Buying property in the UK as a US citizen is not only legal, it is increasingly popular. With a stable real estate market, strong rental demand, and no restrictions on foreign ownership, the UK remains an attractive destination for American investors.
This guide explains the process clearly, outlines the taxes involved, and highlights common pitfalls to help you invest with confidence.
Can a US Citizen Buy Property in the UK?
Yes. The UK places no legal restrictions on foreign property ownership. You do not need UK residency or a visa to buy property.
Property ownership does not grant the right to live in the UK long-term without appropriate immigration status.
Step-by-Step: How to Buy UK Property as a US Citizen
Step 1: Budget for Purchase Taxes
As a non-resident investor, you will pay a higher purchase tax than UK residents. This tax is called Stamp Duty Land Tax (SDLT).
Because you are:
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a non-UK resident, and
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buying an investment property,
you will pay:
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Standard SDLT rates
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An additional 2 percent non-resident surcharge
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An additional 3 percent second-property surcharge
This can mean up to 5 percent extra tax compared with resident buyers.
Step 2: Hire a UK Property Solicitor
A UK solicitor (also called a conveyancer) will:
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Conduct legal searches
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Confirm the property’s title
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Manage and secure your deposit
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Transfer funds
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Register the purchase
They will also submit stamp duty to HM Revenue & Customs (HMRC) on your behalf.
Choose a solicitor who regularly works with overseas buyers.
Step 3: Open a UK Bank Account (Recommended)
A UK bank account is not mandatory, but it makes managing the investment much easier. It simplifies:
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Rent collection
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Property expenses
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Tax payments
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Mortgage payments
Many international investors use global banks such as HSBC or multi-currency financial platforms.
Step 4: Obtain a UK Tax Identification Number (UTR)
Before you receive rental income, you must register with HMRC to obtain a Unique Taxpayer Reference (UTR).
This number is required to:
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File UK tax returns
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Pay rental taxes
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Report capital gains if you sell
Step 5: Register for the Non-Resident Landlord Scheme (NRLS)
If you live outside the UK and rent property, you must register under the Non-Resident Landlord Scheme.
If you do not register, your letting agent must withhold tax from your rent before paying you.
If you do register, you may receive rent in full and pay your tax through your annual tax return.
Step 6: Choose a Property and Make an Offer
Once you select a property:
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Submit an offer through the agent
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Once accepted, your solicitor begins legal checks, including:
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Title review
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Flood risk
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Planning restrictions
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Lease terms for flats
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Step 7: Arrange Financing (If Needed)
US citizens can obtain UK mortgages, but:
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Deposits are higher
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Interest rates may be higher
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The approval process is stricter
Specialist lenders and global banks assist overseas borrowers.
Step 8: Exchange Contracts
At exchange:
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A deposit is paid
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The transaction becomes legally binding
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A completion date is set
Step 9: Completion and Registration
When completion occurs:
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The remaining funds are transferred
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The keys are released
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Ownership is registered with HM Land Registry
Taxes You Will Pay in the UK
Rental Income Tax
You must file a UK tax return each year.
You pay income tax on rental profit after allowable deductions, such as:
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Repairs and maintenance
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Insurance
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Property management fees
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Accounting and legal costs
Capital Gains Tax (If You Sell)
If you sell your property, you may owe UK capital gains tax on the profit earned since April 2015.
Current rates generally range between 18 percent and 28 percent.
US Tax Responsibilities
As a US citizen, you must report all worldwide income to the IRS, including UK rental profits.
However, under the US–UK tax treaty:
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You can usually claim a foreign tax credit
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You typically avoid being taxed twice on the same income
You may also need to file:
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IRS Schedule E
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IRS Form 1116 (Foreign Tax Credit)
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FBAR (foreign bank account reporting)
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FATCA Form 8938 (foreign asset reporting thresholds apply)
A tax professional familiar with US–UK cross-border rules is strongly recommended.
Common Mistakes to Avoid
Underestimating stamp duty charges
Failing to register under the Non-Resident Landlord Scheme
Buying leasehold property without review
Ignoring service charges and ground rent
Overlooking US reporting obligations
Using advisers unfamiliar with international tax rules
Final Thoughts
Investing in UK property as a US citizen is entirely achievable with the correct planning.
The most successful investors approach the process with clear financial modeling, professional legal support, and proper tax compliance in both countries.
Handed correctly, UK property can be a strong addition to a diversified investment portfolio.
