When a foreigner sells real estate located in the United States, he or she will often be subject to FIRPTA (The Foreign Investment in Real Property Tax Act of 1980).

FIRPTA requires that the purchasers of real estate withhold a certain amount of the purchase price in an attempt to ensure the payment of income tax due pursuant to the sale of such Property.

FIRPTA itself has many exceptions and regulations including provisions allowing for the application for a withholding certificate from the IRS allowing for a reduction of the amount of withholding.

Foreign persons and entities who are considering selling, and especially those who are in the process of selling United States real estate should consult with a tax attorney to learn about their options and maximize the amount they will receive at closing.