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Florida Real Estate Law

FIRPTA Explained: Selling Florida Property as a Foreign Owner

Quick Answer

FIRPTA — the Foreign Investment in Real Property Tax Act — requires the buyer to withhold up to 15% of the gross sale price when a foreign person sells U.S. real estate, and send it to the IRS. It applies to Florida property owned by non-U.S. sellers. The rate drops to 10% or 0% for lower-priced homes the buyer will use as a residence, and a seller can apply for a withholding certificate to reduce it to the actual tax owed. Planning ahead — ideally before you buy — avoids most of the pain.

By Arthur Simpson, Esq. · FL Bar #529265 Florida Real Estate Attorney June 24, 2026

What FIRPTA is, in plain English

Florida is one of the most popular states in the country for foreign real estate buyers, so this comes up constantly in my practice. FIRPTA is a federal tax-collection mechanism. Normally the IRS collects tax from a seller after the sale. But a foreign seller can take the money and leave the country, so Congress built in a safeguard: when a foreign person sells U.S. real property, the buyer must withhold a percentage of the gross sale price at closing and remit it to the IRS as a deposit against the seller's tax. It is withholding, not a separate tax — but it's withheld on the whole sale price, not the profit, which is what surprises people.

Key point: FIRPTA withholding is the buyer's legal responsibility. If the buyer fails to withhold when required, the IRS can pursue the buyer for the amount. That's why buyers of Florida property from foreign sellers need their own counsel too.

Who counts as a "foreign person"?

For FIRPTA, a foreign person generally means a nonresident alien individual, a foreign corporation, foreign partnership, or foreign trust or estate. A U.S. citizen or a "resident alien" (including most green-card holders and those who meet the substantial-presence test) is not a foreign person for this purpose. The distinction is technical, and getting it wrong is costly — which is why the seller's status should be confirmed early, not assumed at closing.

The withholding rates: 15%, 10%, or 0%

The rate depends on the sale price and how the buyer intends to use the property:

Note the residence-based exemptions depend on the buyer's intended use and require the buyer to sign an affidavit accepting that position — so they can't be claimed unilaterally by the seller.

How to reduce or recover the withholding

Here's the part foreign sellers most need to hear: 15% of the gross price is almost always more than the actual tax owed on the gain. You have two main paths to fix that:

  1. Withholding certificate (IRS Form 8288-B). Before or at closing, the seller can apply for a certificate asking the IRS to reduce the withholding to the actual expected tax on the gain. If approved, far less money is tied up. This has to be applied for properly and on time, and the funds are typically held in escrow while the application is pending.
  2. File a U.S. tax return afterward. Even without a certificate, the seller files a U.S. return for the year of sale, reports the actual gain, and claims a refund of the over-withheld amount. This works, but it means waiting — sometimes many months — to get the excess back.
⚠ Plan before you buy, not when you sell. The most expensive FIRPTA problems trace back to how the property was purchased. Buying directly in a foreign individual's name can also expose the property to a 40% U.S. estate tax on Florida value above $60,000. The right ownership structure — often established before the purchase contract — can address both estate-tax and withholding exposure at once.

Where an attorney fits in

FIRPTA sits at the intersection of real estate, tax, and (for many families) estate planning — and it involves both sides of the deal. As a Florida attorney who holds the CIPS (Certified International Property Specialist) designation, I help foreign buyers structure Florida purchases up front, and help foreign sellers and their buyers handle withholding correctly at closing — coordinating with the closing agent, the qualified intermediary if there's an exchange, and the client's CPA. Our firm also publishes ongoing cross-border real estate intelligence through GCRID. If you're a non-U.S. person buying or selling Miami, Orlando, or other Florida property, get the structure reviewed early.

Frequently Asked Questions

How much is FIRPTA withholding on a Florida property sale?
The default is 15% of the gross sale price. It drops to 10% when the price is over $300,000 but not more than $1,000,000 and the buyer will use it as a residence, and to 0% when the price is $300,000 or less and the buyer will use it as a residence. The residence-based rates require the buyer to sign an affidavit.
Who is responsible for FIRPTA withholding — the buyer or the seller?
The buyer is legally responsible for withholding and remitting the funds to the IRS. If a buyer fails to withhold when FIRPTA applies, the IRS can hold the buyer liable for the amount, plus penalties and interest. That's why buyers purchasing from a foreign seller also benefit from their own counsel.
Can I get the FIRPTA money back?
Often, yes. FIRPTA withholds on the gross sale price, which usually exceeds the actual tax on your gain. You can apply for an IRS withholding certificate (Form 8288-B) to reduce the amount held, or file a U.S. tax return for the year of sale to claim a refund of whatever was over-withheld.
Does FIRPTA apply if I'm a green-card holder?
Generally no. FIRPTA applies to 'foreign persons.' Most green-card holders and others who meet the IRS substantial-presence test are treated as resident aliens, not foreign persons, and are not subject to FIRPTA withholding. Your specific status should be confirmed before closing.
How can I avoid FIRPTA problems as a foreign buyer?
The best time to plan is before you buy. How you take title — individually, or through a properly structured entity or trust — affects both FIRPTA at resale and potential U.S. estate-tax exposure on the property. A Florida attorney experienced in cross-border transactions can set up the right structure before you sign the purchase contract.

The Truestead Takeaway

FIRPTA isn't a reason to avoid Florida real estate — it's a reason to plan for it. The 15% withholding is a deposit against tax, not a penalty, and it can usually be reduced with a withholding certificate or recovered by filing a U.S. return. The families who struggle with FIRPTA are almost always the ones who never planned for it; the ones who structure ownership correctly before buying rarely feel it at all. If you're a non-U.S. person on either side of a Florida deal, have the structure and the withholding reviewed by counsel early.

Related Florida Real Estate Guides

Do I Need a Real Estate Attorney to Buy a House in Florida? Florida 1031 Exchange: A Property Owner's Guide What Does a Real Estate Attorney Do at a Florida Closing? Florida Real Estate Attorney — Truestead Law

Talk to a Florida Real Estate Attorney

Buying or selling Florida property as a non-U.S. person? Schedule a consultation with Arthur Simpson, Esq., CIPS, to structure it right and handle FIRPTA correctly.

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This article is for general informational purposes only and does not constitute legal advice, nor does reading it create an attorney-client relationship. Florida real estate, tax, and estate law are fact-specific and change over time. Consult a licensed Florida attorney about your individual circumstances. Arthur Simpson, Esq. is licensed to practice law in the State of Florida. Attorney advertising.