WHAT IS FIRPTA AND HOW DOES IS AFFECT MY HOME SALE?
- almarovelo
- Apr 11, 2019
- 1 min read
The Foreign Investment in Real Property Tax Act, better known as FIRPTA, may affect both sellers and buyers, but it concerns primarily foreign sellers. The act provides that the settlement agent involved in the transaction must withhold 10-15% of the purchase price from the proceeds to the seller.
10% of the purchase price withheld for properties under $1 million
15% of the purchase price withheld for properties $1 million and over
Are there any exceptions to the withholding?
The buyer is purchasing the property to use as his/her primary home, therefore it cannot be an investment property, second home, etc. Buyer must sign an affidavit that the house will be used as primary residence.
The purchase price is under $300,000
REFERENCE: HBI Tax
