Property Buyer's Guide

Buying Property in United States: What It Actually Costs

Whether you're buying your first investment property or expanding your portfolio, understanding all the upfront and ongoing costs is essential. This guide walks you through every tax, fee, and expense you can expect — so there are no surprises on transfer day.

Last updated: 21 April 2026

Quick answer

The US has no federal transfer tax — rates range from 0% (Texas, Arizona) to 2.5% (Delaware), with city surcharges in places like NYC and San Francisco.

Budget 8–10% above the purchase price for taxes and fees when buying property in United States. The calculator below gives you an exact figure for your situation.

The US has no federal transfer tax. Rates vary by state and locality. This estimate uses a ~0.1% national average.

Rates vary by region. United States has 20 regions with different Transfer Tax rates. The rates shown below are the national default. Select your specific region in the calculator for accurate rates. See our full regional breakdown for details.

Transfer Tax rates vary depending on the property type, buyer classification, and region. Use the calculator for an exact estimate.

More calculators

Full ROI calculator Track property Transfer tax by state

On top of the transfer tax, there are several legal and administrative fees that you need to budget for. Here's what to expect.

Transfer / conveyancing fees

These fees apply whether you're paying cash or taking out a bond.

Title Insurance
Combined lender's and owner's title insurance policies
0.50% of value
Home Inspection
Pre-purchase inspection of the property condition
$400.00
Escrow / Settlement Fee
Fee charged by the escrow or settlement company
$750.00
Attorney Fee
Real estate attorney fee (required in some states)
$1,000.00
Recording Fees
County/local government fee to record the deed and mortgage
$175.00

Bond registration fees (only if you're taking a bond)

If you're financing your purchase with a home loan, the bank's bond also needs to be registered at the Deeds Office. These are the fees for that process.

Appraisal Fee
Independent property appraisal required by lender
$550.00
Loan Origination Fee
Lender fee for processing the mortgage application (0.75% of loan)
0.75% of value

Agent Commission

Total real estate agent commission, typically 5–6% of the sale price. Post-2024 NAR settlement, the buyer's agent fee may be separately negotiated. Commission is traditionally paid by the seller from proceeds.

Paid by: seller
Sales Tax applies: No
Typical rates:
Residential: 5.5%Apartment: 5.5%Commercial: 6.0%Airbnb: 5.5%

The purchase price is just the beginning. As a property owner in United States, you'll have recurring costs that eat into your rental income. Knowing these upfront helps you model realistic returns.

  • Property Tax
    Annual property tax assessed by the local government. National effective rate is ~0.9% of assessed value, but ranges from 0.27% (Hawaii) to 2.23% (New Jersey).
    per year
    Typically escalates ~2% per year
  • HOA Fees
    Monthly homeowners association fees, if applicable. National median ~$250/mo for single-family homes.
    per month
    Typically escalates ~3% per year
  • Homeowner's Insurance
    Annual homeowner's insurance premium. National average ~$2,500/year. Ranges from $1,000–$5,000+ depending on state and coverage.
    per year
    Typically escalates ~3% per year
  • Maintenance Reserve
    Annual maintenance and repair budget. Rule of thumb: ~1% of property value per year.
    per year
    Typically escalates ~3% per year

Additional costs for Condo / Apartment properties

  • HOA / Condo Fees
    Monthly HOA or condo association fees covering common area maintenance, insurance, and amenities. National average $300–$600/mo for condos.
    Charged per month

Don't forget escalation: Most recurring costs increase every year. Budget for 3–6% annual increases on rates, insurance, and maintenance. The ROI calculator lets you set a custom escalation rate for each expense.

United States taxes capital gains at separate, lower rates than ordinary income. If you hold the property for more than 12 months, you qualify for long-term rates — which are significantly lower than short-term rates.

Long-term capital gains rates

Your income levelCGT rate
Low Income0%
Middle Income15%
High Income20%

Primary residence exclusion: If you lived in the property as your main home for at least 2 of the past 5 years, up to $250,000.00 of your gain may be completely tax-free. Married couples filing jointly may qualify for a higher exclusion — always confirm with a tax advisor.

Other taxes when you sell

Depreciation Recapture
25.0%

Estimated tax on accumulated depreciation for rental/investment property. Taxed at 25% on the capital gain as an approximation (actual basis is depreciation claimed). Does not apply to primary residences.

Does not apply to: residential

Net Investment Income Tax (NIIT)
3.8%

Additional 3.8% surtax on net investment income for taxpayers with MAGI above $200K (single) or $250K (married). Applied to the full capital gain as an estimate.

When you eventually sell, there are costs that come out of your sale proceeds before you see the cash. Here's what to factor in when modelling your exit.

Agent Commission
Real estate agent commission. Typically 5-6% of sale price.
5.5%
Pre-Sale Costs
Pre-sale repairs, staging, and preparation costs.
$2,000.00

Good news: Foreigners can freely buy property anywhere in the United States — there are no restrictions on foreign ownership of real estate.

However, there are some important tax and financing differences to be aware of:

  • 1 You'll need an ITIN: An Individual Taxpayer Identification Number is required to file US tax returns on rental income and capital gains. Apply via IRS Form W-7 before or shortly after your first purchase.
  • 2 FIRPTA withholding when you sell: Under the Foreign Investment in Real Property Tax Act, the buyer withholds 15% of the sale price when purchasing from a foreign seller. This is a deposit against your US tax liability — you claim it back (or pay any difference) when you file your US tax return.
  • 3 Consider an LLC: Many foreign investors buy through a US LLC for liability protection and simplified tax filing. There are setup costs, but it can make ongoing compliance much easier — especially if you own multiple properties.
  • 4 Financing options: Most conventional mortgages (Fannie Mae / Freddie Mac) are unavailable to foreign nationals. Look at DSCR loans instead — these are approved based on the rental income of the property, not your personal income or credit score.
Tax treaties matter: If your home country has a tax treaty with the US, it may reduce withholding rates on rental income and impact how your gains are taxed. Speak to a US tax advisor who specialises in foreign investors.

Different property types come with different income potential, vacancy assumptions, and cost profiles. Here's how the main types compare in our calculator defaults for United States.

Residential
Agent commission
5.50%
Vacancy rate
7%
Rent escalation
3.5% p.a.
Condo / Apartment
Agent commission
5.50%
Vacancy rate
7%
Rent escalation
3.0% p.a.
Extra costs: HOA / Condo Fees
Commercial
Agent commission
6.00%
Vacancy rate
8%
Rent escalation
3.0% p.a.
Airbnb / Short-Term Rental
Agent commission
5.50%
Vacancy rate
25%
Rent escalation
3.5% p.a.

Explore Other Markets

Comparing property investment across countries? These guides cover the same detail — transfer taxes, closing costs, ongoing expenses, and capital gains tax.

Canada (Ontario) England Australia (NSW)

Our free calculator puts all of these costs together in one place — transfer duty, closing fees, ongoing expenses, bond repayments, and your projected exit return. Takes about 2 minutes.

Use the free United States ROI calculator →