Federal Tax Withholding In Real Estate Sales (FIRPTA)

Note: This is typically handled by escrow.

The federal Foreign Investment in Real Property Tax Act (FIRPTA) requires that in a real estate transaction where the seller is a foreign owner, the buyer must withhold income tax. 

Where Can I Learn More?

The IRS has resources available here:

• FIRPTA Withholding
• Definitions of Terms and Procedures Unique to FIRPTA
• Video Explainer on FIRPTA

Return to Federal Real Estate Disclosure Requirements