Foreign Nationals (FIRPTA)
The sale of a U.S. real property interest by a foreign person is subject to the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA) income tax withholding. FIRPTA authorized the United States to tax foreign persons on the sale of U.S. real property interests.
Contrary to popular belief, FIRPTA regulations require that the Buyer comply with said regulations. This makes the Buyer responsible for the withholding of funds from the Seller’s proceeds when a U.S. real property is purchased from a foreign person.
- The total amount required to be withheld at the time of closing, is 15% of the gross purchase price of the property.
- If the purchase price is $300,001 to $1,000,000 and the Buyer has definite plans to reside in the property, the 15% can be reduced to 10%.
- No withholding is required if the final purchase price is $300,000 or less and the Buyer will reside in the property 50% of the time it is in use during each of the first two 12-month periods following the date of transfer.
- If the purchase prices is over $1,000,000 the full 15% is required regardless of the Buyer’s occupancy declaration.
Miami Dade
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