FIRPTA(Foreign Investment in Real Property Tax Act)
FIRPTA (Foreign Investment in Real Property Tax Act) U.S. Buyers of Foreign owned U.S. Real Estate and Foreign Sellers of US Real Estate should be aware of FIRPTA rules.
FIRPTA rules mandate the Withholding of funds on any disposition of a United States Real Property Interest by a Foreign Seller.
Plainly stated: If you are a Foreign Seller or you are a Buying from someone who might be a Foreign Seller of US Real Estate, you must understand that you have tax obligations at closing which you must comply with or face harsh penalties.
The general rule is you must withhold 15% of the contract sale price and the money must be sent to the US Treasury to hold as deposit against potential tax the Foreign Seller might owe. If the Buyer fails to comply with the rules, the IRS will come after the Buyer, the Seller, both Realtors and the Title Company with penalties. If you have questions about FIRPTA, call our office 281-578-1040 or contact us here http://www.global-taxsolutions.com/contact-us/ and we will explain the rules and how to avoid the potential “Deal Killer” that FIRPTA can be.