Selling from abroad goes smoothly when it starts on time.
International owners sell here every week. The one thing that works differently is a withholding at closing, and with a little planning most of it comes back to you quickly. Here's how it works.
What happens at the closing table
When a seller who isn't a U.S. person sells U.S. property, the buyer holds back 15% of the sale price and sends it to the IRS. This rule is called FIRPTA. It's a deposit against tax, not the tax itself; your actual tax is based only on your gain, which is usually far smaller.
On a $900,000 sale, $135,000 is held back at closing. Most of that is typically yours to recover. There are three ways it plays out:
- Apply early for a withholding certificate (the usual route). Your cross-border accountant files IRS Form 8288-B asking that only the tax actually due be withheld. The IRS takes about 90 days to reply, and the closing agent holds the funds in escrow until it does. Started when you list, it's usually in hand by closing.
- Claim it back with your tax return. If no certificate is filed, the 15% is withheld and you recover the excess with your U.S. non-resident return the following year.
- A reduced rate for some buyers. If the buyer will live in the home and the price is $1,000,000 or less, the withholding can drop to 10%, or to zero at $300,000 or less. That depends on the buyer.
When you decide to sell, call your cross-border accountant that same week. The 90-day clock is the IRS's, so starting early is what keeps your money moving. We can introduce you to accountants who file these every month.
What's different when the seller lives abroad
- Your home country
- The gain is usually taxed where you live as well, with a credit for U.S. tax paid. Your accountant will coordinate the two returns and the exchange-rate effect.
- Signing from abroad
- Closing documents can be signed abroad before a notary or a U.S. consulate, or by power of attorney. We arrange the right format early so the documents are accepted the first time.
- The association
- Condominium estoppel letters, the reserve and inspection disclosures Florida requires, and approval of the buyer. Gathering them early means buyers' lawyers see a complete file.
- Your proceeds
- Wiring the proceeds home is routine. Planning the currency conversion, rather than taking the closing-day rate, can make a real difference on a sale this size.
The right brokerage for an international sale
Buyers for South Florida coastal property come from the same countries international sellers do. We introduce you to a licensed Florida brokerage that markets internationally, in more than one language, and we coordinate the tax and closing side with your accountant and attorney.
Planning a move of capital, property or family to South Florida?
Tell us where you live and what you're planning. We'll reply with clear next steps and, where you need one, an introduction to the right licensed professional. Usually within one business day.