The buyer owes the tax on the seller's gain.

Here is the part that catches people. When the seller of U.S. real property is a foreign person, federal law requires tax to be withheld out of the sale proceeds. The money comes from the seller. But the IRS does not look to the seller to make sure it was withheld.

It looks to the buyer. In the IRS's own words, in most cases the buyer, as transferee, is the withholding agent.¹ The seller has taken their proceeds and left the country. The obligation stayed behind with the person who bought the house.

What the rule is

FIRPTA, the Foreign Investment in Real Property Tax Act, operates through section 1445 of the Internal Revenue Code.¹ It is federal, so it works the same way in Florida as in any other state. Florida having no state income tax changes nothing about it, which is a point worth making out loud because the two get conflated constantly.

The standard withholding rate is 15% of the amount realized.¹ Read "amount realized" carefully, because this is where the number gets shocking: it generally refers to the sales price, not the seller's profit. A foreign seller seeing 15% of the gross price withheld on a property they barely broke even on is not a misunderstanding of the rule. That is the rule.

Withholding is not the final tax. It is a prepayment against whatever the seller's actual liability turns out to be, which is why the relief mechanisms further down matter.

The two thresholds every listing agent should know

There are two numbers, and they both depend on what the buyer intends to do with the property, not on anything about the seller.

• $300,000 or less, buyer will use it as a residence: no withholding. The IRS grants an exception from withholding where the amount realized is not more than $300,000 and the buyer acquires the property for use as a residence.²
• More than $300,000 but not more than $1 million, buyer will use it as a residence: 10%. The reduced 10% rate applies to a disposition of property acquired by the transferee for use as a residence within that band.³
• Everything else: 15%.¹

The residence condition is specific and it is not a formality. The IRS requires that the buyer, or a member of the buyer's family, plans to occupy the property for at least 50% of the days it is used during each of the first two 12-month periods after the transfer.²

Which means an investor buying a rental at $280,000 does not get the exception, and a buyer who intends to live in a $900,000 property may qualify for 10% rather than 15%. Same seller, same property, different answer depending on the buyer. On a deal where the price sits near either threshold, this is worth knowing before the closing statement is drafted rather than after.

The certification that ends the question

Most transactions never reach any of the above, because most sellers are not foreign persons. The way that gets established is a certification: the seller gives the buyer a statement, signed under penalties of perjury, that the seller is not a foreign person, including their name, U.S. taxpayer identification number, and home or office address.²

Worth knowing where the closing agent fits here, because this is the role people mix up with being the withholding agent. A qualified substitute, which the IRS describes as including the attorney or title company handling the closing, may receive and validate that certification on the buyer's behalf.² That is a procedural role in handling the paperwork. It is not the same as being the party the IRS holds liable, which remains the buyer.

And the certification is not a magic shield. It stops protecting the buyer if the buyer has actual knowledge, or receives notice from an agent or substitute, that the certification is false.² Nobody gets to collect a piece of paper they already know is wrong and call the problem solved.

Twenty days, and the clock starts at closing

Where withholding is required, the transferee must file Form 8288 and transmit the withheld tax to the IRS by the 20th day after the date of transfer, reporting it on Form 8288 along with Form 8288-A.³

Twenty days is not long, and the deadline runs from closing rather than from whenever somebody notices FIRPTA applies. This is the strongest practical argument for identifying a foreign seller early in the transaction instead of in closing week.

When the withholding is more than the actual tax

This happens often, because 15% of a gross sales price has no relationship to what a seller actually gained. A seller who sold at a small profit, or at a loss, can easily see far more withheld than they will ever owe.

The mechanism for that is Form 8288-B, an application to the IRS for a withholding certificate, which may reduce or eliminate withholding in certain cases including where the withholding amount exceeds the seller's maximum tax liability.³

Two things to be realistic about. It is an application, so the outcome and the timing are the IRS's to decide and nobody in the transaction controls either. And it is tax work. Whether a particular seller qualifies, and what their maximum tax liability actually is, belongs with a CPA or a tax attorney rather than with a title order or a listing agent.

What this means at listing

One question, asked early, prevents nearly all of the trouble: is the seller a U.S. citizen or a resident for tax purposes? Not "do they live abroad," and not "where are they from." Foreign person status is a tax question and it does not track where somebody happens to be living.

If the answer is no, or the seller is unsure, that is a conversation for a CPA or tax attorney at the start of the transaction. Not at the closing table, where there are twenty days on a federal clock and the buyer is the one exposed.

Related reading while you are checking a file: the other things that surface late are covered in the debts a title search cannot find, and if the seller is married and the property is their residence, see why homestead rights follow the marriage rather than the deed.

The short version

A foreign seller means withholding, generally 15% of the sales price rather than of the gain. The buyer is the withholding agent and carries the liability. Buyer-occupied property at $300,000 or less is excepted, and 10% applies between $300,000 and $1 million on the same residence condition. A non-foreign certification takes a transaction out of it unless the buyer knows it is false. Form 8288 and the tax are due within 20 days of transfer, and Form 8288-B is the route to reduced withholding.

Ask the question at listing. If a file involves a foreign seller, call us early and bring a tax professional in at the same time, because the parts of this that are not title work are the parts with the deadline attached.

Common questions

What is the FIRPTA withholding rate in Florida?

The standard rate is 15% of the amount realized, which generally means the gross sales price rather than the seller's profit. A reduced rate of 10% applies where the buyer is acquiring the property for use as a residence and the amount realized is more than $300,000 but not more than $1 million. FIRPTA is federal law under Internal Revenue Code section 1445, so the rates are the same in Florida as anywhere else in the United States.

Who is responsible for FIRPTA withholding, the buyer or the seller?

The IRS states that in most cases the buyer, as transferee, is the withholding agent. The money comes out of the seller's proceeds, but the obligation to withhold and remit it sits with the buyer. That is why a missed withholding becomes the buyer's problem rather than the departed seller's.

Is there a FIRPTA exemption for a home under $300,000?

There is an exception from withholding where the amount realized is not more than $300,000 and the buyer acquires the property for use as a residence. The IRS condition is that the buyer or a member of their family plans to occupy the property for at least 50% of the days it is used during each of the first two 12-month periods after the transfer. It depends on the buyer's actual intended use, not only on the price.

How long does the buyer have to pay FIRPTA withholding to the IRS?

The IRS instructions require the transferee to file Form 8288 and transmit the withheld tax by the 20th day after the date of transfer. The withheld amount is reported on Form 8288 with Form 8288-A.

How does a seller avoid FIRPTA withholding if they are not a foreign person?

By giving the buyer a certification, signed under penalties of perjury, stating that the seller is not a foreign person and including the seller's name, U.S. taxpayer identification number, and home or office address. A qualified substitute, such as the attorney or title company handling the closing, may receive and validate that certification on the buyer's behalf. The certification does not protect the buyer if the buyer has actual knowledge, or receives notice, that it is false.

Can FIRPTA withholding be reduced if it exceeds the actual tax owed?

Form 8288-B is used to apply to the IRS for a withholding certificate, which may reduce or eliminate withholding in certain cases, including where the withholding amount exceeds the seller's maximum tax liability. It is an application to the IRS, so whether and when relief is granted is outside the control of anyone in the transaction.

Sources

Every factual claim above is drawn from the sources below. Statutory figures and deadlines were read from the official source rather than from secondary coverage. Sources last checked October 2, 2026.

1. FIRPTA Withholding — withholding agent, IRC section 1445, rates, and residence thresholds Internal Revenue Service Retrieved October 2, 2026
2. Exceptions from FIRPTA Withholding — residence exception and the non-foreign certification Internal Revenue Service Retrieved October 2, 2026
3. Instructions for Form 8288 — 20-day deadline, the 10% reduced rate band, and Form 8288-B Internal Revenue Service Retrieved October 2, 2026