What is the FIRPTA withholding rate?

The general rate is 15 percent of the amount realized on a disposition of a US real property interest by a foreign person. The amount realized is broadly the sale price rather than the seller gain, so a foreign seller can face withholding on a sale where they made no profit at all.

Who is responsible for withholding?

In most cases the buyer is the withholding agent. The transferee is expected to establish whether the seller is a foreign person and can be left liable for the amount that should have been withheld if they fail to do so. A closing agent usually handles the mechanics in practice, but the legal responsibility sitting with the buyer is why a buyer agent should raise it rather than assume somebody else owns it.

Is there an exception for smaller sales?

Yes, where the buyer acquires the property for use as a residence and the amount realized is not more than $300,000. The transferee must be an individual, and the buyer or a family member must have definite plans to reside at the property for at least 50 percent of the days the property is used by anyone during each of the first two 12 month periods after transfer.

What about sales above that threshold?

A reduced rate exists for a band of higher prices where the buyer will use the property as a residence. This page deliberately does not print a percentage for it, because the widely repeated figure could not be confirmed against the primary source when this page was written. Get the applicable rate from the closing agent or a tax advisor for the specific transaction rather than from any article.

When should I raise this with a client?

At listing on the seller side and at contract on the buyer side, never later. A foreign seller who learns late that a large sum will not arrive at closing may be unable to complete, and a buyer who learns at the table that they are the withholding agent has been badly served. Ask the status question on every transaction so it is routine rather than pointed.

What Happens When Your Seller Is Not a US Person

Updated August 2026 · Reviewed by Adams, Cameron & Co.

Quick answer

Money gets withheld at closing, and the surprising part is who is responsible for it. Under the federal FIRPTA rules, when a foreign person disposes of a US real property interest, tax is withheld from the proceeds, generally at 15 percent of the amount realized. The withholding agent in most cases is the buyer, not the seller and not the closing agent, and a buyer who fails to withhold when required can be left liable for the amount. There is an exception where the buyer acquires the property as a residence and the amount realized is not more than $300,000, subject to conditions about actually living there.

Key takeaways

FIRPTA applies to a disposition of a US real property interest by a foreign person. The general withholding rate is 15 percent of the amount realized, which is the price rather than the profit.
In most cases the buyer is the withholding agent. The buyer must establish whether the seller is a foreign person and can face liability for failing to withhold.
There is a residence exception where the amount realized is not more than $300,000 and the buyer acquires the property as a residence. The transferee must be an individual.
That exception has a real condition: definite plans to reside at the property for at least 50 percent of the days it is used by anyone during each of the first two 12 month periods after transfer.
A reduced rate exists for a middle band of sale prices with residence use. We are deliberately not printing the figure here, because it should come from the closing agent or a tax advisor on the actual transaction.

Florida has a great deal of foreign ownership, and a share of it eventually sells. When it does, a federal rule most agents have heard of and few can describe comes into the transaction, and it lands on the party nobody expects.

What the rule does

FIRPTA governs the disposition of a US real property interest by a foreign person. Rather than trusting a nonresident to file a US return afterwards, the law takes the money at the point of sale. The general rate is 15 percent of the amount realized.

Read that phrase carefully, because it is the part agents get wrong in conversation. The withholding is on the amount realized, broadly the sale price, and not on the seller profit. A foreign seller who is losing money on a property can still have 15 percent of the price withheld. Whether they get it back is a later question answered by a tax return, not by the closing.

The part that surprises people: the buyer withholds

In most cases the buyer is the withholding agent. Not the seller. Not, as agents often assume, automatically the title company.

The transferee is expected to establish whether the seller is a foreign person, and a buyer who fails to withhold where withholding was required can be left liable for the amount that should have been withheld. In practice a closing agent will normally handle the mechanics, but the legal responsibility sitting on the buyer is what makes this an issue a buyer agent has to raise rather than assume somebody else owns.

It also explains why the question needs asking early. A buyer discovering at the closing table that they are the withholding agent on a transaction nobody flagged is a bad afternoon that was entirely preventable.

The residence exception

Withholding is not required where the buyer acquires the property for use as a residence and the amount realized is not more than $300,000. Two conditions ride along with it:

The transferee must be an individual. An entity buying the property does not qualify.
The buyer, or a member of the buyer 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 transfer.

That second condition is stricter than the shorthand version people repeat. It is not enough to intend to use the place sometimes. And a buyer who signs something asserting residence plans they do not have has made a representation, not a formality.

There is also a reduced rate available for a band of higher sale prices where the buyer will use the property as a residence. We are not printing a percentage for it here. The figure quoted in circulation could not be confirmed against the primary source while writing this page, and a number that is wrong by five points on a $600,000 sale is worse than no number at all. Get it from the closing agent or a tax advisor on the specific transaction.

What an agent actually does about it

On either side, the work is the same three moves and they all happen early.

Ask the status question at listing or at contract, not later. Is the seller a US person for tax purposes? It is a neutral question and it is asked on every transaction, not selectively.
Get it established in writing and give it to the closing agent immediately. The closing agent handles the mechanics, but only if they know in time to do so.
Refer the tax question out. Whether a reduced rate or a withholding certificate applies is a tax question, and answering it is not something a licensee should be doing. That boundary is the same one described in what a Florida agent can fill in without practicing law.

Why it matters more on the listing side than agents expect

A foreign seller who has not planned for this discovers late that a large sum is not arriving at closing. That can break a transaction where the seller was relying on the proceeds, and it can turn a straightforward closing into a renegotiation.

Raising it at listing lets a seller take advice while there is time to use it. Raising it three days out lets them be angry at you. The mechanics of proceeds and timing generally are in how and when agents actually get paid after a closing, and this is a case where the seller net is the number that moves rather than yours.

Two adjacent things that get confused with it

Deferring gain through an exchange is a different subject with different rules, covered in what a 1031 exchange is. It is not a way around withholding and should not be described as one.
Where the money actually goes at closing is its own risk. A withholding figure that is correct and a wire that is redirected produce the same outcome for the seller, which is covered in wire fraud in a real estate closing.

The short version

Foreign seller, 15 percent of the price rather than the gain, and the buyer is the one on the hook for withholding it. There is a residence exception at $300,000 or less with real conditions attached. Ask the status question on every transaction at the beginning, put the answer in writing, hand it to the closing agent, and send the tax questions to somebody qualified to answer them.

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