Generally speaking, the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA) requires that a non-U.S. citizen have 10% of a real property transaction (typically based on selling price) withheld as a “deposit” for potential tax liability. Like most tax laws, there are defenders and detractors of FIRPTA. Recent declines in inbound foreign investment due to current market conditions has renewed the discussion on FIRPTA's pros and cons.
While NAR has no official position at this time, international property specialists need to be familiar with the law . Read NAR Treasurer Jim Helsel's recent blog on FIRPTA, and then download a 20-min. training module for use in a company sales meeting on working with foreign nonresidents who buy, sell or rent U.S. property.
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