Q: I am a foreign national who owns a condo in Florida that I want to sell. I am being told that a portion of the sales price needs to be sent to the IRS at the closing. Is this true? And if so, how can I get it back? – Sonia
A: Yes, when non-resident foreigners sell a property in the United States, a portion must be held back and sent to the IRS.
The Foreign Investment in Real Property Act of 1980, known as “FIRPTA,” requires the property’s buyer to remit 15% of the purchase price to the IRS. You read that correctly; it is the buyer’s responsibility to collect and submit the funds to the tax collector. If the buyer fails to do this, they can be held responsible for paying the tax, which is one of the reasons that sellers need to prove their residency when selling property.
