What is FIRPTA and how does it affect selling to a foreign buyer?

FIRPTA may require buyers of U.S. real property from foreign sellers to withhold a percentage of the gross sale price and remit it to the IRS. If you are a foreign national selling property, this withholding comes directly from your proceeds at closing. You can apply for a withholding certificate to reduce the amount if your actual tax liability is lower, but the application should be filed well before closing. Withholding rates and exceptions depend on transaction-specific facts - consult a tax attorney for current rules. U.S. citizen sellers are generally not affected.