What is FIRPTA and how does it affect foreign buyers selling in Florida?

FIRPTA stands for the Foreign Investment in Real Property Tax Act, and it is the U.S. rule that makes sure taxes are collected when a foreign person sells U.S. real estate.

Rather than relying on the foreign seller to file and pay later, the law requires the buyer, or the closing agent on their behalf, to withhold a portion of the sale price and send it to the IRS.

The standard withholding is 15 percent of the total amount realized in the sale. There are lower rates for certain purchases: 10 percent if the buyer plans to use the property as a home and the price is $1,000,000 or less, and no withholding for a personal residence priced at $300,000 or less.

The withheld amount is reported on IRS Form 8288 within about three weeks of closing. If the seller's actual tax bill is lower, they can apply for a withholding certificate or recover the difference when they file a U.S. tax return.

Miami is the top U.S. market for foreign home buyers, and international buyers are a meaningful part of the local market. Miami Realtors' 2026 international report again ranked the city first for foreign buyers, and international purchases here have been rising.

That means South Florida sellers may encounter foreign buyers more often than sellers elsewhere, and knowing whether FIRPTA applies is part of a smooth closing.

For a seller, the key is to know whether you are a U.S. person for tax purposes and to be ready to document it at closing. For a buyer, the key is to confirm the seller's status so your closing agent withholds correctly and you are not caught off guard by an IRS filing duty.

This is a tax matter, so the closing agent and a tax professional handle the forms. The important thing is that it is identified early, before the closing date.

I coordinate closings with foreign buyers regularly and make sure the FIRPTA question is answered before we reach the closing table, so there are no surprises for either side.

I also connect sellers and buyers with the tax professionals and closing agents who handle the forms correctly.