Foreign Investment Real Estate Taxes - FIRPTA

real estate withholding tax firpta

Purchasing a U.S. property that's owned by a foreigner triggers a special procedure for paying capital gains taxes. It's referred to as FIRPTA. If you don't follow FIRPTA guidelines when buying a property from a foreign person, it can end up costing you a lot of money in taxes. To avoid expensive mistakes, work with the accountants at Heyer Accounting & Tax. We'll break down the complexities of FIRPTA into steps you can understand and make it easy to play by the IRS rules.

What is FIRPTA?

The Foreign Investment in Real Property Tax Act (FIRPTA) was established by the IRS in 1980. It's basically a withholding tax that's collected up front on the sale of a U.S. property owned by a foreigner. Collecting this tax ahead of time ensures that the foreigner pays their share of taxes on the profits from the sale of the property. Under FIRPTA guidelines, you're generally required to withhold 15% of the gross purchase price at the closing but this can sometimes be reduced.

What does Heyer Accounting & Tax do?

If you're buying a property from a non-resident individual or a foreign corporation, partnership, trust, or estate, don't risk getting in trouble with the IRS. We can help you track the documentation needed for a reduced holding amount, apply for an ITIN number, and assist you with submitting all of the necessary forms and certificates. Contact us now at 786-693-9358 or request a free consultation to learn more about FIRPTA and how we can help your real estate transaction go smoothly. Offices in the Miami and Fort Lauderdale areas.

  • FIRPTA withholding certificates
  • Help applying for an Individual Taxpayer Identification Number (ITIN)
  • Assistance with affidavits and required forms
  • Tax strategies and advice