Florida FIRPTA Withholding Calculator

How this calculator works

FIRPTA — the Foreign Investment in Real Property Tax Act, codified at IRC § 1445 — is the federal-tax obligation most likely to derail a Florida real-estate closing involving a foreign seller. The mechanics are unusual: the obligation falls on the buyer, not the seller. The buyer (or the buyer's withholding agent — almost always the title company on a Florida closing) must withhold a percentage of the gross sale price from the seller's proceeds and remit it to the IRS within 20 days of closing. The withheld amount is a deposit against the foreign seller's eventual U.S. federal income tax liability on the gain; the seller reconciles via Form 1040-NR or Form 1120-F after year-end.

The calculator answers three questions a Florida title agent, real-estate attorney, or buyer's counsel has to settle before closing: (1) what is the correct statutory withholding rate, (2) how much cash does the buyer need to hold back from the seller's proceeds at closing, and (3) what is the buyer's personal exposure if the withholding is mishandled.

Why FIRPTA is a Florida concern

Florida has the highest foreign-buyer concentration of any U.S. state. The National Association of Realtors' 2024 International Transactions in U.S. Residential Real Estate report puts annual foreign-buyer purchase volume in Florida at roughly $13 billion — about 20% of the national foreign-buyer total. Miami-Dade, Broward, Orange, and Collier counties carry the bulk of that volume; Brazilian, Canadian, Argentine, Colombian, and Mexican buyers dominate the demographic mix. A Florida title agent who handles even a moderate residential book will encounter FIRPTA transactions multiple times a year.

The Florida-specific complication: foreign-seller transactions are routine enough that they are easy to miss. A title agent who treats the seller's name and presence at closing as a proxy for U.S. tax residency will create personal FIRPTA liability for the buyer. The customary protection — a Treas. Reg § 1.1445-2(b) non-foreign affidavit signed under penalty of perjury — should be obtained on every closing, not just the ones with obviously foreign sellers. A Brazilian-born seller who has been a U.S. permanent resident for fifteen years is not foreign for FIRPTA; a U.S.-citizen seller's foreign-corporation single-member LLC may well be foreign for FIRPTA. The affidavit, not appearance, controls.

The three-tier rate schedule for individual foreign sellers

Under IRC § 1445(b)(5), as amended by the 2015 PATH Act, an individual, partnership, or trust seller is subject to a three-tier withholding schedule keyed on sale price and buyer intent:

• Sale price at or below $300,000, AND the buyer intends to use the property as a residence: 0% withholding. This is the statutory exemption. The buyer (or a family member) must intend to occupy the property for at least 50% of the days the property is in use during each of the first two 12-month periods after closing (Treas. Reg § 1.1445-2(d)(1)). Investment or rental purchases do not qualify.

• Sale price $300,001 to $1,000,000, AND the buyer intends to use the property as a residence: 10% withholding. The intermediate tier preserved by the PATH Act when the standard rate was raised to 15%. Same owner-occupied test as the exemption.

• All other transactions (sale price above $1,000,000, OR buyer does not intend to occupy): 15% withholding. The general statutory rate under IRC § 1445(a) post-PATH Act.

The owner-occupied test is the most-disputed element of the schedule. A buyer who claims owner-occupied intent at closing and then converts the property to a vacation rental within the first 24 months has retroactively triggered a 15% withholding deficiency — and the buyer is the party on the hook to the IRS. The customary protection is an owner-occupied affidavit at closing and a documented diligence trail showing the buyer's actual occupancy through the first 24 months.

Foreign corporate sellers — the 21% rate

A foreign corporate seller is subject to FIRPTA withholding at 21% — the federal corporate income tax rate following the 2017 Tax Cuts and Jobs Act, which dropped the prior 35% rate. The statutory basis is IRC § 1445(e) and § 897(a)(1), which treat a foreign corporation's gain on disposition of a U.S. real property interest as effectively connected income subject to U.S. corporate tax. The owner-occupied tiers do not apply to corporate sellers.

This is a frequent surprise on Florida closings. A common foreign-investor pattern is to hold Florida real estate through a foreign corporation — typically a British Virgin Islands, Cayman, or Bahamas entity — for privacy, asset-protection, or tax-planning reasons. When the property sells, the buyer must withhold 21%, not the 15% rate that would apply if the foreign individual held title directly. On a $2,000,000 Miami-Dade penthouse held through a BVI corporation, the FIRPTA withholding is $420,000 — $120,000 more than the 15% rate. The closing-table conversation about whether the entity structure was worth the tax differential is awkward; doing the math before contract is better.

A worked example: $500K Tampa condo, foreign individual seller, owner-occupying buyer

A Tampa condo sale at $500,000 by a foreign individual seller (Brazilian national, not a U.S. tax resident) to a U.S.-citizen buyer who intends to use the unit as their primary residence:

• Statutory rate applied: 10% — sale price $300,001 to $1,000,000, owner-occupied buyer (IRC § 1445(b)(5) / PATH Act intermediate tier)
• Required FIRPTA withholding: $500,000 times 10% = $50,000
• Net to foreign seller at closing: $500,000 minus $50,000 = $450,000 (before state-side closing costs)
• Buyer's filing obligation: Form 8288 with Form 8288-A attached, filed with the IRS within 20 days of closing, remitting the $50,000 by check, ACH, or wire

If the same buyer had purchased as an investor rather than for owner-occupancy, the rate would jump to 15% — $75,000 withholding, $425,000 to the foreign seller. A $25,000 swing turning on a single line in the buyer's affidavit.

A worked example: $1.5M Naples beach house, foreign corporate seller

A Naples beach house owned by a Cayman Islands corporation, sold to a U.S.-citizen retiree as a primary residence:

• Statutory rate applied: 21% — foreign corporate seller (IRC § 1445(e); the owner-occupied tiers do not apply to corporate sellers)
• Required FIRPTA withholding: $1,500,000 times 21% = $315,000
• Net to foreign seller at closing: $1,500,000 minus $315,000 = $1,185,000
• Buyer's filing obligation: Form 8288 + Form 8288-A within 20 days of closing

Had the property been held by the individual shareholder rather than the Cayman corporation, the withholding would have been 15% — $225,000 — a $90,000 swing. The Cayman corporation may have provided legitimate non-tax benefits (privacy, asset protection), but the FIRPTA cost at the back end is the price.

The Form 8288-B reduced-rate certificate

A foreign seller whose actual expected U.S. tax liability is less than the statutory withholding can apply to the IRS for a withholding certificate on Form 8288-B. The application includes a computation showing the seller's basis, the realized gain, the applicable tax rate, and the resulting U.S. federal income tax. If approved, the IRS issues a certificate specifying a reduced withholding amount — sometimes a fraction of the statutory rate, sometimes zero.

The mechanics of the 8288-B path:

• Filing timeline: the application must be filed at or before closing for the buyer's withholding to be escrowed pending IRS determination. If filed after closing, the buyer's 20-day remittance deadline runs normally and the statutory amount goes to the IRS; the seller's remedy is the Form 1040-NR refund process after year-end.
• Processing time: the IRS targets ~90 days from a complete application. Incomplete applications restart the clock.
• Escrow: the buyer's required withholding is held by the closing agent (or, less commonly, a third-party escrow) pending the IRS determination. The escrow agreement specifies the disposition of the funds — to the IRS if denied or no determination, to the seller if approved at a lower rate.
• Common 8288-B scenarios: loss sales (no gain, no tax — full waiver), low-basis sales where the actual tax is less than statutory withholding, § 1031 like-kind exchanges (non-recognition transfer), § 351 / § 721 non-recognition contributions, and installment sales where only the closing-year principal is currently realized.

A foreign seller who anticipates a 5% effective federal tax rate on a $1M sale (gain of, say, $250,000 at a 20% long-term capital gains rate, divided by the $1M amount realized) can file 8288-B to reduce the withholding from $100,000 (10% statutory) to $50,000 — a $50,000 cash-flow improvement at closing.

Buyer's personal liability under IRC § 1445

The most-load-bearing fact about FIRPTA is this: under IRC § 1445(a), the buyer is personally liable for the withholding if not properly remitted. The liability is the full statutory withholding amount — not just the seller's actual tax — plus:

• Interest under IRC § 6601 (currently roughly 8% annually, compounded daily)
• Failure-to-file penalty under IRC § 6651 (up to 25% of the unpaid withholding)
• Failure-to-deposit penalty under IRC § 6656 (2% to 15% of the unpaid withholding, escalating with the lateness)
• Potential trust-fund-recovery penalty under IRC § 6672 for individual buyers or responsible persons at a corporate buyer

The seller's foreign status is the buyer's diligence problem. The IRS does not chase the foreign seller first and turn to the buyer only on failure of collection — the buyer is jointly and severally liable from day one, and as a practical matter the buyer is easier for the IRS to reach (U.S. citizen, U.S. assets, U.S. banking).

The customary buyer protection is a Treas. Reg § 1.1445-2(b) non-foreign affidavit. If the seller signs an affidavit under penalty of perjury attesting non-foreign status and the affidavit is later found false, the buyer is generally protected so long as the buyer had no actual knowledge of the seller's foreign status. The affidavit must include the seller's U.S. taxpayer identification number; an affidavit without a TIN does not provide the safe harbor.

What this calculator does NOT do

This calculator computes the federal FIRPTA withholding under IRC § 1445. It does not:

• Compute the foreign seller's actual U.S. federal income tax on the gain. The withholding is a deposit; the actual tax is determined on Form 1040-NR (individual) or Form 1120-F (corporate). The actual tax depends on basis, holding period, depreciation recapture, treaty positions, and the seller's other U.S.-source income.
• Address the partnership-interest transfer rules under IRC § 1446(f). Transfers of partnership interests in partnerships holding U.S. real property have their own withholding regime (10% on the amount realized, with separate certificate procedures). Use a § 1446(f)-specific resource.
• Handle the state-side transactional taxes. Florida documentary stamps, the Miami-Dade surtax, mortgage stamps, and the non-recurring intangible tax are entirely separate from FIRPTA — they apply whether the seller is foreign or domestic. See the Documentary Stamp Tax Calculator for the state-side analysis.
• Address the buyer's diligence file. The non-foreign affidavit, owner-occupied affidavit, and withholding-escrow agreement are the buyer's protection — the calculator surfaces the numerical answer; the affidavits are still required.

How this page is maintained

The IRC § 1445 rate schedule has been stable since the PATH Act took effect on 02/17/2016: 0% / 10% / 15% for individuals, 21% for foreign corporations (the corporate rate dropped from 35% to 21% effective 2018 under the Tax Cuts and Jobs Act). We refresh the constants and the linked IRS FIRPTA Withholding page each time the IRS publishes a new revenue procedure or notice affecting the schedule, and after each session of Congress in case of statutory change.

Last reviewed: 2026-05-15 against IRC § 1445, Treas. Reg § 1.1445-1, and the IRS FIRPTA Withholding page.