How to sell property in the USA as a foreign owner: process, taxes and getting the money out

In brief

As of November 2026, a foreign seller of US real estate meets FIRPTA: by default the buyer withholds 15 percent of the gross price and sends it to the IRS, even if your real tax is far lower. A certificate on Form 8288-B can reduce it, but the IRS is reported to take about 90 days, so apply before you list. The withholding is a prepayment: you claim the balance back with a Form 1040-NR tax return. The title company screens every party against the sanctions list, and agent compensation has been negotiated openly since 17 August 2024. This is general information, not legal or tax advice.

How a sale works in the USA

A US sale runs through a title company or an escrow agent, who holds the money and documents until everything is ready, collects the payoff of any mortgage, pays the taxes and fees, and then releases the proceeds. Your agent lists the property and negotiates; the title company or attorney does the closing. You can close without being present if you sign a power of attorney (ours is general practice, not a rule we verified in this round), or sign the documents before a notary or consulate abroad.

The title company will ask for your passport, a US tax identification number if you have one, and details about the property. It also screens each party against the sanctions lists, which matters for sellers from jurisdictions under sanctions (see below). For the logic shared by all countries see our step-by-step guide to selling property abroad and the note on getting the money out.

FIRPTA: why 15 percent is held back

FIRPTA is the US rule that makes the buyer withhold part of the price when the seller is a foreign person. The practitioner sources we found agree on these points:

• The default is 15 percent of the gross price, not of your gain.
• If the buyer will live in the property and the price is between USD 300,001 and USD 1,000,000, the rate is 10 percent, provided the buyer makes a residence commitment. At USD 300,000 or less for a buyer's residence there is no withholding. Sources differ on whether the 10 percent band is still current, so confirm it.
• The withholding is a prepayment, not the final tax. If the real tax is lower, you get the difference back.
• Form 8288-B asks the IRS for a certificate that lowers or removes the withholding, usually based on your actual maximum tax. Processing is reported to take about 90 days, often longer.
• If the certificate has not arrived by closing, the buyer or escrow holds the full 15 percent until the IRS answers, or withholds it and you recover the excess later.

The ITIN and the tax return

You do not need an ITIN to sell or transfer US real estate, but you need one to file the tax return that recovers any excess withholding. One source says the application can start once you have a signed sale contract. If you have none at closing, the withholding agent may be able to file the paperwork without it, according to one source. Waiting for closing week to start is described as a common mistake.

After closing the closing professional reports the sale to the IRS on Form 1099-S. The foreign seller files a US return (Form 1040-NR) by 15 April of the following year, and the withholding counts as a credit against any capital gains tax. The tax itself depends on your gain and holding period; for tax in other countries and the home-country side see taxes when selling property abroad by country.

State rules

States add their own rules, and they differ a lot:

• California requires withholding on real estate sales by residents and non-residents (Form 593-E calculates the gain).
• New York withholds from non-resident sellers on the gain, and a seller can use Form IT-2663 to certify that no tax is due.
• New Jersey withholds 2 to 10.75 percent of the gain.
• Florida has no individual income tax, so there is no state withholding on the gain; Florida's own transfer taxes are not covered here.

We did not find a typical closing-cost percentage for foreign sellers, so ask the title company for a seller's estimate before you accept an offer.

Agent commissions after the NAR settlement

Since 17 August 2024, listings on Realtor-affiliated MLSs cannot include an offer of compensation to the buyer's agent. Buyers sign a written agreement with their agent, and compensation is negotiated. You may still choose to pay the buyer's agent, but the offer cannot be posted on the MLS. One survey source gives a total average commission of 5.32 percent in 2024 and 5.46 percent in 2026, and sellers offering 2 to 3 percent to buyers' agents; these are from low-authority sites, so treat them as rough. State rules vary, so check with your state's real estate commission.

A worked example

Illustrative arithmetic on stated assumptions, not market data. You sell a house for USD 500,000 that you bought for USD 300,000. Assume a taxable gain of USD 200,000 and a federal tax of 15 percent on it.

• Tax on the gain: USD 30,000.
• Default FIRPTA withholding: 15 percent of USD 500,000, which is USD 75,000.
• Excess held by the IRS until you file: USD 45,000.

With a Form 8288-B certificate issued before closing, the withholding could be set closer to the real tax. Without it, you wait for the return to recover the USD 45,000.

Getting the money out

After closing the title company wires your net proceeds to the account you name. Check three things before closing. First, the account details must match your name and your tax file. Second, the receiving bank outside the US must accept the incoming wire; for passports from countries under sanctions, banks ask about the source of the funds and about the sale paperwork. Third, the US side screens: title companies check every party against the OFAC sanctions list, and OFAC announced a penalty of about USD 4.67 million in November 2025 against a seller of blocked real estate. We found nothing on the specific wire leg for a seller with a Russian passport, and no US rule targeting Russian sellers as such; the practical question is whether you or your counterparty appear on a sanctions list. For the paper trail see bank checks for Russian citizens living in the EU and, for money that started as crypto, proving crypto income to banks.

Common mistakes

• Not applying for the withholding certificate before listing, so USD 75,000 or more sits with the IRS for months.
• Skipping the ITIN until closing week.
• Forgetting the US tax return, which is the only way to recover the excess.
• Ignoring state withholding in California, New York or New Jersey.
• Expecting the title company to wire proceeds before the sanctions screening and the tax paperwork are complete.
• Not checking who in the chain, such as an entity owner, might match a sanctions list.
• Listing without a seller's net-sheet estimate.

Checklist with timing

• Before listing (week 0 to 2): choose a listing agent and a title company, start the ITIN, decide on a power of attorney.
• Before listing (week 0 to 4): prepare the Form 8288-B application with an adviser who knows FIRPTA.
• After signing the contract: closing typically 30 to 60 days later; this is our estimate from general practice, not a sourced figure.
• At closing: the title company withholds, pays off the mortgage, wires the net proceeds.
• After closing: Form 1099-S is filed; you file Form 1040-NR by 15 April of the next year.

What is confirmed and what is not

The 15 percent default, the 10 percent residence band, Form 8288-B, the 90-day processing, the 1099-S and the 1040-NR refund are consistently described by practitioner sources. We did not open the IRS pages. Not confirmed: whether the 10 percent band is current, the 21 percent rate for foreign corporations (not used), typical closing costs for foreign sellers, the closing timeline (our estimate), power-of-attorney practice, the wire leg for sellers with passports from countries under sanctions, and any state beyond the four named.

FAQ

Why is 15 percent of the price withheld when my gain is smaller? FIRPTA sets the default on the gross price so that the IRS holds some tax from a foreign seller. It is a prepayment. You recover the excess on your tax return, or reduce it in advance with a Form 8288-B certificate.

How long does Form 8288-B take? Sources say about 90 days, and often longer. Apply before you list. If the certificate is late, the buyer or escrow may hold the full 15 percent until the IRS replies.

Do I need an ITIN to sell? No. You do not need one to sell or transfer the property, but you need one to file the return that recovers any excess withholding. Start the application early.

Who pays the agent after the NAR settlement? Buyers negotiate with their agents, and the seller's offer of compensation can no longer appear on the Realtor MLS. You can still agree to pay the buyer's agent. Check your state's rules.

Can a seller with a Russian passport get proceeds abroad? We found no US rule that targets Russian sellers as such. The title company screens parties against sanctions lists and banks ask about the source of funds, so prepare documents and confirm that your receiving bank accepts the wire.