A foreign owner selling Florida property should expect FIRPTA withholding at closing, typically 15% of the sale price, unless an exception or IRS withholding certificate applies. After the sale, the seller files a U.S. return (usually Form 1040-NR) reporting the actual gain and claiming credit for the amount withheld. Planning before you list can reduce the amount held back.
Before You List
- Confirm whether you're a foreign person for FIRPTA purposes. Green card holders are generally not.
- Gather your purchase closing statement and records of improvements. These set your cost basis.
- Get an ITIN if you don't have one. You'll need it for the withholding certificate and the U.S. return.
- Ask a tax advisor to estimate your actual U.S. tax on the gain.
Before Closing
- If your expected tax is well below 15%, consider applying for a withholding certificate (Form 8288-B) to reduce withholding. Apply early; processing takes time.
- Tell your title or closing agent you're a foreign seller so FIRPTA is handled correctly.
At Closing
- The buyer withholds the required amount and sends it to the IRS with Forms 8288 and 8288-A, generally within 20 days.
- Keep your copy of Form 8288-A. You'll need it to claim the credit.
- Florida documentary stamp tax on the deed is customarily paid by the seller. In most counties it's $0.70 per $100 of the sale price.
After the Sale
- File a U.S. return for the year of sale, usually Form 1040-NR for individuals. For nonresidents without U.S. wages, it's generally due June 15 of the following year.
- Report the gain, including depreciation recapture if the property was rented.
- Claim the amount withheld as a credit. Any excess is refunded.
- Report the sale in your home country as its rules require. A treaty may provide a credit for U.S. tax paid.
Florida has no state personal income tax, so individual sellers usually have no Florida income tax return to file on the sale.
Frequently Asked Questions
How much is withheld when a foreign owner sells Florida property?
Generally 15% of the amount realized, with lower rates in certain home sales to buyers who will live in the property. A withholding certificate can reduce it further.
How long does it take to get FIRPTA withholding back?
The excess is refunded after you file your U.S. return for the year of sale. Filing promptly, with a correct ITIN and Form 8288-A, avoids delays.
Talk to St. Clair Advisory Group
Every situation is different. Our team in Cape Coral can review yours and tell you what applies.
This article is general information, not tax or legal advice for your situation. Tax rules change, and dates can shift for weekends, holidays, and IRS disaster relief. Confirm current rules with a tax professional before acting.