Foreign Sellers

Foreign Buyers have the ability to own real estate property in the United States. However, if you decide to sell your property, as a foreign Seller, you are subject to a 10% withholding (of the Gross Sales Price) unless the transaction is exempt from Foreign Investment in Real Property Tax Act (FIRPTA) witholding.
Most Common Exemption:
 
  • Sales Price is not more than $300K. The buyer or a family member must have plans to reside at the property for at least 50% of the number of days the property is used by any person during each of the first two twelve month periods after sale.
 
Other Exemptions that may apply are:
 
  • Another common exemption is for the Seller to provide a certificate stating that they are not a foreign seller as a result of being a U.S. citizen or resident alien.
  • The seller may also apply for and receive a withholding certificate prior to close of escrow from IRS excusing withholding or reducing withholding.

AAR REAL ESTATE CONTRACTS

FOREIGN SELLER - ESCROW PROCESS

Foreign Investment in Real Property Tax Act

Internal Revenue Service (IRS) Forms