How much is FIRPTA withholding?

The default rate is 15% of the gross amount realized — the full sales price, not the seller's gain. A reduced 10% rate applies when the buyer will use the property as a residence and the price is between $300,001 and $1,000,000. Sales of $300,000 or less to a buyer who will use it as a residence can be fully exempt.

Who is responsible for FIRPTA withholding — the buyer or the seller?

The buyer (called the transferee) is legally responsible for withholding and remitting the tax. If the buyer fails to withhold when required, the IRS can collect the unpaid amount, plus penalties and interest, directly from the buyer — even though the tax economically belongs to the foreign seller.

What forms are used to report FIRPTA withholding?

The buyer reports and pays the tax using Form 8288 (U.S. Withholding Tax Return for Dispositions by Foreign Persons of U.S. Real Property Interests) and Form 8288-A for each foreign seller. Both are due within 20 days of the closing date, and the withheld amount must be remitted with the return.

Does FIRPTA apply if the seller is a US citizen living abroad?

No. FIRPTA applies to foreign persons — nonresident aliens and foreign entities. A US citizen or resident alien (green-card holder or someone who meets the substantial presence test) is not subject to FIRPTA, regardless of where they live. The seller certifies non-foreign status in a signed affidavit to relieve the buyer of withholding.

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FIRPTA & Foreign Real Estate

FIRPTA Withholding: What Foreign Sellers of US Property Owe at Closing

When a foreign person sells US real estate, the buyer must withhold 15% of the gross sales price and remit it to the IRS. Miss the rule and the buyer — not the seller — is on the hook.

SMAART Tax Team

February 10, 2026

6 min read

|Reviewed by Anthony Gonzalez, Enrolled Agent