What Is FIRPTA, and How Much Is Withheld When a Foreign Owner Sells a Florida Home? (2026)

Short answer: FIRPTA requires the buyer to withhold a share of the gross sales price when a foreign person sells U.S. real estate, generally 15 percent. It is a prepayment against your U.S. tax, not the tax itself, and there is a formal process to reduce it.

This one catches people late. A seller who has owned a condo on Longboat Key or in downtown Sarasota for years, who lives abroad, gets a contract, sets a closing date, and then learns two weeks out that a large slice of the proceeds is going to the IRS instead of to them. Nothing has gone wrong. That is the law working exactly as written. It is just far easier to plan for in advance than to react to.

What FIRPTA actually is

FIRPTA is the Foreign Investment in Real Property Tax Act, and the withholding mechanism lives in Section 1445 of the Internal Revenue Code. The logic behind it is straightforward: once a foreign seller closes and the money leaves the country, the IRS has limited practical ability to collect tax on the sale. So instead of chasing the tax afterward, the law collects a deposit at the closing table.

The critical detail is that the deposit is calculated on the gross sales price, not on your profit. The IRS is not trying to compute your gain at closing. It is holding a percentage of the whole number and sorting out the real math later, when you file a U.S. tax return for that year.

The rates, and the residence test that changes them

There are three tiers, and which one applies depends on the sales price and on what the buyer intends to do with the property.

• Sales price of 300,000 dollars or less, and the buyer will use the property as a residence: no withholding required
• Sales price above 300,000 dollars and not more than 1,000,000 dollars, and the buyer will use the property as a residence: 10 percent
• Sales price above 1,000,000 dollars, or any price where the buyer is not using it as a residence: 15 percent

The residence condition is not a casual box to check. The buyer, or a member of the buyer's family, must have definite plans to reside at the property for at least 50 percent of the number of days the property is used by any person during each of the first two 12-month periods after the sale closes. That is a real standard with a real test, and it is the buyer who signs off on it.

So the same condo can carry two very different outcomes. Sold at 850,000 dollars to a couple relocating from Ohio who will live in it, withholding is 10 percent. Sold at 850,000 dollars to an investor who will put it on a rental program, withholding is 15 percent. Your net proceeds move by tens of thousands of dollars based on a fact about the buyer that you do not control and may not know until you see their offer.

Who is legally on the hook

This surprises buyers more than sellers: the buyer is the withholding agent. If the withholding is required and it does not happen, the IRS can look to the buyer for the money, plus interest and penalties. That liability is why buyer-side attorneys and title companies take the FIRPTA question seriously rather than treating it as paperwork.

In practice the closing agent handles the mechanics, holds the funds out of the seller's proceeds, and remits them. But the legal responsibility sitting with the buyer explains why the process is not flexible and why nobody at the table has discretion to waive it as a favor.

It also explains a form you may have signed on a past sale without reading it. On most closings, the seller signs a certification of non-foreign status, sometimes called a FIRPTA affidavit, stating under penalty of perjury that they are not a foreign person. That signed statement is what lets the buyer skip withholding. If you cannot sign it, the withholding machinery starts.

Who counts as a foreign person

A foreign person for FIRPTA purposes generally means a nonresident alien individual, or a foreign corporation, partnership, trust, or estate. U.S. citizens are not foreign persons, and neither are resident aliens, which includes green card holders and people who meet the substantial presence day-count test for the year.

That distinction matters a lot in this market, because Sarasota, Manatee, and the barrier islands draw a meaningful number of seasonal owners who split the year between here and somewhere else. A snowbird is not automatically a foreign person, and a foreign passport does not settle the question by itself. Day counts, treaty positions, and elections all bear on it.

This is genuinely a CPA question, not an agent question, and it should be answered before the property goes on the market. I have seen the answer change the listing strategy, the timeline, and occasionally the decision to sell at all in that particular year.

The forms, and the clock attached to them

There are three forms worth knowing by name, because they will come up in emails from the closing agent.

• Form 8288 is the buyer's transmittal, filed with the withheld funds. It is due by the 20th day after the date of transfer, which is a short fuse
• Form 8288-A reports the withholding for each foreign seller. The IRS stamps a copy and mails it back to the seller, and that stamped copy is the proof used to claim credit for the money withheld
• Form 8288-B is the application for a withholding certificate, which is how you ask the IRS to approve a reduced amount up front

The 8288-B is the one that saves real money, and it is also the one people find out about too late. The application should be submitted before closing, and IRS processing commonly runs at least 90 days. If you are hearing about it during a 30-day escrowAn arrangement where a neutral third party holds funds or documents on behalf of both the buyer and seller until the specific conditions of a transaction are met. During a home purchase, the title company typically holds the earnest money deposit in escrow; after closing, many mortgage lenders also maintain an ongoing escrow account to collect and pay the homeowner's property taxes and insurance as part of the monthly mortgage payment., the window has already closed for that transaction.

One more mechanical point: the IRS will not issue the stamped Form 8288-A copy without a taxpayer identification number. A foreign seller who does not already have an ITIN needs to start that process, because without it the withheld funds are harder to trace and the refund gets slower. Starting the ITIN early is cheap. Starting it after closing is a delay you feel in your bank account.

It is a deposit, not the final bill

This is the part worth internalizing, because it changes how the number feels. FIRPTA withholding is not your tax. It is money held against your tax. You file a U.S. return for the year of the sale, the actual gain gets computed with your real basis, your improvements, and your selling costs, and the withholding is credited against what you owe.

If more was withheld than you owed, the difference comes back as a refund. Sellers who have owned a property a long time and have a large gain sometimes find the withholding roughly covers the bill. Sellers who bought recently, or who are selling into a softer segment, frequently get most of it back.

The catch is timing. That refund arrives on the IRS calendar, which means it can be many months after closing. If you were counting on those proceeds to fund a purchase somewhere else, the gap between closing and refund is a real cash-flow problem, and it is the reason the 8288-B route is worth the advance planning.

The leverage trap

Here is the scenario that causes actual emergencies rather than mere annoyance. Withholding is computed on the gross sales price, but your mortgage payoff comes out of the same proceeds. A seller with a large loan balance can find that the payoff plus the withholding plus ordinary closing costs adds up to more than the sale produces.

That is not a hypothetical edge case. It happens whenever a heavily financed property sells near what is owed on it. The fix is to run the arithmetic before you sign a contract, not after, and to know whether a withholding certificate application needs to be part of the plan.

It is also a reason to be specific about the timeline. Ninety days of IRS processing is not something you can compress by asking nicely, so if the numbers say you need the certificate, that requirement sets the listing date rather than the other way around.

What about Florida state tax

Florida has no state personal income tax, so there is no state-level income tax on the gain from selling your home here. FIRPTA is entirely a federal mechanism, and being in a no-income-tax state does not reduce it by a dollar.

Do not confuse FIRPTA with documentary stamp tax on the deed, which is a separate Florida transfer tax that applies to sellers generally, foreign or not, and shows up as its own line on the closing statement. They are different things collected by different governments for different reasons, and seeing both on the same settlement statement is normal.

If some owners are U.S. persons and some are not

Mixed ownership is common: one spouse is a U.S. citizen and the other is not, or a property is held by several family members with different statuses. In that situation the sale price is allocated among the owners, and the withholding applies to the foreign owners' share rather than to the whole price.

How the allocation is done depends on how title is held and on the specific facts, so this belongs in front of your CPA and your closing agent early rather than being assumed. The difference between withholding on half a sale and withholding on all of it is not a rounding error.

A practical sequence for foreign sellers

• Confirm your status with a CPA who handles cross-border returns before you list, not after you have a contract
• If you do not have an ITIN, start that application early
• Ask your CPA to estimate the actual tax on the sale, then compare it to 15 percent of the likely sales price. The gap tells you whether a Form 8288-B application is worth filing
• If it is worth filing, build at least 90 days of IRS processing into the plan before you commit to a closing date
• Choose a title company or closing attorney who handles FIRPTA closings regularly. This is not the transaction to be someone's first
• Run a net sheet that subtracts the withholding, the mortgage payoff, and closing costs together, so you know your actual walk-away number before you accept an offer
• Keep every document from the closing, especially the stamped Form 8288-A, because that is what supports your credit when you file

Thinking about selling a Florida property from abroad?

Most of the pain in these sales is avoidable, and almost all of it comes from finding out about the withholding after a contract is signed instead of before the sign goes in the yard. If you own here and live somewhere else, tell me early and we will build the timeline around what your tax advisor needs rather than discovering the constraint halfway through.

I am happy to talk through what your sale would look like and to point you toward closing agents and CPAs here who do this work routinely. Reach out and tell me where the property is and roughly what you think it is worth, and we can go from there.

Nothing here is tax or legal advice. FIRPTA rules, rates, and thresholds are set by federal law and can be amended, and your situation turns on facts specific to you. Confirm the current requirements with a qualified CPA or tax attorney before making decisions.