What is a FIRPTA withholding certificate?

It is an IRS determination, requested on Form 8288-B, that authorizes FIRPTA withholding at an amount lower than the standard 15% of the gross sales price. The IRS bases the reduced amount on the seller's actual maximum tax liability on the gain, so the seller isn't over-withheld and forced to wait for a refund.

When should I apply for a FIRPTA withholding certificate?

File Form 8288-B on or before the closing date. If the application is pending with the IRS at closing, the buyer still withholds the full 15% but can hold it in escrow rather than remitting it, then pay the reduced amount once the IRS issues the certificate. Applying after closing loses that escrow option.

How long does the IRS take to issue a withholding certificate?

The IRS states it will normally act on a complete Form 8288-B application within 90 days of receiving it. Incomplete applications — especially those missing taxpayer identification numbers — take longer, which is why obtaining ITINs for both buyer and seller before filing is critical.

Does a withholding certificate eliminate the foreign seller's US tax?

No. It only reduces the amount withheld up front to match the actual tax owed on the gain. The seller still must file a US tax return (Form 1040-NR or 1120-F) to finalize the liability. The certificate simply prevents the IRS from holding far more than the tax due while that return is processed.

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FIRPTA & Foreign Real Estate

Reducing FIRPTA Withholding: How Form 8288-B Gets Your Money Back Faster

FIRPTA's 15% withholding is calculated on the gross sales price, so it usually far exceeds the tax a foreign seller actually owes. A withholding certificate can cut the amount held back to the real number — at closing, not months later.

SMAART Tax Team

February 24, 2026

6 min read