other country insists.

Sources

1. IRS Publication 515: withholding of tax on nonresident aliens (rents, the 30 percent rule, Form W-8ECI) — www.irs.gov
2. IRS Publication 519: U.S. tax guide for aliens (the real property income election) — www.irs.gov
3. IRS: FIRPTA withholding on the sale of U.S. real property by a foreign person — www.irs.gov
4. IRS: how to apply for an ITIN — www.irs.gov
5. IRS: instructions for Form 1040-NR — www.irs.gov
6. IRS: the foreign tax credit — www.irs.gov
7. IRS: Report of Foreign Bank and Financial Accounts (FBAR) — www.irs.gov
8. FinCEN: report foreign bank and financial accounts — www.fincen.gov
9. IRS: United States income tax treaties, A to Z — www.irs.gov
10. eCFR: 24 CFR Part 35 Subpart A, lead-based paint disclosure on sale or lease — www.ecfr.gov
11. GovInfo: Public Law 106-229, the Electronic Signatures in Global and National Commerce Act — www.govinfo.gov
12. Florida Senate: SB 264 (2023), interests of foreign countries in real property — www.flsenate.gov
13. USDA: Agricultural Foreign Investment Disclosure Act reporting portal — www.usda.gov
14. California Legislature: AB 12 (2023), security deposits capped at one month — leginfo.legislature.ca.gov
15. Income Tax Department of India: the India–USA tax treaty — www.incometaxindia.gov.in