The Foreign Investment in Realty Property Tax Act
FIRPTA stands for the Foreign Investment in Real Property Tax Act of 1980. It’s a U.S. law that ensures foreign individuals and entities pay taxes when they sell real estate property in the United States.
Here’s a brief overview:
Purpose: FIRPTA was enacted to ensure that foreign sellers of U.S. real property pay their fair share of taxes.
Withholding: When a foreign person sells U.S. real estate, the buyer is required to withhold a certain percentage (up to 15%) of the sale price and remit it to the IRS.
Scope: FIRPTA applies to various types of real estate transactions, including sales of homes, land, and commercial properties.
Exemptions: There are certain exemptions, such as if the property is the buyer’s primary residence and the sale price is $300,000 or less.
For more information about FIRPTA and it’s implications if the home you are buying is being sold by a foreign individual or entity, or if you are selling a home locally but are a foreign individual or entity, contact Team Derrick Coates at 520-456-4554 today. We can help you find a law firm that fits your situation.