Foreign Investment in Real Property Tax Act
BUYING A HOME IN ARIZONA AS A FOREIGN BUYER AND HOW FIRPTA APPLIES!
- All funds deposited for the escrow must be by wire transfer.
- Out of US Wire Transfers / Swift Fee: International transfers are executed through SWIFT, Society for Worldwide Interbank
- Financial Telecommunication, and there is an additional charge for this type of transfer.
- The charge is deducted from the wired funds and varies from bank to bank. The charge is typically a flat rate and does not exceed $50.00, so we recommend that our clients wire an additional $50.00 when wiring from outside of the U.S. - When a foreign owner gets ready to sell, they could be subject to a 10% (of the Sales Price) withholding unless the transaction is exempt from FIRPTA.
- Most common exemption: Sales Price is not more than $300K. The Buyer or a member of their family must have plans to reside at the property for at least 50% of the number of days the property is used by any person during each of the first two twelve month periods after sale.
- Other Exemptions that may apply are:
- Seller to provide a certificate showing they are not a foreign seller
- Seller receives a withholding certificate from IRS excusing withholding
If applicable see forms:
- W-7 (application for IRS Individual Taxpayer Identification Number)
- 8288-B (Application for Withholding Certificate for Dispositions by Foreign Persons of U.S. Real Property Interests)
Go to www.irs.gov and click on Forms and Publications to get copies of these and other forms.
