FIRPTA and the Miami Home Sale: What Foreign Sellers Need to Know.
FIRPTA (the Foreign Investment in Real Property Tax Act) requires the buyer to withhold 15% of the gross sale price from any U.S. real estate transaction involving a foreign seller -- and "gross sale price" means the full purchase price, not the profit. On a $2 million Miami home, that's $300,000 held at closing. Foreign sellers can reduce or eliminate this withholding through a non-foreign certification (if you're a green card holder), the residential-use exception (rarely applicable in Miami's price range), or an IRS withholding certificate -- but that last option requires filing at least 90 to 120 days before closing.
By Lynley Ciorobea | July 1, 2026
If you're selling your home in Coral Gables, Coconut Grove, or Pinecrest, and you're not a U.S. citizen or a green card holder, the IRS may be entitled to 15% of your total sale price at closing. Not 15% of your profit. Fifteen percent of what the buyer pays you.
That distinction matters a lot. On a $2 million sale, it's $300,000 withheld at closing. On a $3 million sale, it's $450,000. The number can be significantly larger than the actual tax you owe, and the only way to fix that is to plan before you ever list the home -- not after.
This is called FIRPTA, and it's one of the most consistently misunderstood parts of selling real estate in Miami for international homeowners. It comes up regularly in the neighborhoods I work in, because a significant share of homeowners across southern Miami-Dade are non-U.S. citizens who purchased here years ago and are now considering a sale.
Here's what you need to know.
Who FIRPTA Applies To
FIRPTA applies to any "foreign person" selling U.S. real property. For tax purposes, a foreign person is anyone who is not a U.S. citizen and not a lawful permanent resident (green card holder).
If you're a Venezuelan, Colombian, Argentine, Brazilian, or European national who purchased a home in Miami and is now selling -- FIRPTA almost certainly applies to you. Being a long-time Miami resident doesn't change this. Having a U.S. bank account doesn't change this. Even having a U.S. tax ID number doesn't change this on its own. What matters for FIRPTA is your immigration status at the time of the sale.
FIRPTA also applies to foreign corporations, partnerships, trusts, and estates that own U.S. real property. If your Miami home is held in a foreign entity, the same rules apply.
One important clarification: if you are a green card holder (lawful permanent resident), you are not a foreign person under FIRPTA. Your closing attorney will prepare a certification, you sign it under penalty of perjury, and no withholding is required.
How the Withholding Works at Closing
Under FIRPTA, the buyer -- not the seller -- is technically the withholding agent. The buyer is legally responsible for ensuring the IRS receives the required amount. In practice, the closing attorney or title company handles all of it, but the obligation falls on the buyer's side of the transaction.
Here's the standard flow at a Miami closing involving a foreign seller:
The buyer's closing agent calculates 15% of the gross sale price.
That amount is withheld from the seller's proceeds.
The closing agent prepares IRS Form 8288 and Form 8288-A.
The withheld funds are remitted to the IRS within 20 days of closing.
The seller then files a U.S. federal income tax return reporting the capital gain from the sale. If the withheld amount exceeds the actual tax owed, the IRS refunds the difference. If you owe more than was withheld, you pay the balance.
The problem is the timing. That refund process can take months after closing. In the meantime, you've left a significant amount of money sitting with the IRS rather than walking away with it at the table. If your actual tax liability is much less than 15% of the gross price -- which is common when the seller has owned the property for many years and the original purchase price was substantially lower -- the difference between the withheld amount and what you actually owe can be large.
This is exactly why the withholding certificate process (described below) is worth knowing about before you list.
Exceptions and Ways to Reduce the Withholding
There are three main paths to reducing or eliminating FIRPTA withholding. Which one applies to your situation depends on your immigration status, the sale price, and how much lead time you have.
Non-foreign certification. If you are a U.S. citizen or a lawful permanent resident (green card holder), you simply sign a certification confirming your status. No withholding is required, and this is handled at closing without any advance filings. If this applies to you, make sure your closing attorney is aware from the beginning so they prepare the right documents.
The residential-use exception. If the buyer is purchasing the property as a primary residence and the sale price is $300,000 or less, no withholding is required. If the price is between $300,000 and $1,000,000 and the buyer will use it as a primary residence, the withholding rate drops to 10%. For most homes in Coral Gables, Pinecrest, Coconut Grove, or Palmetto Bay -- where the median sale price runs well above $1 million -- this exception won't apply. But it's worth noting for sellers in lower price ranges.
IRS withholding certificate (Form 8288-B). This is the most powerful tool for foreign sellers, and the one that requires the most lead time. By filing Form 8288-B with the IRS before closing, you can request that the withholding be reduced to match your actual expected tax liability rather than the full 15% of gross price.
The IRS typically takes 90 to 120 days to process a withholding certificate application. If you receive the certificate before closing, the reduced amount is withheld and sent to the IRS. If the certificate hasn't arrived by the closing date, the full amount is withheld, but it can be held in escrow by the closing agent while the IRS processes your application -- rather than being sent immediately to the government.
This path requires working with a real estate attorney experienced in international transactions and, in most cases, a CPA or international tax advisor who understands your full picture. The application involves demonstrating your expected gain, your basis in the property, and your projected tax liability.
Tax treaties. The U.S. has bilateral tax treaties with a number of countries, including Mexico, Colombia, Spain, and others, that may reduce withholding obligations for citizens of those countries. Whether a treaty applies depends on the specific treaty language and your individual situation. This is another reason to involve a qualified tax professional early.
Why Miami Sellers Need to Start This Conversation Early
The sellers who navigate FIRPTA well are the ones who bring it up at the very beginning -- when they first meet with their agent, not when the title company mentions it three days before closing.
If you want to apply for a withholding certificate, you need approximately four to five months of lead time between filing and closing. That means starting the process before you even list the home. For most sellers, that's a conversation that should happen during the initial strategy session -- alongside pricing, preparation, and timing.
A few other things worth knowing as you prepare:
You will almost certainly need a U.S. tax attorney or international CPA involved in your transaction. This is not something to handle without professional help.
Florida recommends using a closing attorney rather than a title-only company for transactions involving foreign sellers, because an attorney can provide legal guidance on the FIRPTA filing process in ways a title company cannot. (This is consistent with how I approach closings in my market -- I recommend attorney-led closings to my sellers generally, and it matters even more here.)
FIRPTA applies to all types of real property, including condos, single-family homes, and investment properties. If you own a condo in Coconut Grove or a waterfront home in Cocoplum and you're not a U.S. person, the same rules apply.
The withholding is calculated on the gross price, not your equity. Even if you still carry a mortgage on the property, the buyer withholds 15% of the total sale price -- and you receive your equity minus that withholding.
The good news is that FIRPTA, handled correctly, doesn't have to mean leaving money on the table. It means planning ahead, working with the right professionals, and making sure the withholding reflects what you actually owe rather than a default percentage calculated without any knowledge of your specific gain.
For a broader picture of what Miami sellers pay at closing, see How Much Will It Cost Me to Sell My Miami Home? and Miami-Dade Closing Costs: Who Pays What. And if you're thinking through the capital gains side separately from FIRPTA withholding, Capital Gains Tax on a Miami Home Sale walks through the federal tax picture for U.S.-based sellers.
I work with a lot of sellers across southern Miami-Dade who are international homeowners. If you're thinking about selling and you're not sure whether FIRPTA applies to your situation, the best thing you can do is start that conversation early. I can connect you with the right closing attorney and help you build a timeline that accounts for the withholding certificate process from the start.
Reach out anytime at lynleyresidential.com.
Frequently Asked Questions
What is the FIRPTA withholding rate for Miami home sellers?
The standard FIRPTA withholding rate is 15% of the gross sales price -- the full purchase price, not the seller's profit. A reduced rate of 10% applies if the buyer is purchasing the home as a primary residence and the sale price is between $300,000 and $1,000,000. For most Miami luxury transactions, the 15% rate applies.
Is a green card holder subject to FIRPTA when selling a Miami home?
No. If you hold a valid U.S. green card (lawful permanent resident status), you are not a "foreign person" under FIRPTA. Your closing attorney will prepare a non-foreign certification -- also called a FIRPTA affidavit -- which you sign under penalty of perjury, and no withholding is required.
How do I apply for a FIRPTA withholding certificate in Florida?
You file IRS Form 8288-B before closing to request a withholding certificate. This allows the IRS to reduce or eliminate the required withholding based on your actual expected tax liability. The IRS typically takes 90 to 120 days to process the application, so you need to start this well before you list your home.
What happens to the money withheld under FIRPTA?
The withheld funds are remitted to the IRS by the closing agent within 20 days of closing. After closing, you file a U.S. federal income tax return reporting the capital gain from the sale. If the amount withheld exceeds your actual tax liability, the IRS refunds the difference. If you owe more than was withheld, you pay the balance.
Does FIRPTA apply if I'm selling a condo in Miami?
Yes. FIRPTA applies to all U.S. real property interests sold by foreign persons, including condos, single-family homes, townhomes, and investment properties. The property type doesn't change the withholding obligation -- only the seller's immigration status and the sale price determine how FIRPTA applies.
About Lynley Ciorobea
Lynley Ciorobea is a Miami-born real estate professional known for helping homeowners successfully prepare, position, and sell their homes across Coral Gables, South Miami, Pinecrest, Palmetto Bay, and the surrounding southern Miami neighborhoods. Since 2007, she has built her business around thoughtful strategy, strong negotiation, and a marketing-first approach designed to help listings stand out in an ever-evolving market.
A true local, Lynley grew up in Pinecrest and graduated from Palmer Trinity School before attending Duke University, where she earned a BA in Psychology. Her deep roots in Miami give her a nuanced understanding of the architecture, lifestyle, and character that make each neighborhood distinct. From classic Old Spanish homes in Coral Gables to newer construction in South Miami and Pinecrest, she brings a local perspective that goes far beyond surface-level market knowledge.
Over the years, Lynley has naturally become a trusted resource for homeowners preparing to sell. Many of her clients come to her long before their home ever hits the market, looking for guidance on timing, pricing, improvements, and how to position their property thoughtfully. She approaches each listing as a strategic launch rather than a simple transaction, combining market insight, negotiation experience, and elevated marketing to help sellers move forward with clarity and confidence.
As the founder of the Lynley Residential Group, Lynley remains personally involved in every listing she represents. She leads each transaction from initial strategy through closing, ensuring that every detail — from pricing and preparation to storytelling and exposure — reflects the uniqueness of the home itself. Her work often centers on architecturally interesting properties and homes where thoughtful positioning can make a meaningful difference in outcome.
Throughout her career, Lynley has consistently ranked among the top real estate agents in Miami. She has been recognized as part of EWM's Chairman's Club, placing in the top 5% of the company; in 2022 she was honored as the #2 individual agent at the company overall with $37 million in annual sales; and she's a leader in Miami with Real Broker. With more than $100 million in career transactions and more than 60 5-star Google reviews, her experience spans a wide range of property types while maintaining a strong focus on seller representation in southern Miami.
Beyond her work with clients, Lynley is known locally for her market insight and community-focused content. Through her weekly newsletter, neighborhood videos, blog posts, and social media, she shares thoughtful perspectives on the Miami real estate market and the lifestyle that surrounds it. Her approach is informative without being overwhelming, offering homeowners a clear understanding of how market conditions affect real decisions.
If you're preparing to sell a home in Coral Gables, Coconut Grove, South Miami, Pinecrest, Palmetto Bay, or nearby areas, Lynley offers a local perspective shaped by experience, relationships, and a genuine understanding of what makes Miami homes so special. Learn more at lynleyresidential.com.