Foreign Investment in Real Property Tax Act
Selling US property as a foreign national
FIRPTA requires the buyer to withhold 15% of the gross sale price when the seller is a foreign person — regardless of whether you made a profit. Most sellers are owed a substantial refund, but only if the paperwork is right.
The most expensive misunderstanding
FIRPTA withholding is calculated on the gross sale price, not on your gain. Sell a property for USD 500,000 that you bought for USD 480,000 and USD 75,000 is withheld against a tax liability that may be a fraction of that. The money is recoverable — but only by filing a US return, which requires an ITIN.
The sequence that matters
- 01
Before completion
Apply for an ITIN if you do not have one, and consider a Form 8288-B withholding certificate to reduce the amount held back at closing.
- 02
At completion
The buyer or settlement agent withholds 15% of the gross sale price — not of your profit — and remits it to the IRS on Forms 8288 and 8288-A.
- 03
Within 20 days
Forms 8288 and 8288-A must reach the IRS. You should receive a stamped copy of Form 8288-A as evidence of the tax withheld.
- 04
After the tax year ends
File Form 1040-NR reporting the actual gain, claim the withholding as a credit, and recover the overpayment.
How we help
- ITIN applications for every seller on the title, prepared and tracked to issue
- Form 8288-B withholding certificate applications before completion, to reduce the cash held back
- Liaison with the settlement agent, attorney or title company on the withholding documents
- Form 1040-NR preparation with Schedule D, depreciation recapture and state filings
- Chasing the IRS where a refund or stamped Form 8288-A has not arrived
Already had 15% withheld on a US sale?
We can check whether a refund is due and how quickly it can be claimed.