FIRPTA Withholding Calculator
On an international closing, part of the seller's proceeds never reaches the seller. This shows how much, and why.
What This Calculator Does
Runs the FIRPTA rules against your sale price and the buyer's intended use of the property, returning the withholding amount and the rate that produced it. It also shows what the seller actually takes from the table before any refund — the number that catches people off guard.
Who Is This For
Foreign nationals selling US real estate, buyers who need to grasp that the obligation rests on them, and agents on either side of an international Miami transaction who want this settled well before closing week.
How It Works
Enter the sale price and state whether the buyer intends to use the property as a residence. The correct rate is applied and the withholding displayed. Have a US tax professional confirm the outcome before the closing statement is finalized.
Frequently Asked Questions
Which rate applies to my sale?
15% of the gross sale price is the default. 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%. At $300,000 or less, with a buyer affidavit committing to residential use, withholding is zero.
Whose obligation is the withholding?
The buyer is the withholding agent. Not the seller, not the title company, even though title normally handles the mechanics. Where the amount is not withheld and remitted, the IRS can pursue the buyer for it along with penalties and interest — which is why buyers in international deals should never treat FIRPTA as the other side's concern.
Is the withholding the tax itself?
No. It is a deposit against the seller's US tax liability on the gain, computed on the gross price instead of on profit. Where the gain is modest — or the sale is at a loss — the withholding routinely exceeds the tax due, sometimes by a wide margin.
How is the excess recovered?
By filing a US tax return for the year of sale and claiming credit for the amount withheld. That requires a US taxpayer identification number, and obtaining one takes time, so begin well ahead of closing rather than afterwards.
Can the withholding be reduced in advance?
Yes — Form 8288-B applies to the IRS 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 response instead of being remitted; filed late, the deposit goes in and the refund becomes a waiting game.
Does the residence rate need paperwork?
It does. Both the reduced and the zero rate rest 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 offers the buyer no protection if the IRS asks later.