FIRPTA Explained: Selling Your Miami House as a Foreign National

If you’re a foreign national selling a Miami property, the Foreign Investment in Real Property Tax Act (FIRPTA) requires 15% of the gross sale price to be withheld at closing and sent to the IRS. Here’s exactly how it works and what to plan for.

Who Counts as a Foreign National Under FIRPTA

Anyone who is not a US citizen and not a US tax resident under IRS “substantial presence” rules. Green card holders are exempt. Snowbirds who spend 6+ months in the US typically qualify as tax residents and are exempt. Foreign nationals with only vacation-time presence generally trigger FIRPTA.

The 15% Withholding Math

On a $500,000 Miami sale, FIRPTA withholds $75,000 at closing. This is on the GROSS price — not your profit. If you actually owe less in capital gains tax, you file for a refund (which takes 12-24 months to receive).

Exemptions and Reduced Withholding

Sales under $300,000 with buyer intending to use as personal residence: exempt entirely. Sales $300,000-$1,000,000 with buyer intending personal residence: 10% withholding. Sales over $1,000,000: 15% regardless of buyer intent. Withholding certificate (Form 8288-B): reduces withholding to actual tax liability but takes 90 days to obtain.

The Withholding Certificate Strategy

File Form 8288-B 90 days before closing to request reduced withholding based on your actual expected capital gains tax. If approved, withholding drops to actual liability instead of 15% gross. Requires IRS ITIN, tax preparer, and 90-day lead time.

How Cash Buyers Handle FIRPTA

Homeinc closes foreign national transactions regularly. We work with FIRPTA-experienced title companies who handle the withholding correctly at closing. If you have time, we recommend filing Form 8288-B first. If not, we close with standard 15% withholding.

undefinedundefinedundefinedundefined