Can FIRPTA Withholding Be Reduced Before Closing?
Can FIRPTA Withholding Be Reduced Before Closing?
Yes—in many transactions, it may be possible.
Many foreign sellers are surprised to learn that FIRPTA withholding may be reduced before closing through a properly prepared and timely submitted Form 8288-B Withholding Certificate Application.
Why This Matters
Under FIRPTA, buyers are generally required to withhold a percentage of the gross sales price when purchasing U.S. real estate from a foreign seller.
However, the withholding amount is not always the seller's actual U.S. tax liability.
In some situations, the seller's final tax obligation may be substantially lower than the required withholding.
How Form 8288-B Can Help
When properly prepared and timely submitted, a withholding certificate application may allow:
Reduced withholding
Suspension of the withholding remittance while the IRS reviews the application
Faster access to excess funds after closing
Timing Is Critical
In many cases, the withholding certificate application should be submitted on or before the date of transfer to preserve important procedural protections.
Unfortunately, many foreign sellers first learn about FIRPTA only days before closing, leaving very little time for planning.
The earlier the transaction is evaluated, the more options may be available.
How We Help
At FIRPTA Refunds, we assist foreign sellers, buyers, attorneys, Realtors, and settlement agents with:
FIRPTA withholding certificate applications
ITIN coordination
FIRPTA compliance planning
Closing support
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