FIRPTA (Foreign Investment in Real Property Tax Act) requires buyers or transferees to withhold tax when acquiring U.S. real property interests from foreign persons. The standard withholding rate is 15% of the gross sales price, though different rates may apply in certain situations.

Determining When FIRPTA Applies

First, you must determine whether the seller is a foreign person or entity. The rates below apply, according to the sales price and intent of purchase.


Sale Price (< or equal to $300,000) (Residence): No withholding required, provided the buyer or their family plans to use the property as a residence for at least 50% of the first two years after purchase.

Sale Price (< or equal to $1,000,000) (Residence): Reduced withholding rate of 10% if the buyer intends to occupy it as a primary residence.

Sale Price (> $1,000,000) OR Property is an Investment: Standard withholding rate of 15%, regardless of buyer intent.

Using Form 8288

Form 8288 is the “U.S. Withholding Tax Return for Dispositions by Foreign Persons of U.S. Real Property Interests”. The buyer (withholding agent) uses this form to report the sale and the withholding amount to the IRS.

Key Steps for Completing Form 8288

When filling out Form 8288, you’ll need to provide:

• Withholding agent’s information (name, address, TIN) – typically the buyer or closing agent
• Property description and location
• Date of transfer
• Foreign transferor’s details (seller’s name, TIN, address)
• Total sale price
• Amount withheld (usually 15% of sale price)

Form 8288-A Requirements

You must prepare Form 8288-A (“Statement of Withholding on Dispositions by Foreign Persons of U.S. Real Property Interests”) for each foreign person from whom tax was withheld. Attach copies A and B of Form 8288-A to Form 8288, and keep Copy C for your records.

Filing Deadlines and Payment

The buyer must file Form 8288 and pay the withheld amount within 20 days after the date of transfer. Mail the completed forms to: Internal Revenue Service, P.O. Box 409101, Ogden, UT 84409.

After Processing

After the IRS processes the forms, the seller receives a stamped copy of Form 8288-A, which serves as proof of withholding and credit for the tax withheld. The seller must attach this stamped Form 8288-A to their U.S. income tax return to receive credit for the withholding.

Reducing Withholding

If the seller wants to reduce or eliminate FIRPTA withholding, they can apply for a withholding certificate by filing Form 8288-B with the IRS. This application must be filed after the property goes under contract but before closing, and requires information about the sales price, adjusted basis, and maximum U.S. tax liability.

Sirius Tax Group is Here to Assist You

We recently facilitated the ITIN applications for Asian and Middle Eastern foreign nationals who sold property here in the United States. One of the sellers needed an ITIN for the real estate settlement; the other needed an ITIN for a transaction in a previous year. They were both approved, and their withholding will be remitted to them.

Asian National
For the Asian foreign national, they needed an ITIN at the time of settlement. We also attended the closing and ensured that all paperwork was handled in a timely fashion.

Middle Eastern National
For the foreign national from the Middle East, we worked with another industry professional to ensure that they would receive the ITIN needed, in order to recoup withholding from a transaction in a previous year.


If you are a foreign national, real estate professional, attorney or tax practicioner, please don’t hesitate to reach out to us to assist you with FIRPTA withholding.