FIRPTA Withholding Rate to Change in February 2016
Posted by Team Donovan on
Thinking about selling your Orlando vacation property? You should be aware of an upcoming change in the U.S. Foreign Investment in Real Property Tax Act, otherwise known as FIRPTA.Â
As of Feb. 16, 2016, any non-resident alien who sells an interest in U.S. real property will be subject to a 15 percent withholding rate on FIRPTA at closing. That is an increase from the current rate of 10 percent.Â
The change means that anyone who buys property in the U.S. held by a foreign seller must withhold 15 percent of the gross purchase price. The title company remits the amount to the IRS at closing. The withholding would generally offset any tax actually due from the non-resident alien on the sale and would be eligible for a refund to the extent that the…