Buying Property as a Foreigner: Country Restrictions American Expats Actually Face

A $400,000 Condo That Isn't Quite Yours

An American who buys a $400,000 condo in Tulum or Playa del Carmen does not receive a deed the way a buyer in Ohio would. Because the property sits inside Mexico's constitutionally defined "restricted zone" — all land within 50 kilometers of any coastline and 100 kilometers of any international border — a foreign buyer cannot hold direct title ([Mexico Life, 2026](https://www.mexicolife.com/blog/buying-property-in-mexicos-restricted-zone-complete-faq-for-foreign-buyers.html)). Instead, a Mexican bank holds the title in a fideicomiso, a renewable 50-year trust, while the American holds full beneficial rights to use, lease, sell, and bequeath the property. Setting one up costs $2,000 to $3,000, plus $500 to $1,000 a year to the bank trustee for as long as the property is held.

This is the pattern across most popular expat destinations: outright bans on Americans owning property are rare. What varies — and what trips up buyers who assume U.S.-style fee-simple ownership applies everywhere — is the structure, the location, and the paperwork.

Where Land Ownership Is Off the Table Entirely

Several major expat destinations bar foreigners from owning land outright, while carving out a narrower path through condominium ownership.

**Thailand** prohibits foreign land ownership entirely. Under the Condominium Act, foreigners can buy condo units with full freehold title, but only up to a building-wide cap: foreign owners collectively cannot exceed 49% of a condominium building's total registered floor area ([Terms.Law, 2026](https://terms.law/Thai/property/condo-foreign-quota.html)). Once a building hits that ceiling, no more units can go to foreign buyers on a freehold basis, no matter the offer. Buyers must also prove the purchase funds were wired in from abroad in foreign currency, documented on a Foreign Exchange Transaction Form.

**The Philippines** goes further. The 1987 Constitution reserves land ownership for Filipino citizens and corporations that are at least 60% Filipino-owned. Section 5 of the Condominium Act (Republic Act 4726) creates the exception: because a condo unit is treated as personal property separate from the underlying land, foreigners can own units as long as foreign ownership across the entire project stays under 40% ([Respicio & Co., 2026](https://www.respicio.ph/commentaries/foreign-ownership-limits-in-philippine-condominium-units-under-ra-4726)). In a 100-unit building, that's a hard ceiling of 40 foreign-owned units. It's a per-project cap, not a per-buyer one — an individual American can own a unit outright, but once the building's foreign share hits 40%, the Register of Deeds won't process another foreign sale until Filipino ownership rises.

**Vietnam** liberalized its rules under the Housing Law 2023 and Land Law 2024, both effective August 1, 2024, but ownership is still capped and time-limited. Foreigners may own apartments in licensed, foreign-approved projects for a 50-year term, renewable once for another 50 years — 100 years total, not the indefinite ownership Americans expect at home. Foreign ownership within any single apartment building is capped at 30%, and no more than 250 landed houses may be foreign-owned within an area equivalent to one ward ([Vietcetera, 2026](https://vietcetera.com/en/can-foreigners-own-a-home-in-vietnam)).

Where the Restriction Is About Location, Not Nationality

**Panama's** constitution similarly blocks foreign ownership of titled land within 10 kilometers of its borders with Costa Rica and Colombia. Article 291 applies even to Panamanian corporations that hold any foreign capital — routing around the rule through a local company doesn't work ([Living In Panama, 2026](https://livinginpanama.com/panama-real-estate/panamas-10k-rule/)). Outside that 10-kilometer strip, foreigners have the same property rights as Panamanian citizens, with no residency requirement.

**Costa Rica** is more permissive but has its own carve-out. Its maritime zone law reserves the first 200 meters inland from the high-tide line: the first 50 meters is public land that no one can own, and the next 150 meters is a concession zone where foreign ownership is capped at 49% of the concession, unless the buyer has lived in Costa Rica for at least five years, in which case majority ownership becomes possible ([AEGIS Legal Partners, 2026](https://www.aegispartners.law/blog/maritime-zone-costa-rica-property)). A corporation holding coastal concession property must still be at least 50% Costa Rican-owned. Away from that 200-meter strip, Americans buy under the same rules as citizens.

The pattern in both countries: the restriction is about where a property sits, not whether an American can buy at all. A house six blocks from a Costa Rican beach faces entirely different rules than a house directly on it.

Where Entire Housing Markets Are Closed to Foreign Buyers

A newer trend — driven by domestic housing-affordability politics rather than historical land law — has closed off whole national housing markets to foreigners, regardless of location or property type.

**Canada's** Prohibition on the Purchase of Residential Property by Non-Canadians Act took effect January 1, 2023, barring non-citizens and non-permanent-residents from buying residential property, with an initial term set to expire January 1, 2025. On February 4, 2024, the federal government extended the ban to January 1, 2027 ([CIC News, 2024](https://www.cicnews.com/2024/02/canada-extends-foreign-home-buyer-ban-until-2027-0242824.html)). Violators face fines up to CAD $10,000 and can be ordered to sell the property. A narrow exception covers purchases outside Census Metropolitan Areas and Census Agglomerations, but a retiree looking to buy a lakeside cottage within commuting distance of Toronto does not qualify.

**Australia** hasn't banned foreign buyers outright, but has made existing homes largely unreachable. Foreign persons are barred from purchasing established (previously lived-in) dwellings from April 1, 2025 through June 30, 2029 — an extension of a ban originally set to expire in March 2027 — with an exception only for redevelopment projects that will add at least 20 new dwellings ([Herbert Smith Freehills Kramer, 2025](https://www.hsfkramer.com/notes/realestate/2025-posts/firb-update)). New construction remains open, but the government also tripled the foreign-investment application fee for established dwellings effective April 2024: for a property valued at AU$2 million or less, the fee jumped from AU$28,200 to AU$84,600 ([Yorkins Legal, 2024](https://www.yorkinslegal.com.au/post/2024firbchanges)). Combined with the outright 2025 ban, that fee now mostly applies to the narrow redevelopment exception rather than to ordinary buyers.

**New Zealand** has barred overseas persons from buying existing homes since 2018 under the Overseas Investment Act, and that prohibition remains fully in force. A narrow amendment — the Overseas Investment (National Interest Test and Other Matters) Amendment Act, in force since March 6, 2026 — lets holders of Active Investor Plus, Investor 1, or Investor 2 resident visas buy one home priced above NZ$5 million without first meeting the usual "ordinarily resident" test of 12 months' residence and 183 days' physical presence ([RNZ, 2026](https://www.rnz.co.nz/news/political/582054/what-changes-to-new-zealand-s-foreign-buyers-real-estate-ban-will-mean); [Bell Gully, 2026](https://www.bellgully.com/insights/overseas-investment-act-update-door-opens-for-investor-visa-holders-buying-residential-land/)). For a typical American buyer without an investor visa, the underlying ban on existing homes hasn't moved.

Where Ownership Is Capped by Size and Zone, Not a Quota

**Switzerland's** Lex Koller law, in force since January 1, 1985, doesn't ban foreign ownership so much as confine it tightly. A non-resident American without a Swiss residence permit can buy holiday property only in designated tourist municipalities, capped at 1,000 square meters of land and 200 square meters of living space, and cannot resell within five years of purchase ([UBS Switzerland, 2026](https://www.ubs.com/ch/en/services/guide/mortgages-and-financing/articles/lex-koller.html)). A primary residence in Zurich or Geneva is off-limits without a residence permit. One exception: the resort town of Andermatt was granted a government exemption from Lex Koller as part of a large redevelopment deal, letting Americans buy there without a permit, size cap, or resale wait — a status unique in Switzerland ([Prestige Consulting, 2026](https://www.consultprestige.com/andermatt-real-estate-lex-koller-exemption/)). Americans who obtain Swiss residency get largely the same property rights as citizens.

Where There's No Ownership Restriction — But the Fast Track to Residency Is Gone

Much of Europe, including Portugal and Spain, imposes no nationality-based restriction on foreign real estate buyers. The catch is that both countries recently closed the residency-by-purchase pathway that made buying there so attractive to Americans in the first place. Spain eliminated the real estate route from its Golden Visa program entirely on April 3, 2025, ending a 12-year-old scheme that had granted at least 14,576 residency permits through property purchases of €500,000 or more between 2013 and 2023 ([Idealista, 2025](https://www.idealista.com/en/news/property-for-sale-in-spain/2025/04/04/838966-end-of-an-era-spain-shuts-down-golden-visa-scheme-after-12-years)). Portugal moved first: its "Mais Habitação" law stripped both residential real estate purchases and the €1.5 million capital-transfer option from its Golden Visa in October 2023 ([Global Citizen Solutions, 2026](https://www.globalcitizensolutions.com/portugal-golden-visa-changes/)). Americans can still buy freely in both countries — they just need a separate visa strategy, such as Portugal's D7 passive-income visa, if relocation is the goal.

The US Tax Trap Hiding Inside Foreign Ownership Structures

The workaround that lets Americans buy in a restricted zone can create a separate U.S. tax problem. When the IRS first scrutinized Mexican fideicomisos, some advisors worried they would be treated as foreign trusts, triggering IRS Form 3520 and the more burdensome Form 3520-A — filings with penalties starting at $10,000 for missed deadlines. The IRS settled the question in Revenue Ruling 2013-14, issued June 6, 2013: a fideicomiso where the bank holds only bare legal title, with no independent authority over the property, is not a foreign trust for U.S. tax purposes ([American Citizens Abroad, 2026](https://www.americansabroad.org/fideicomiso-no-longer-considered-a-trust-by-the-irs)). The relief is conditional — if the bank does anything beyond passively holding title, such as managing funds to pay property taxes on the owner's behalf, the arrangement can still be treated as a trust and revive the Form 3520/3520-A filing requirement. Anyone using a fideicomiso, or any foreign entity to hold real estate, should confirm with a cross-border tax preparer exactly what the local bank or corporation is authorized to do beyond holding title.

Practical Takeaways Before Signing Anything

• **Confirm the zone before falling for a listing.** In Mexico, Panama, and Costa Rica, check whether a property sits inside the restricted, border, or maritime zone before making an offer — it changes the ownership structure and cost entirely.
• **Ask what percentage of the building is already foreign-owned.** In Thailand and the Philippines, get written confirmation of the remaining foreign quota from the building's registered management office, not the sales agent, before signing a reservation agreement.
• **Separate the purchase question from the residency question.** In Spain and Portugal, buying property no longer creates a path to a residence permit. Check current visa requirements independently of the real estate transaction.
• **Get the FIRB (or equivalent) approval cost in writing before making an offer** in Australia — an application fee north of AU$80,000 on a mid-priced established property changes the math considerably, on top of the outright 2025–2029 ban that covers most buyers.
• **Have a cross-border tax attorney review any trust, corporation, or nominee structure** used to hold the property, and confirm in writing whether it triggers Form 3520, Form 3520-A, or Form 5471 obligations at home.
• **Hire a local attorney who works for you, not the seller or developer**, in every jurisdiction above — title searches, zone confirmations, and quota checks are not something a sales agent is incentivized to volunteer.

Next Steps

Before wiring a deposit anywhere on this list, get two things in writing from an independent local attorney: the exact ownership structure available to a U.S. citizen at that specific address, and confirmation of any foreign-ownership quota already used at that building or in that zone. Then get a second opinion from a U.S.-based cross-border tax preparer on how that structure will be treated by the IRS. The restrictions themselves are rarely the trap — the trap is assuming a rule that applies in Lisbon also applies in Tulum, or that a rule from three years ago still applies today.