There are a number of myths about international sales that should be addressed early in the real estate process. For example, foreign buyers are usually subject to the Foreign Investment in Real Property Transfer Tax Act (FIRPTA), which involves withholding 10 percent of the proceeds of a sale as an estimated tax payment. There is a myth that foreign nationals won’t get their money back.
All FIRPTA is intended for is an estimated tax payment. If you overpay your taxes, your money will be returned. However if you buy a property for $100,000 and sell it for $1 million you can expect to have a tax liability.
Warmest Regards,
Kevin Aizenshtat
Realtor