Selling property in the UK as a non-resident: Complete guide
Read our comprehensive guide for non-residents selling UK property, including fees, taxes and timescales.
Planning to sell a property in the US? Perhaps you’re moving back to the UK, or selling an investment property.
Whatever your plans, you’ll need to know what’s involved in selling property in the US. This includes how to put your property on the market, what agents and legal experts you’ll need to work with and what fees and taxes are involved.
We’ll cover all of this and much more here in this comprehensive guide to US property sales.
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If it’s your first time selling a property in the US, you’ll need to get to grips with how the process works. It is a little different to the UK, so it’s worth doing all the research you can beforehand.
Let’s run through the main steps, so you know exactly what to expect.
Before you do anything else, it’s a good idea to get all the required documents together.
If anything is missing, it’s helpful to spot it early on so you can find a replacement or other solution - otherwise, it could cause delays in getting your house sold.
Here’s what documents you’re likely to need:¹
You might also want to get a pre-sale home inspection report, which will flag up any potential issues which may affect the value or buyer interest. You can then choose whether to do repairs or improvements in advance.
The next step is to find a real estate agent to market and sell the property.
You’re not required by law to use one, but it could be very helpful. A good realtor will have the expertise and knowledge of the local market to sell your property at a good price.
They can also handle lots of vital tasks on your behalf, such as:
In all parts of the US, all real estate agents must be licensed - so make sure you check this when choosing one.
Ideally, you’ll be able to get a personal recommendation from someone you know who has successfully sold a US property. You can also check theNational Association of Realtors (NAR) Directory to find a licensed agent.
Now it’s time to officially put your property on the market and advertise it to potential buyers.
It’s worth taking the time to prepare your property before photos are taken and definitely before viewings or open house events take place. This involves de-cluttering, deep cleaning and dressing each room so as to show off its best features.
Your estate agent will play a central role in advertising the property, which may include listing in on popular US property sites such as:
In some US states, it’s a requirement to appoint a real estate attorney to manage the legal aspects of property sales.
But even in states where it’s not mandatory, it’s still recommended to hire one. Your attorney will give you advice on your US property sale, and to oversee the legal and administrative aspects of the sale.
A personal recommendation is a good way to find a real estate attorney, but you can also search the American Bar Association’s directory.
Buyers can submit offers directly to you, but it could be easier if they go through your real estate agent. They can help you negotiate with buyers, make counter offers and agree on a final purchase price.
Once an offer has been accepted, it’s time for both parties to sign the purchase agreement. This is legally binding, and sets out the terms and conditions of the sale. The buyer may also pay a small deposit as a sign of commitment to the purchase.
Settlement is the term used to cover all the final steps needed to complete the transaction, which includes:
💡 Read more: Receiving money from abroad in the UK: a how-to guide |
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Your circumstances will have a lot to do with whether or not it’s the right time to sell your property in the US. For example, how much you originally paid for the property and what prices are currently like in the local property market.
But looking at the US property market in general, now or the near future could be a good time to sell.
Property prices in the US have increased nearly 3% year on year, and mortgage rates are dropping. This last part is important, as it could impact demand from buyers. Experts are predicting that 2025 could see further drops in mortgage rates, which should boost demand and make it easier to secure a sale and a good price for your property.²
On average, a typical US property tends to sell within 50 days, while the time it takes to reach closing is around 60 days.³
However, the time it takes to sell a property can vary based on a few factors, some of which may be beyond your control.
For example, the buyer may take longer than expected carrying out due diligence checks, or there may be an extra legal or other complication which takes time to resolve.
It may also depend on the asking price and how fast properties are selling in the local market.
In some US states, it’s a requirement to have a licensed real estate agent carry out the closing of home sales - or to carry out other essential legal work related to the sale. This includes Georgia, Alabama, Connecticut and Delaware, among others.⁴
But elsewhere, your realtor may strongly recommend that you appoint an attorney anyway. They can draw up documents, check over conditions of contracts, give you advice about the selling process and so much more.
This could make your property sale go more smoothly and crucially, help you avoid a costly mistake.
It’s not absolutely essential to have a US bank account in order to sell property in the country.
You may be able to use an international account or even your current account with a UK bank.
Another thing to note is that international transfers could get expensive, especially if the provider adds a margin to the exchange rate to convert your US dollars to British pounds. Consider checking out Wise to handle your international large transfers with mid-market exchange rates and low, transparent fees*.
So, how much will it cost you to sell property in the US in fees and taxes?
The first thing to know is that some costs will vary from state to state, so you’ll need to do some research into fees and taxes in the area your property is located in.
Here’s a quick look at average fees and taxes, to give you an idea of the costs involved:⁵
Tax/fee name | Rate/fee |
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Real estate agent commission | Around 3% of sale price |
Settlement fees | Around 1% |
Title fees | 0.5%-1% |
Transfer tax | 0.1%-3% |
Capital gains tax | Varies |
Legal fees | Varies |
💡 Read more: Best US dollar (USD) accounts in the UK |
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Estate agent fees in the US vary between agents and states, and they’re often negotiable too. On average, you can expect to pay commission of around 3% of the sale price as the seller.⁵
As the sale reaches completion, there are a number of different fees that need to be paid. The main one is a fee for escrow services, charged by the company responsible for handling the final paperwork and distributing funds to both parties. These closing fees are likely to amount to around 1% of the total sale price.⁵
In the US, it’s common for sellers to purchase title insurance policies. These offer protection if a problem arises with a title after the transaction has completed. Premiums for these policies vary, but are usually around 0.5% to 1%.⁵
In many states, transfer tax (sometimes known as excise tax) is due when the deed of a property is transferred to new owners. The seller usually pays this fee where it is due.
The rate of transfer tax varies between states, and is calculated based on the value of the property. However, some states don’t charge it at all, so you’ll need to do some research.⁵
When you sell a property in the US, you’ll need to pay capital gains tax (CGT) on the profit you make from it. So, the difference between what you paid for the property and what you sell it for, minus any fees and expenses.
The good news is that this tax only kicks in after a certain threshold. If you file your taxes as an individual, the first $250,000 USD of profit from your property sale is free from CGT. For couples who file taxes together, the exemption threshold is $500,000 USD. The rate of CGT varies.⁵
Complicating things further is the fact that the UK also has rules on capital gains tax when you sell property abroad.
If you’re a UK resident and sell a US holiday home, for example, you’ll need to pay the tax in the UK. However, you can potentially claim relief if you’re taxed twice, in both countries.⁶
Tax can be complex, so it’s best to get advice from a tax specialist before proceeding.
If you appoint a real estate attorney in the US, you’ll need to pay legal fees - these vary, and can be a fixed fee or an hourly rate.
For anyone considering moving to the US (or staying there if you’re a temporary resident), it’s useful to know about tax residency and how it relates to property ownership.
Owning a property doesn’t automatically make you a tax resident in the US. But how much time you spend living in the property does.
The US has two tests to determine whether someone is a tax resident. The first is the ‘green card test’, in which you’re classed as a tax resident if you have a green card (making you a permanent resident).
There’s also the ‘substantial presence test’, in which you’re classed as tax resident if you meet both of the following:⁷
Once the deal is done, you might need to work out the best way to transfer the proceeds from your US property sale back home to the UK if you don’t live in the US.
Here’s where Wise can help you save money and avoid those pesky hidden fees and exchange rate markups. Open a Wise account online and you can send money between the US and the UK for low, transparent fees* and great mid-market exchange rates.
Here’s an overview of the main benefits for using Wise: |
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Sources used:
Sources last checked on date: 19-Nov-2024
*Please see terms of use and product availability for your region or visit Wise fees and pricing for the most up to date pricing and fee information.
This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.
We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.
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