What is FIRPTA?
Foreign Investment in Real Property Tax Act, abbreviated FIRPTA, is the Internal Revenue Service (IRS) regulation that allows the United States to withhold and tax foreign sellers on dispositions of U.S. Real Property interests. The current rate comprises 0%, 10%, 15% of the selling price. This is not a tax, it is a withholding to ensure you file and pay your taxes.
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Try our easy-to-use FIRPTA calculator to determine how much tax will be withheld, how much you can get back, and how much you will pay in taxes.
Withholding Rates
| Withholding % | 0% | 10% | 15% |
|---|---|---|---|
| Purchase Price < $300k For Buyer Personal Use |
X |
||
| Purchase Price < $300k Not For Buyer Personal Use |
X |
||
| Purchase Price > $300k but < $1,000,000 For Buyer Personal Use |
X |
||
| Purchase Price > $300k but < $1,000,000 Not For Buyer Personal Use |
X |
||
| Purchase Price > $1,000,000 |
X |
Withholding rate is 0%, if both of the following two conditions are met.
- The purchase price is under $300,000.
- The buyer signs a personal-use affidavit stating they have definite plans to reside at the property. This must include at least 50% of the total days that the property will be used by any person during the first two years of ownership. When calculating the total number of days in use, do not count time when the property will be vacant.
Withholding rate is 10%, if both of the following two conditions are met.
- The purchase price is over $300,000, but under $1,000,000.
- The buyer signs a personal-use affidavit stating they have definite plans to reside at the property. This must include at least 50% of the total days that the property will be used by any person during the first two years of ownership. When calculating the total number of days in use, do not count time when the property will be vacant.
In all other cases, the withholding rate is 15%.
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For more information, please watch our video about FIRPTA.
