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Calculators › FIRPTA Withholding Calculator

FIRPTA Withholding Calculator

When the seller is a foreign person, federal law requires the buyer to withhold from the proceeds. This is federal, so it applies in Georgia exactly as anywhere.

The reduced rates apply only where the buyer acquires the property for use as a residence and the price is within the bands below. That is a factual test about the buyer's intended use, not an election.

Estimate for planning only. Actual figures depend on your contract, county and lender. Contact The Closing Firm at (770) 506-7765 for an exact quote.

Withholding is not the tax. FIRPTA withholding is a deposit against the seller's eventual US tax liability, not the liability itself. Where the actual tax owed is less, the seller claims the difference back by filing a US return — or applies for a withholding certificate before closing to reduce the amount withheld in the first place. That application takes time, so it has to start well before the closing date.

The three bands

Buyer will occupy, price $300,000 or lessExempt
Buyer will occupy, $300,001 to $1,000,00010%
Everything else15%

Who is a "foreign person"?

A non-resident alien individual, or a foreign corporation, partnership, trust or estate. A US citizen is not, and neither is a lawful permanent resident — a green card holder — or someone who meets the substantial presence test. The determination is about tax residency, not about where someone happens to live.

Why it matters to the buyer

The withholding obligation falls on the buyer. If the seller is a foreign person and nothing is withheld, the IRS can look to the buyer for the money. This is one of the reasons the seller information sheet asks about citizenship, and why it is better answered at the start of a file than the week of closing.

FIRPTA has real complexity and the numbers get large. If a foreign seller is involved, tell us early — call (770) 506-7765 — and consider engaging a tax professional alongside us.
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