A US citizen can pass on $15 million before the federal estate tax touches a dollar. A Gulf investor who holds US property in their own name can pass on just $60,000 — and everything above it is taxed up to 40% on death, with no Gulf treaty to soften the blow. It is the most expensive detail in US real estate, and the one almost no American broker mentions. Here is exactly how it works, what it costs, and how it is fixed.
By Umer Shauket, Founder & CEO, Cresco Real Estate — 20+ years, 2,580+ transactions.
This is not a loophole or an edge case. It is the default outcome for a Gulf national who buys a US home or apartment the obvious way — in their own name. The tax is triggered by death, paid by the estate, and due before the heirs can sell or transfer the property. Understanding it before you buy is the difference between an investment and a liability you hand to your family.
The US federal estate tax applies to assets located in the United States when the owner dies. How much is exempt depends entirely on who you are:
That is not a typo. The exemption for a non-resident is roughly 0.4% of the exemption a US person enjoys. Everything above the $60,000 threshold is taxed on a graduated federal schedule that climbs quickly to a top rate of 40%. The rules that produce this are IRS estate-tax provisions for “non-resident aliens,” and US real estate sits squarely inside them.
Not all foreign-owned US assets are treated the same. Some — certain bank deposits, some portfolio holdings — can fall outside the US estate tax. Directly-held US real estate never does. Property has a fixed physical location, so its “situs” is always the United States, and it is always caught. A Gulf buyer who takes title to a Miami condo or a New York apartment in their personal name owns the single most exposed asset class in the US estate-tax system.
Put numbers on it. These are illustrative — the graduated schedule and your specific facts matter — but they show the scale:
And here is the part that turns a tax into a crisis: the estate tax is generally due within nine months of death, and the property often cannot be sold or retitled to the heirs until it is dealt with. A family can inherit a valuable US apartment and be unable to touch it until they have found several hundred thousand dollars in cash. That is the trap in the title.
The United States softens this outcome for residents of a handful of countries through estate-tax treaties. There are about fifteen: Australia, Austria, Canada, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Japan, the Netherlands, South Africa, Switzerland and the United Kingdom.
No Gulf state is on that list. Not the UAE, not Saudi Arabia, not Qatar, not Kuwait, not Bahrain, not Oman. A British or German investor gets meaningful treaty relief; a Gulf investor gets the bare $60,000 exemption and nothing more. For the exact audience Cresco serves, this is the worst-treated position in the entire system — which is precisely why it deserves its own page rather than a footnote.
The good news is that this is a solved problem — for buyers who deal with it in advance. The core idea is to stop owning US-situs real estate directly and instead own something that is not US-situs.
The most common approach is to hold the US property through a foreign corporation (sometimes a foreign-corporation “blocker” over a US entity). When you die, you do not own US real estate — you own shares in a foreign company, and those shares are generally outside the US estate tax. The $60,000 problem disappears.
Two honest caveats, because this is exactly where bad advice costs people money:
Cresco is not a tax firm and does not give tax advice. What we do is make sure this conversation happens before you sign — because retrofitting a protective structure onto a property you already own directly can trigger transfer taxes and capital-gains events that a pre-purchase structure avoids entirely.
The US is a genuinely attractive market for Gulf capital — deep, liquid, dollar-denominated, with strong legal protection for owners. None of that is in question. What is in question is how you hold it. Buy a US property in your own name and you have quietly written your family a bill of hundreds of thousands of dollars, payable at the worst possible moment. Structure it correctly before you buy and the same property passes cleanly. The asset is the same; the difference is entirely in the paperwork you do first. That is the kind of detail a firm that sits on both sides of this trade exists to catch — and the kind a transaction-hungry broker will let you walk straight past.
Only $60,000 of US-situs assets. A US citizen or green-card holder has a 2026 exemption of $15 million; a non-resident gets just $60,000, with the balance taxed up to 40% on death. Because US real estate is always US-situs, a directly-held property is almost fully exposed.
No. The US has estate-tax treaties with about 15 countries — all Western nations plus Japan and South Africa. No Gulf state is on the list, so UAE, Saudi, Qatari, Kuwaiti, Bahraini and Omani buyers get no treaty relief and fall back on the $60,000 exemption.
Illustratively, roughly $700,000 or more on the owner's death — about $1.94 million is taxable after the $60,000 exemption, on a schedule reaching 40%. A $1 million property could owe over $300,000. Illustrative, not advice; consult a cross-border estate advisor.
Often, yes — but not a US LLC on its own. Holding the property through a foreign corporation can convert US-situs real estate into non-US-situs shares, generally outside the US estate tax. These structures are complex, have income-tax trade-offs, and must be set up before purchase with a qualified advisor.
Before. Structuring is far cheaper and cleaner pre-purchase; unwinding a directly-held property afterwards can trigger transfer costs and tax. The estate-tax question belongs in the first conversation, not the closing.
Sources: IRS estate-tax rules for non-resident aliens; 2026 estate & gift tax figures for non-US persons (non-resident exemption $60,000; US-person exemption $15,000,000; top rate 40%) — Skatoff, P.A. and Creative Planning International, 2026. US estate-tax treaty country list per Creative Planning International. Figures are illustrative market and tax data, not tax or legal advice — Cresco is not a licensed tax advisor; consult a qualified cross-border estate professional for your situation.
Dubai head office. West Hollywood office serving Beverly Hills, Bel Air, Holmby Hills and the Sunset Strip. One team, both sides of the trade — including the US estate-tax conversation before you buy, not after.