Get Firpta

If the seller is considered a “foreign person” (as defined by the Internal Revenue Code), the buyer may be subject to tax withholding obligations under FIRPTA. Importantly, the obligation of collecting and paying taxes falls upon the buyer – not the title company or settlement company.

Buyers in the transaction need to be aware that the IRS designates the Buyer as the Withholding Agent and therefore it is the Buyer's responsibility to do the withholding and send the amount to the IRS.

This document, included in the seller's opening package, requests that the seller swears under penalty of perjury that they are “not a non-resident alien for purposes of United States income taxation.” A Seller unable to complete this affidavit may be subject to withholding up to 15%.

In order to avoid issues with FIRPTA, the seller will sign an Affidavit and certify status. Otherwise, various pesky IRS forms, such as Form 8288 may be required.

A foreign seller can reduce the FIRPTA withheld amount if they apply for a Withholding Certificate (Form 8288-B). That means they would need to have first a TIN (tax identification number) and if they don't they should apply for one as soon as possible and before the closing of the deal.

A FIRPTA affidavit, also known as Affidavit of Non-Foreign Status, is a form a seller purchasing a U.S. property uses to certify under oath that they aren't a foreign citizen. The form includes the seller's name, U.S. taxpayer identification number and home address.

A FIRPTA affidavit, also known as Affidavit of Non-Foreign Status, is a form a seller purchasing a U.S. property uses to certify under oath that they aren't a foreign citizen. The form includes the seller's name, U.S. taxpayer identification number and home address.

The Foreign Investment in Real Property Tax Act (FIRPTA) is a tax imposed on the amount realized from the sale of real property owned by a foreign seller. There are exceptions to this tax-withholding requirement.