by Michele Lawrie·
· 12 min read
Yes, you can buy a home in the United States as a Chinese or Hong Kong citizen with no restrictions imposed by the US government. Furthermore, there are no limits on foreign nationals purchasing real estate in the United States. You can even apply for a mortgage as a non-citizen in America, with no US credit history, if you need one.
Many Chinese and Hong Kong nationals may find this an intriguing option because of the relatively cheaper housing prices in the United States (compared to metro areas of other western countries) and the availability of coastal area properties in many country locations. However, the property market in the United States differs significantly from one place to the next.
Therefore, you’ll want to look into the property prices and market trends in the state and city you’re thinking about purchasing a property. In addition, housing accounts for a significant amount of most Americans’ household spending, so you’ll want to be sure you’re getting the most value for your buck.
Table of Contents
- Can Chinese or Hong Kong citizens buy property in the USA?
- How much US real estate is purchased by the Chinese (including Hong Kong) every year?
- 5 Reasons Why Chinese and Hong Kong citizens buy Property in the USA
- Where do Chinese and Hong Kong nationals buy real estate property in the United States (US)?
- How do the Chinese and Hong Kong nationals intend to use their US property?
- How does home prices in the US compare to China and Hong Kong?
- What is the median and average price of house purchases in the United States by Chinese and Hong Kong nationals?
- Step by step process for Chinese and Hong Kong citizens to buy property in the US
- Can Chinese and Hong Kong citizen obtain a mortgage home loan in the USA?
- Tax Implications for Chinese investors purchasing real estate in the United States
- What kind of properties are excluded from the FIRPTA regulations?
- In Conclusion
- Frequently Asked Questions (FAQs)
In recent years, an increasing number of foreigners, notably from Asian nations such as China and Hong Kong, have made significant investments in the US real estate market. However, before entering the US real estate market, you must first get your feet wet by learning about local buying rules, taxes, and purchasing procedures.
For someone unfamiliar with the US real estate process, the process of purchasing property might be overwhelming. Likewise, buying property in the United States from China or Hong Kong may appear to be a daunting task.
As a result, many Chinese and Hong Kong investors are wary of overseas markets because of their insecurity and the start of an unknown process. However, buying US real estate is a great investment and this article will look at the primary considerations a Chinese and Hong Ko should make while conducting cross-border real estate transactions in the United States.
How much US real estate is purchased by the Chinese (including Hong Kong) every year?
According to the National Association of Realtors (NAR), China (includes Hong Kong) emerged as the top country of origin among foreign buyers in 2021, accounting for 8% of all foreign buyer purchases in terms of dollar volume of existing home purchases in the United States.
In 2021, Chinese buyers purchased 6,300 existing housing units worth $4.5 billion, a decrease of 66 percent in terms of the number of units (18,300 units last year) and 61 percent in terms of dollar volume ($11.5 billion the year before). The majority of this decrease can be attributed to Covid-19-related travel restrictions.
Between 2010 and 2021, Chinese buyers of US real estate have purchased an average $18 billion per year of US property, with a total of 27,000 units purchased each year. This makes the Chinese (includes buyers from the People’s Republic of China and Hong Kong) the largest foreign real estate investors in the United States.
As of 2022, China remained the biggest foreign buyer in terms of the dollar amount of residences purchased. However, due to the increase in average purchase price to $1.0 million (from $710,400 in the prior period), Chinese purchased existing residences worth $6.1 billion, went up 30% from the prior period.
Thefollowingtableshowshistoricaldollarvolumeandquantityofexisting home purchasesbyChinese nationalsintheUnitedStates:
Table of Historical Trend for US Existing Home Purchase by Chinese (includes Hong Kong)
| Year | # Units | $ (in Billions) |
| 2010 | 27,100 | $11.20 |
| 2011 | 19,000 | $7.00 |
| 2012 | 24,700 | $12.00 |
| 2013 | 23,100 | $12.80 |
| 2014 | 38,400 | $22.70 |
| 2015 | 34,300 | $28.50 |
| 2016 | 29,200 | $27.30 |
| 2017 | 40,600 | $31.70 |
| 2018 | 40,400 | $30.40 |
| 2019 | 19,900 | $13.40 |
| 2020 | 18,400 | $11.50 |
| 2021 | 6,300 | $4.50 |
| 2022 | 6,100 | $6.1 |
Pro Tip: When you are ready to buy a house in the US, you should ideally work with a real estate agent who has expertise in working with foreign national clients, such as a real estate agent withCIPSdesignation.
A CIPS (Certified International Property Specialist) real estate agent has undergone specialized training to handle real estate transactions smoothly for foreign-born individuals residing in the US.
Find the best real estate agent with international expertise
Connect with a local US real estate agent(s) with CIPS designation
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5 Reasons Why Chinese and Hong Kong citizens buy Property in the USA
China remains one of the largest investors in the US real estate due to the following reasons:
1. Opportunity to Send their Children to the Best Universities in the World
Three-quarters of the world’s leading universities are located in the United States. For this reason, many wealthy Chinese parents strive to give their children a leg up in life by purchasing a second home in the United States, where their children can obtain residence and attend college.
More than 80% of China’s wealthiest people are included in this group. The expanding scope of Chinese real estate investments is evidence of this. For example, between 2020 -21, Chinese real estate investment accounted for 13% of student use of all home purchases in the United States.
2. Stable and Secure Real Estate Investment
China is experiencing a property bubble concerns, which was further heightened by the Evergrande issue. In contrast, US real estate investment is relatively stable and secure investment coupled with capital appreciation in USD. In addition, the EB-5 Visa program in the United States rewards larger and more prominent real estate investments for Chinese investors eager to create jobs. Chinese nationals currently account for nearly three-quarters of all EB-5 visa holders in the United States.
The legal framework and no restrictions for foreign real estate investors in the United States makes the real estate investment so appealing. As a result, the United States ranks first in the world for real estate investors. Chinese investors have already invested more than $200 billion in real estate ventures in the United States in last 10 years.
3. APathtoCitizenship
For investors, the EB-5 visa can be utilized to obtain a green card. One of the reasons why many Chinese investors prefer American real estate (for commercial purposes) is because it provides a viable path to citizenship, particularly for high-net-worth individuals.
4. Favorable Debt Terms & Mortgage Financing
US lenders specializing in foreign national mortgages offer long-term fixed-rate mortgages at low and competitive rates for non-residents (with no US credit) and US Newcomers on visas from China and Hong Kong.
This makes the investment in US real estate even more attractive.
US Mortgages for Foreign Nationals & Expats
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5. High-Quality Real Estate with Relatively Lower Prices
You can generate positive cash flows (after paying for your mortgage) in the US real estate market, making it a highly desirable investment. In addition, the property prices in the US are comparatively cheaper than central areas of other global cities, an icing on the top!
Where do Chinese and Hong Kong nationals buy real estate property in the United States (US)?
California remained the top destination for the Chinese, with 34% of all Chinese purchases last year (April 20- March 21) taking place in the state. That said, other popular destination includes Georgia (10%), New York (8%), Michigan (8%), Tennessee (5%), Oklahoma (4%), New Hampshire (4%), Texas (4%).
Major US Destinations for Foreign Buyers from China and Hong Kong
| US Destination | Percentage of Chinese Buyers |
| California | 34% |
| Georgia | 10% |
| Michigan | 8% |
| New York | 8% |
| Tennessee | 5% |
| Texas | 4% |
| Hampshire | 4% |
| Oklahoma | 4% |
85% of Chinese buy their US property in an Urban/central city or suburban area, while the remaining 15% purchase in rural or resort areas.
How do the Chinese and Hong Kong nationals intend to use their US property?
TheChinesebuyerswerethemostlikelytobuyahomeforaprimary residence (40%), vacation& rental (9%), residential rental (16%), vacation home (8%), and student use (13%),accountingforofalltheir home purchasesintheUnitedStates.
US Property Use by foreign buyers from China and Hong Kong
| Intended Property Use | Percentage (%) |
| Vacation Home | 8% |
| Vacation and Rental | 9% |
| Student Use | 13% |
| Rental residence | 16% |
| Primary residence | 40% |
| Don’t Know | 6% |
How does home prices in the US compare to China and Hong Kong?
Home prices in many US metro areas are pretty modest compared to major regions of worldwide cities. For example, you will pay on average USD 11,829 per sq. meter for a home in Shanghai (China) and an average of USD 28,570 for a home in Hong Kong, compared to per sq. meter price of $7,180 in San Francisco (California), $2,660 in the Miami Area (Florida), $1,940 in Orlando (Florida), $3,070 in NY metro areas, $2,620 in Austin (Texas), etc.
The following is a list of significant US metro cities’ median home prices and per square meter pricing:
BetweenApril2020andMarch2022,themedianpriceofUSrealestatepurchasedbythe Chinese (including Hong Kong)was $476,600,withanaverage purchasepriceof$1,005,700.
The median purchase price was up 6%, while the average price was up by 14% compared to the same period last year.
Table of historical trend for Median and Average Purchase Price of US Real Estate by China and Hong Kong
| Year | Median Purchase Price | Average Purchase Price |
| 2010 | $ 320,800 | $ 412,200 |
| 2011 | $ 282,100 | $ 370,900 |
| 2012 | $ 333,300 | $ 484,000 |
| 2013 | $ 412,500 | $ 555,900 |
| 2014 | $ 516,400 | $ 590,800 |
| 2015 | $ 486,100 | $ 831,800 |
| 2016 | $ 542,100 | $ 936,600 |
| 2017 | $ 529,900 | $ 781,800 |
| 2018 | $ 439,100 | $ 752,600 |
| 2019 | $ 454,900 | $ 674,900 |
| 2020 | $ 449,500 | $ 622,300 |
| 2021 | $ 476,500 | $ 710,400 |
| 2022 | $ 470,600 | $ 1,005,700 |
Step by step process for Chinese and Hong Kong citizens to buy property in the US
If you are unfamiliar with the real estate purchase process in a new country, buying a house in a foreign country can be a challenging endeavor. However, if you take the time and effort to educate yourself, it can also be a fascinating experience.
The home buying process in the United States involves the steps below (for details of each stage listed below, please see our blog post on how to buy a house in the U.S. as a foreign national.
- Choose where you wish to buy a house in the United States.
- Find a real estate agent who has handled international transactions before, especially with a specialist accreditation like CIPS (Certified International Property Specialist). CIPS designated real estate agents are trained to work with foreign clientele, including both Chinese and Hong Kong residents living in the United States and non-resident Chinese looking to acquire real estate in the United States.
- Understand how to work with a Real Estate Agent in the United States.
- Understand your cross border tax situation
- Begin your house search with the help of the real estate agent.
- Make an offer on a house you like and finalize your American dream home.
- Inspect the Property
- Make a purchase agreement with the seller.
- Complete Title Report
- Obtain Home financing through a U.S. Mortgage for foreign nationals (if needed)
- Take possession of your new home in the United States.
Find the best real estate agent with international expertise
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Keep the following simple recommendations in mind if you’re considering buying a rental property in the United States to produce rental income (or to utilize as a rental property and vacation home).
5 tips for Chinese purchasing rental property in the United States
- Study the rental market in the area where you want to buy. Knowing how much rental income your home can bring in will help you make a more informed decision about which type of investment is right for you.
- If you intend to utilize your investment property as a vacation home, be aware of peak season and rental demand during certain months so you can fit in your ideal holiday in the United States.
- Hire a reputable property management company to look after your investment while you are away.
- Work with a CIPS (Certified International Property Specialist) designated real estate agent with experience with international transactions.
- Don’t forget about taxes and insurance:If you’re looking for a return on your investment in a U.S. property, be sure you understand the tax implications of capital gains (when you sell the investment property) as well as taxes owing on rental income in the U.S. You must additionally pay the property tax on your property in the United States.
Can Chinese and Hong Kong citizen obtain a mortgage home loan in the USA?
Between April 20 and March 21, 40% of Chinese buyers in the United States paid in cash. However, did you know that Chinese people can receive a mortgage in the United States at competitive rates even if they have no US credit history!
You can take advantage of low mortgage rates in the United States and put your cash to work for other assets. So, whether you’re buying a home in the United States to live in, invest in, or use as a holiday home, mortgage solutions without US credit history are available at competitive rates to match your needs.
US Mortgages for Foreign Nationals & Expats
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These are US mortgage lenders specializing in foreign national mortgage products and analyzing your credit risk using non-traditional data points, such as your credit history outside the US. These lenders may also consider your rental income in the United States when determining your eligibility for a mortgage in the United States.
Most foreign national mortgage product options in the United States will require a minimum down payment of 25-30 percent of the purchase price if you don’t have an established US credit history. Getting a mortgage in the United States eliminates the risk of foreign exchange rate fluctuations in your mortgage payments and gives you peace of mind.
The mortgage home loan procedure in the United States involves the steps listed below (For a complete explanation of each step listed below, please see our comprehensive guide for foreign nationals to secure US mortgage loans without US credit history):
- Calculate your budget and the amount of money you’ll need to finance to purchase a house.
- Obtain a Loan Pre-approval from your lender for your foreign national mortgage
- Prepare your documentation for a house loan from a foreign country.
- Makeanofferonyourhome.
- Complete your application for a foreign national mortgage loan.
- As mortgage rates in the United States change daily, it’s a good idea to lock in your interest rate.
- Process and underwrite your mortgage loan in the United States.
- Conduct property appraisal.
- Get ready to close your mortgage home loan.
Tax Implications for Chinese investors purchasing real estate in the United States
A foreign person (non-resident buyer) is subject to US tax on US source income, including income from the property, according to the IRS (Internal Revenue Service).
A foreign person’s income earned in the United States is taxed at 30 percent, according to the Internal Revenue Code. However, if a provision of the Internal Revenue Code offers a reduced rate or if the foreign person’s country of residency and the United States have a tax treaty, a lower rate, including an exemption, may apply. Non-residents of the United States can also choose to have their rental income taxed as if it were actively connected to a trade or business in the United States.
In such situations, taxpayers may deduct any expenses incurred while renting the property from their rental income and are taxed on their net rental income, including cost deductions, rather than a 30% flat rate on gross rent. To avoid being taxed 30%, a taxpayer must fill out form W-8ECI and submit it to the individual who is paying the rent.
Tax compliance for Chinese selling US property
If a non-resident of the United States sells real estate in the United States, FIRPTA (Foreign Investment in Real Property Tax Act) imposes a 10% or 15% withholding tax on the gross selling price.
If the property is sold for more than $300,000 but less than $1,000,000 and the buyer plans to live there, the buyer will only have to pay 10% withholding rather than 15%. If the sale results in a capital gain, you will owe US taxes, which FIRPTA tax withholdings will offset.
What kind of properties are excluded from the FIRPTA regulations?
You will be excluded from FIRPTA withholdings if the non-US resident’s property is sold for less than $300,000 to a buyer who plans to use it for use as a residence.
According to the IRS, the buyer or a member of the family must intend to live in the property for at least half of the number of days any person uses it over the first two 12-month periods after the date of transfer.
Furthermore, any capital gain on the sale of a US property is taxable, and the non-resident foreigner must file a tax return (1040NR).
In Conclusion
Buying a home is an overwhelming undertaking no matter where you live, but as an overseas buyer in the United States, the process can be confusing if you don’t have the right guidance and work with the right experts. Therefore, we’ve included some crucial information and items to bear in mind in this article to assist you in buying your American property more smoothly.
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Frequently Asked Questions (FAQs)
Can Chinese or Hong Kong Citizens buy a house in the US?
Yes, Chinese citizens can buy a house in the US. There are no restrictions on foreigners buying property in the US, and there is a large and vibrant market for people looking to invest in US real estate. In addition, the process of buying a house in the US is relatively straightforward, and there are many resources available to help foreign buyers navigate the process.
Why do Chinese invest in US Real estate?
Chinese investors have been increasingly active in the US real estate market in recent years. There are a number of reasons for this trend. First of all, US real estate is seen as a safe investment, as it is relatively stable and has a long history of appreciation. In addition, US real estate offers good returns, particularly in comparison to other investment options in China. And finally, Chinese investors perceive the US legal system as being more reliable than the Chinese system, which gives them greater peace of mind when investing in US real estate.
Can Chinese or Hong Kong citizens obtain US mortgage?
Yes, Chinese or Hong Kong citizens can obtain a US mortgage. There are many reasons why someone might want to purchase a property in the United States, whether it’s for investment purposes or to live in. The process of obtaining a mortgage is similar for foreign citizens as it is for US citizens.
About the author:
Michele Lawrie is the Chief Real Estate Officer at HomeAbroad and has worked as a real estate professional for the past 14 years,helping domestic and foreign national clients navigate the home buying and selling process.
She is passionate about real estate and strives to educateread more...
