Taxes
FIRPTA: how much is withheld when a foreign person sells U.S. real estate?
Official read on the IRS page or in the Form 8288 instructions cited here. Reported from law firms, press or operators, with their date. Unconfirmed no reliable source: check before deciding.
When a foreign person sells U.S. real estate, the buyer generally has to withhold 15% of the amount realized and send it to the IRS within 20 days of the transfer. The rate drops to 10%, or to zero, when the buyer will live in the property and the price is $1 million or less. This is the FIRPTA rule (the Foreign Investment in Real Property Tax Act). It applies to sellers who are not U.S. persons, such as a Venezuelan living in Venezuela who owns a house or condo in Florida or Texas.
Who withholds, and from whom
The buyer (the “transferee”) is the withholding agent in most cases Official. Certain purchasers’ agents and settlement officers who handle the purchase can also be responsible Official. If the buyer does not withhold when it should, the buyer can be held liable for the tax, and willful failure to collect and pay over the tax carries a penalty of up to $10,000 Official.
The rule applies when the seller is a foreign person: a nonresident alien individual, a foreign corporation, a foreign partnership, trust or estate. A resident alien individual is not a foreign person Official, so a green card holder is treated as a U.S. person for this rule.
If the seller is not a foreign person, no withholding is required when the buyer receives a certification of nonforeign status signed under penalties of perjury, with the seller’s name, address and TIN (a Social Security number or an EIN); a valid Form W-9 counts as that certification Official.
How much is withheld
The base is the amount realized: cash, the fair market value of other property transferred and debt the buyer assumes Official. It is not the gain. The IRS puts the general rate at 15% Official.
| Situation | Withholding |
|---|---|
| Foreign seller, general case | 15% of the amount realized |
| Buyer will use it as a residence, amount realized more than $300,000 up to $1 million | 10% |
| Buyer will use it as a residence, amount realized $300,000 or less | none |
| Amount realized above $1 million | 15% |
Every row above is from the IRS and Form 8288 instructions Official.
The residence rules in detail
- The buyer must have definite plans to live in the property for at least 50% of the days it is used during each of the first two 12-month periods after the transfer. Days when the property is vacant are not counted, and days a family member lives there count for the buyer Official.
- The $300,000 test is on the total amount realized: if several foreign sellers share the sale and the total is more than $300,000, the exemption does not apply even if each seller’s share is $300,000 or less Official.
- If the buyer does not meet the residence requirement, the buyer can be liable for failing to withhold, unless the cause was a change in circumstances that could not reasonably have been anticipated Official.
Deadlines and forms
- The buyer files Form 8288 and sends the tax withheld by the 20th day after the date of transfer Official.
- It attaches Copies A and B of Form 8288-A for each seller subject to withholding; the IRS stamps Copy B and sends it to the seller at the address shown on the form Official.
- The buyer must still withhold on the transfer date even if an application for a withholding certificate is pending, but does not have to file and pay until the 20th day after the IRS mails its decision Official.
Reducing the withholding: Form 8288-B
Either the buyer or the seller can ask the IRS for a withholding certificate (Form 8288-B) to reduce or eliminate the withholding. The IRS says it normally acts within 90 days of receiving all the required information Official. It is the route when the expected tax on the gain is much lower than 15% of the price, for example when the seller bought long ago at a similar price or sells at a loss; that example is our illustration, not an IRS table.
Getting the money back
The withholding is a credit, not the final tax. To receive credit the seller must generally attach the stamped Copy B of Form 8288-A to a U.S. income tax return, for example Form 1040-NR Official. The IRS says the sale is reported for income tax purposes in the year it took place Official. If joint sellers share a credit, they follow their agreement; without one, it is split evenly Official.
A nonresident alien without a Social Security number uses an ITIN as the taxpayer identification number Official. Without the seller’s TIN on Form 8288-A the IRS does not provide the stamped copy until the seller gives it a TIN, so get one before the sale Official.
What this guide does not cover
- How much tax you owe on the gain (capital gains rates, state tax, treaty rules). Venezuela has no income tax treaty with the United States that we have verified Unconfirmed.
- State withholding, which some states add.
- Estates and inherited property sold by a nonresident heir.
For the closing itself, ask the title or escrow company and a U.S. tax professional. If you also own property in Venezuela and plan to sell it, see selling property in Venezuela from abroad.
This guide summarizes IRS publications as of November 2026; it is not tax advice.
Questions people ask
What is FIRPTA withholding?
When a foreign person sells a U.S. real property interest, the buyer (in most cases) must withhold part of the price and send it to the IRS. The rate is generally 15% of the amount realized. It is a withholding on the sale, not a separate penalty: the seller reports the sale on a U.S. tax return and claims credit for what was withheld.
Does a green card holder count as a foreign person?
No. The IRS instructions say a resident alien individual is not a foreign person. A nonresident alien individual is. If you are the seller and not a foreign person, you give the buyer a certification of nonforeign status, which can be a valid Form W-9.
When is the withholding lower or zero?
If the buyer will use the property as a residence: no withholding when the amount realized is $300,000 or less, and a reduced 10% when it is more than $300,000 up to $1 million. Above $1 million the 15% rate applies. The buyer must have definite plans to live there at least 50% of the days it is used in each of the first two 12-month periods.
Can I ask the IRS to reduce the withholding?
Yes. Either the buyer or the seller can apply for a withholding certificate on Form 8288-B. The IRS says it normally acts on an application within 90 days of receiving all the required information. The buyer must still withhold on the transfer date even if an application is pending.
How do I get the withheld money back?
You attach the IRS-stamped Copy B of Form 8288-A to your U.S. income tax return (for example, Form 1040-NR) to receive credit for the amount withheld. If the withholding was more than your actual tax, the credit becomes a refund when you file.
Sources checked on November 10, 2026
- IRS — FIRPTA withholding (revisada 21-07-2026)
- IRS — Instructions for Form 8288 (Rev. January 2026)
- IRS — Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities (2026)
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