FIRPTA is the rule that requires the buyer to withhold part of the price when the seller is a foreign person and send that money to the IRS. In general, the withholding is 15% of the gross sale price (IRS). It isn't the final tax: it's a prepayment. The real tax is calculated on your gain on a US tax return, and anything withheld in excess comes back to you. With an application filed before closing, the withholding can be reduced.
Who counts as "foreign" under FIRPTA
The rule applies to sellers who are not US residents for tax purposes: most Brazilians and other foreign nationals who live abroad and own property here. Green card holders and people who meet the substantial presence test are normally treated as tax residents and fall outside FIRPTA, but that's an analysis for your CPA, not your real estate agent. Property bought by a foreign company is covered too.
0%, 10% or 15%: how much is withheld
The law (26 U.S.C. §1445) sets three tiers. Both reductions depend on the buyer, not on you:
| Situation at sale | Withholding on the gross price |
|---|---|
| Buyer is an individual who will live in the home, price up to $300,000 | 0% |
| Buyer will live in the home, price over $300,000 and up to $1 million | 10% |
| Any other case (investor buyer, company, or price over $1 million) | 15% |
Sources: 26 U.S.C. §1445; IRS, exceptions from FIRPTA withholding, accessed Oct 2026.
"Will live in the home" has a precise definition: the buyer or a family member must have definite plans to reside at the property for at least 50% of the days it is used by anyone during each of the first two 12-month periods after the purchase. Days the property sits vacant don't count (IRS). The buyer usually signs a statement to that effect at closing.
An example with numbers
Say you bought a condo for $400,000 and sell it for $500,000 to an investor. The withholding is 15% of the gross price: $75,000 is held back at closing.
Now the real tax math: your gain is at most $100,000 before subtracting selling expenses (commission, closing costs) and documented improvements. Federal tax is calculated on that gain, not on the $500,000. In many cases it comes in well below the $75,000 withheld, and the difference is refunded through your tax return. If the sale is at a loss, there may be no tax at all, and the 15% is still withheld unless you apply for a reduction. The rate in your case depends on how long you owned the property and your US income: ask a CPA to run the numbers.
Forms 8288 and 8288-A: what the buyer does
The buyer is the withholding agent (in practice, the title company or closing attorney handles it for them). They have 20 days after the transfer to send the money to the IRS with Forms 8288 and 8288-A (IRS).
Form 8288-A is your receipt. The IRS sends you a stamped copy, and that's what proves the credit on your tax return. Without a taxpayer ID number (ITIN or SSN) on the form, the IRS won't send you the stamped copy. In that case you have to get an ITIN and prove the withholding with your closing documents (IRS, ITIN guidance for foreign property buyers and sellers; Form 8288 instructions). So if you don't have an ITIN yet, apply well before you list the property.
Form 8288-B: asking to withhold less before you sell
If your actual tax will be less than the withholding, for example because the gain is small or you're selling at a loss, you can apply to the IRS for a withholding certificate on Form 8288-B to reduce or eliminate the withholding.
- When to apply: by the closing date. If the application has been submitted to the IRS by then, the title company still withholds the amount but only has to send it to the IRS by the 20th day after the IRS mails its determination (Form 8288 instructions). In the meantime, the money sits in escrow.
- IRS timeline: normally up to 90 days after it receives all the required information (IRS).
- In practice: the released amount reaches you months earlier than it would if you waited for your tax return. That matters when the withholding is large.
Recovering the money on Form 1040-NR
With or without an 8288-B, the sale must be reported in the US for the year it happened, on Form 1040-NR, using the stamped 8288-A as a credit (IRS). If you had no US wages, the deadline is the 15th day of the sixth month after the end of the year: the 2025 return was due June 15, 2026 (Form 1040-NR instructions). If the withholding was more than the tax, the IRS refunds the difference.
A typical timeline
- Before listing: get an ITIN if you don't have one, gather receipts for improvements, and ask a CPA to calculate your actual tax.
- When you accept an offer: confirm with the title company whether the buyer will live in the home (which can lower the withholding to 10% or 0%) and decide whether an 8288-B is worth filing.
- Closing: the withholding is taken. The rest of the proceeds go to you.
- Within 20 days (or 20 days after the IRS determination, if you filed an 8288-B): the title company sends the money and the forms to the IRS.
- The following year: you file Form 1040-NR and get back whatever was over-withheld.
What about Brazil?
The sale must also be reported in Brazil, and there may be capital gains tax there, with its own rules for crediting what you paid in the US. Talk to an accountant in Brazil and a CPA in the US before you sell. Our Portuguese guide on reporting US property on the Brazilian tax return covers the Brazilian side. If you're a tax resident of another country, check its rules with a local adviser.
Selling with Rui
Rui Cunha doesn't prepare tax returns. He structures the sale with FIRPTA in mind from day one: he alerts the title company, explains the residency statement to the buyer, and refers you to CPAs who work with ITINs and 8288-B applications. See how it works to sell your home, even from abroad, and find quick answers in the FAQ. If you're still buying, plan your exit now with buying Florida real estate as a foreign national.
FAQ
Is FIRPTA an extra tax?
No. It's a withholding taken in advance on the gross sale price. The real tax is calculated on your gain on Form 1040-NR, and anything over-withheld is refunded.
How much is withheld when a foreigner sells property in the US?
Generally 15% of the sale price. If the buyer is an individual who will live in the home, the withholding drops to 10% for sales over $300,000 and up to $1 million, and to zero for sales up to $300,000.
Can the withholding be reduced before closing?
Yes, with Form 8288-B, submitted to the IRS by the closing date. The money stays in escrow until the IRS decides, which it usually does within 90 days of receiving all the documentation.
How long until I get the withheld money back?
Without an 8288-B, only after you file Form 1040-NR for the year of the sale and the IRS processes it. With an approved 8288-B, the released portion comes much sooner. Processing times vary: confirm with your CPA.
Do I need an ITIN to sell?
Not to sell. To get the withholding back, in practice yes: without a taxpayer ID number, the IRS won't send the stamped 8288-A that proves your credit. Apply for an ITIN before you list.
Talk to Rui
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