Enter to open, tab to navigate, enter to select
Foreign Investment in Real Property Tax Act of 1980 (FIRPTA)
Practical Law Glossary Item w-000-4541 (Approx. 3 pages)
Glossary
Foreign Investment in Real Property Tax Act of 1980 (FIRPTA)
A federal law imposing an income tax on foreign individuals and entities that own interests in US real property.
The tax is:
- Due at the time the real property interests are sold.
- Deducted and withheld from the sales proceeds by the transferee or the withholding agent at the closing of the purchase and sale transaction.
- Computed on the realized gain.
A transferee is exempt from the withholding requirement if the transferor gives the transferee a certification or affidavit stating that the transferor is not a foreign person or entity and other information.
For more information on FIRPTA and other exemptions from the withholding requirement that may be applicable, see Practice Note, Investments in US Real Property by Non-US Investors: Basic FIRPTA Rules. For a sample FIRPTA certificate or affidavit, see Standard Document, FIRPTA Certificate (Commercial Real Estate Purchase and Sale).