FIRPTA
Real estate · Reinvent NY glossary
The Foreign Investment in Real Property Tax Act requires that when a foreign person (non-US tax resident) sells US real property, the buyer must withhold 15% of the gross sale price and remit it to the IRS. For a $1 million sale, $150,000 is withheld. The foreign seller can recover overpayments by filing a US tax return (Form 1040-NR) — the actual tax owed is based on capital gains, not the full sale price. Withholding can be reduced by obtaining a Withholding Certificate (Form 8288-B) before closing. FIRPTA planning is essential for foreign investors to manage cash flow at sale time.
Related Terms
Related Articles
- →All Cash vs Mortgage in NYC: How Foreign Buyers Decide
Cash closes faster and wins bids in NYC, but financing has quiet advantages for foreign buyers: estate tax exposure, liquidity, and yield.
- →NYC Apartment Renovation Rules: Permits, Boards, Approvals
What it takes to renovate a NYC condo or co-op: alteration agreements, board approval, DOB permits, landmark review, and honest timelines before work begins.
- →NYC Landlord Requirements: Deposits, Heat and Disclosures
The legal duties that come with renting out a NYC apartment: the deposit cap, heat season rules, required disclosures and filings.
- →NYC Eviction Process for Landlords: Steps and Timeline
How eviction works in New York City: why a lockout is illegal, the notices that start the case, the housing court steps, and the timelines to plan around.
Keep reading
Looking at a specific building or budget?
Talk to us about it