FIRPTA for foreign buyers

FIRPTA is an acronym that sounds scary, but the idea is simple. It's a US federal law about the sale of US property by foreign owners. Understanding it from the purchase avoids surprises down the road.

What it is, in one sentence

FIRPTA (Foreign Investment in Real Property Tax Act) requires that when a foreign person sells US real estate, a portion of the sale price (generally around 15%) is withheld and remitted to the US government at closing.

And at purchase? Does FIRPTA withhold anything from me?

No. When you buy, FIRPTA withholds nothing from you. It comes into play in the future, when you sell. That's why it's a matter of planning: thinking about the exit at the entrance.

Why think about it at purchase

How you buy the property (in your own name or through a structure such as an LLC) can influence how FIRPTA and sale taxes affect you later. Deciding this with a good CPA before signing is usually cheaper than fixing it afterward.

What it means in practice

It's not a reason for fear or to give up — it's a reason to plan. I flag where FIRPTA matters and connect you to a CPA with international experience so your purchase structure already accounts for the future sale.