FIRPTA Withholding Calculator
When a foreign seller closes, part of the proceeds stays behind. This shows how much, and under which rate.
What This Calculator Does
Your sale price and the buyer's intended use of the property are run through the FIRPTA rules to produce the withholding amount and the rate that generated it. It also displays what the seller nets at the table before any refund — the figure that catches people off guard most often.
Who Is This For
Written for foreign nationals selling US real estate, buyers who need to grasp that the obligation falls on them, and agents on either side of an international transaction in Miami who prefer this number settled well before closing week.
How It Works
Enter the sale price and indicate whether the buyer intends to use the property as a residence. The calculator selects the correct rate and displays the withholding. Confirm the outcome with a US tax professional before the closing statement is finalized.
Frequently Asked Questions
Which rate will apply to my sale?
The default rate is 15% of the gross sale price. Where the price falls between $300,001 and $1,000,000 and the buyer will use the property as a residence, it drops to 10%. Where the price is $300,000 or less and the buyer signs an affidavit committing to residential use, withholding is zero.
Whose obligation is the withholding?
The buyer serves as withholding agent — not the seller and not the title company, even though title generally handles the mechanics. Should the amount go unwithheld and unremitted, the IRS can pursue the buyer for it along with penalties and interest. That is precisely why buyers in international deals cannot treat FIRPTA as the other side's problem.
Is the amount withheld the tax itself?
It is not. The withholding is a deposit against the seller's US tax liability on the gain, calculated on the gross price rather than on profit. Where the gain is modest — or where the sale produces a loss — the withholding routinely exceeds the tax owed, sometimes by a wide margin.
How is the excess recovered?
By filing a US tax return for the year of the sale and claiming credit for the amount withheld. The seller needs a US taxpayer identification number to do so, and obtaining one takes time, so begin the process well ahead of closing rather than after it.
Can the withholding be reduced beforehand?
Yes, by applying to the IRS on Form 8288-B for a withholding certificate based on the tax actually expected. Allow at least 90 days for processing. Filed in time, the funds are generally held pending the IRS response instead of being remitted; filed late, the deposit goes in and the refund is a matter of waiting.
Must the residence claim be in writing?
It must. Both the reduced and the zero rate depend on the buyer's declaration that the property will serve as a residence for the required period, and that affidavit belongs in the closing file. A verbal understanding will offer the buyer no protection if the IRS raises the question later.