Take the FEAR out of FIRPTA
FIRPTA is an acronym for the FOREIGN INVESTMENT IN REAL PROPERTY ACT of 1980. We know FIRPTA sounds crazy, and it does have a bunch of rules. But the idea behind it is simple – when buying a house that is owned by a foreign party, the title company must withhold a portion of the sale to make sure they pay taxes and it’s up to the BUYER to report the sale to the IRS!
Sounds complicated, we know… so here are 5 Facts to take the FEAR out of FIRPTA
FACT 1: WHO IS FIRPTA FOR?
The first thing to know is that FIRPTA only applies to buyers that are buying from a seller who is not a US Citizen/Resident Alien. There are several identifying factors for a foreign person or company, which the title company will discuss with the seller. If the seller is a foreign person or company, then there may be a portion of the proceeds withheld from closing. The seller will apply for a TIN number before the sale by filling out the W-7 application, if it’s the first time selling a property in the US.
FACT 2: CAN THE SELLER BE EXEMPT?
Yes! If it is a home with a sales price under $300,000 and the buyer intends to occupy the new home as their primary residence for most of the year, over the next two year period of time, the property is entirely exempt from the withholding. The buyer will be required to sign an agreement to confirm their intent to reside. This fact means for some people, FIRPTA never comes into play – but there’s still some paperwork you’ll need the parties to sign at closing.
FACT 3: HOW MUCH IS WITHHELD?
IF the sales price is over $300,000 to $1,000,000, the required withholding is 15% regardless if the buyers intends to occupy the property full time. There are some other rules that can make the withholding % increase or decrease, however, those are more rare.
FACT 4: What about a SHORT SALE?
Unfortunately for the seller, sometimes the sold home is worth less than the amount owed, but the FIRPTA requirements STILL come into play.
FACT 5: WE DO IT ALL FOR YOU!
The best part is when using ANY Florida Agency Network branded title company, we’ve got you covered when it comes to FIRPTA. We will discuss what is needed, based on the particulars for the parties and transaction and also have CPA’s that we can refer to, if needed.
To download more information about FIRPTA download our PDF here or call any of our locations.
Aaron Davis earned a new nickname this week, the "Tampa Chainsaw Man", and for good reason. He saw the devastation throughout Texas, and after traveling to the region, donating and raising funds for local Texas charities, he asked what else he could do. That's when they put a chainsaw in his hand. With his Bucs hat proudly on his head, he started removing trees and other debris to further relief efforts and lend a helping hand.
TEXAS (People.Com) - Aaron Davis flew from Tampa, Florida, to Austin, Texas, on Friday — because he wanted to help people affected by the snow and ice storm.
"I just felt incredibly guilty sitting down in Tampa, Florida, in the sunshine watching the rest of the country suffer," Davis, 45, tells PEOPLE. "I've weathered many storms in my life in Florida, the hurricane capital of the world."
During the last Florida hurricane, he bought and delivered generators to people in need. "I just try to step up and do what I can," he says.
A business owner (his company does remote real estate closings), Davis told his staff he was taking a month off to volunteer in Texas. "I felt the need to be feet on the ground in Texas to help out however I could," he says..... Read full article.