What is FIRPTA, and how much will the IRS withhold when I sell my Miami property?

FIRPTA is the single most-asked question by foreign sellers of US real estate. The mechanism is simple: when a foreign person sells US real estate, the BUYER (or their settlement agent) is required to withhold 15% of the gross sales price and send it to the IRS within 20 days of closing.

Three rates, depending on the deal

• 15% standard, applies in most foreign-seller transactions.
• 10% reduced, sale price ≥$300,000 but ≤$1,000,000, AND buyer signs an affidavit they'll use the property as their personal residence.
• 0% exemption, sale price ≤$300,000 AND buyer affidavit for personal residence (no IRS filing required).

How to get most of your withholding back faster

If your actual federal tax liability on the gain is less than the 15% gross-price withholding (very common), you have two routes:

1. File Form 8288-B BEFORE closing, apply for a Withholding Certificate based on actual expected gain. If granted, withholding is reduced or eliminated at the closing table. Processing time: 90 days, start early.
2. File a US tax return (Form 1040-NR) AFTER closing, claim the overpayment as a refund. Common processing time: 6–12 months.

Common mistakes that cost real money

• Missing the Form 8288-B filing window, once the closing happens, you're stuck waiting for a 1040-NR refund.
• Forgetting the state side, Florida has no state income tax, but other states do. Florida buyers/sellers face only federal FIRPTA.
• Assuming the broker handles it, they don't. FIRPTA is the seller's responsibility; the title company executes but doesn't strategise.

“FIRPTA is not a tax, it's an advance payment of a tax that may or may not be owed. The withholding certificate exists precisely so you don't lend the IRS money interest-free for 18 months.”