What FIRPTA and California hold back at closing, who handles it, how to reduce it, and how to get it back.
When a nonresident alien or another foreign person sells a San Diego home or other US real estate, the buyer generally must withhold 15% of the amount realized (roughly the sale price, not the profit) under FIRPTA. The rate drops to 10% when the buyer will use the home as a residence and the price is $1 million or less, and to 0% when the price is $300,000 or less and the buyer is an individual who (or whose family member) has definite plans to live there, though notification requirements still apply. California separately withholds 3 1/3% of the selling price unless an exemption applies. Both are prepayments of tax, and you get credit for them when you file US and California returns.
General information only, not tax or legal advice. See the note near the end of this page.
This page covers the tax withholding that applies when the seller is a foreign person. For the rest of the sale, from pricing to closing, see selling a house in San Diego: costs, disclosures and timeline.
For FIRPTA, a foreign person is a nonresident alien individual or a foreign entity, such as a foreign corporation (unless it has elected under section 897(i) to be treated as domestic), partnership, trust or estate. A resident alien is not a foreign person.
A green card holder (lawful permanent resident) is a US resident for federal tax purposes, so generally is not a foreign person for FIRPTA. That status lasts until it is given up in writing to USCIS or ended by an administrative or court decision.
You can also be a US resident for tax purposes without a green card, by meeting the substantial presence test. You meet it if you were physically present in the US on at least 31 days during the current year and 183 days during the 3-year period that includes the current year and the 2 years before it, counting all days in the current year, 1/3 of the days in the year before and 1/6 of the days in the year before that. Some days don't count, including days as an exempt individual, such as certain students, teachers and trainees on F, J, M or Q visas (IRS page last reviewed March 14, 2026).
There are edge cases. A green card holder who claims to be a resident of another country under a tax treaty tie-breaker rule is treated as a nonresident for figuring tax. The first and last years of US residency can also be dual-status years. That can matter if you are moving to San Diego from Brazil in the same year you sell. If any of this might apply to you, confirm your status with a US tax advisor before you sign anything at escrow saying you are not a foreign person.
A seller who is not a foreign person can certify that under penalties of perjury. If you sell with a co-owner and only one of you is a foreign person, ask a CPA how the withholding applies to each of you.
Buying in San Diego too? See buying a San Diego home from abroad or without a green card.
The default is 15% of the amount realized. The amount realized is the cash paid, plus the fair market value of any other property transferred, plus any debt the buyer assumes or the property is subject to. It is not your gain.
Two reduced rates depend on the buyer's plans, not yours:
| Sale situation | FIRPTA withholding |
|---|---|
| Amount realized is $300,000 or less, and the buyer is an individual who acquires the home to use as a residence | 0% (notification requirements still apply) |
| Amount realized is more than $300,000 and up to $1 million, and the buyer acquires the home to use as a residence | 10% |
| Amount realized is more than $1 million, or the buyer will not use the home as a residence | 15% (unless a withholding certificate or another exception applies) |
The residence test. The buyer or a member of the buyer's family must have definite plans to live in the home at least 50% of the days it is used in each of the first two 12-month periods after the sale. Days the home sits vacant do not count. If the buyer relies on this exception and does not actually meet the test, the buyer can be liable for the failure to withhold. That liability applies only if the seller was foreign and did not pay the full US tax, and it is excused if the failure to live there came from a change in circumstances that could not reasonably have been foreseen at the sale.
If you see 10% as the general rate in older articles, that applied to sales before February 17, 2016.
FIRPTA withholding doesn't apply when the seller isn't a foreign person, and it is excused when the sale fits an IRS exception. These are the ones that come up in home sales (IRS exceptions page last reviewed July 15, 2026):
The IRS list includes a few others that rarely fit a home sale, such as an amount realized of zero, a written notice that a nonrecognition rule in the tax code or a tax treaty applies, or a sale to a government agency. Getting little or no cash at closing after your loan is paid off doesn't make the amount realized zero. The 10% rate for a buyer who will live in a home priced up to $1 million lowers the withholding but doesn't remove it. California's exemptions are separate and are covered under Form 593 below.
The buyer is usually the withholding agent. If the seller is foreign and the buyer fails to withhold, the IRS can hold the buyer liable for the tax. In practice, the escrow or closing agent handles the withholding for the buyer.
The buyer must file Form 8288 and send the withheld tax to the IRS by the 20th day after the date of transfer. Both the seller's and the buyer's US taxpayer identification numbers (TINs) go on the FIRPTA forms. Ask your escrow officer how the payment will be sent.
FIRPTA withholding is a credit toward your US income tax, not the final tax. The buyer prepares a Form 8288-A for each seller. The IRS stamps Copy B and mails it to the seller, and the seller attaches it to a US income tax return such as Form 1040-NR to claim the credit.
If your TIN is missing, the buyer still has to withhold, file and pay, but the IRS will not send you a stamped Copy B. That makes claiming the credit harder.
A calendar-year nonresident alien with no US wages subject to withholding and no US office or place of business generally must file Form 1040-NR by June 15. If you have US wages subject to withholding or a US office, the deadline is generally April 15. Form 4868 requests an automatic extension of time to file (a June 15 due date moves to December 15), but it does not extend the time to pay. Interest and penalties run from the original due date.
The money doesn't come back at closing. You claim it on your US return for the year of the sale, and that return can't be filed until the year is over, so most sellers wait until the following year. The 2025 Form 1040-NR instructions say refunds of tax withheld on Form 8288-A may need extra processing time, and to allow up to 6 months for them to be issued.
There is one faster route. If you receive an IRS withholding certificate and more was withheld than the certificate required, you can apply for an early refund of the excess, without interest, before your return is due (not counting extensions). The application must include a copy of the IRS-stamped Form 8288-A, and the IRS acts on it within 90 days after it is received (Treasury Regulation section 1.1445-3).
An ITIN is a 9-digit number the IRS issues to people who need a US taxpayer number but cannot get a Social Security number. It is for federal tax purposes only.
If the sale is your only reason to need one, you apply on Form W-7 under Exception 4, and only once there is a legally binding sale contract. The IRS says an ITIN application filed before a binding contract, with no other valid reason, will be denied.
California also cares about your ID number. FTB Publication 1016 (Rev. 02/2026) says a seller needs a valid TIN (an SSN or ITIN) to claim any Form 593 exemption. If you don't have an ITIN by the time escrow closes, the exemption parts of Form 593 (Parts III and IV) are void and California withholding is required. If you also don't provide a valid TIN later, the withholding credit is denied. So if you need an ITIN, apply as soon as you are in contract.
The buyer or the seller can file Form 8288-B to ask the IRS for a withholding certificate that reduces or eliminates FIRPTA withholding. A common reason is that 15% of the price would be more than the seller's actual maximum tax on the sale.
Because the IRS timeline is generally 90 days and a pending application does not stop withholding at closing, ask a CPA or US tax attorney about Form 8288-B and its timing before you list.
A nonresident alien who qualifies can exclude up to $250,000 of gain on the sale of a US main home under IRC section 121. The eligibility test in IRS Publication 523 must be met. Nonresident aliens generally cannot file joint returns unless married to a US person, so each owner claims their own share on a separate return.
The exclusion does not by itself stop FIRPTA withholding at closing. If it applies, you can request a withholding certificate because 15% withholding could exceed the tax you actually owe, or claim the refund on Form 1040-NR.
California generally requires withholding when California real estate is sold, unless an exemption applies. The withholding is a prepayment of the seller's income tax on the sale, and it is separate from FIRPTA. A foreign seller of California property can face both.
Exemptions must be certified on Form 593 before closing. After closing, California withholding can be recovered only as a credit on your California return; nonresident individuals use Form 540NR. Qualifying for an exemption does not remove the duty to file a California return and pay any tax due on the sale. Knowingly signing a false Form 593 certificate carries a penalty of $1,000 or 20% of the required withholding, whichever is greater (2026 Form 593 instructions).
| Federal (FIRPTA) | California | |
|---|---|---|
| Who it applies to | Foreign persons (nonresident aliens and foreign entities) | Sellers of California real estate, unless an exemption applies |
| Standard amount | 15% of the amount realized | 3 1/3% of the selling price |
| Lower amounts | 10% when the buyer will use the home as a residence and the price is $1 million or less; 0% when the buyer is an individual who will use it as a residence and the price is $300,000 or less; or an IRS withholding certificate (Form 8288-B) | Alternative Withholding Calculation (12.3% of estimated gain for individuals, 2026); or a full exemption |
| Key form | Form 8288 and 8288-A (buyer); Form 8288-B (optional) | Form 593, signed before closing |
| How you get credit | Stamped Copy B of Form 8288-A attached to Form 1040-NR | Credit on Form 540NR |
This is an illustration only, not an estimate of your tax. Say a nonresident individual sells a San Diego condo for $800,000, no exemption applies, and no withholding certificate is in place. California's Form 593 figures the 3 1/3% as 0.0333.
| Item | Buyer is an investor | Buyer will live there (residence test met) |
|---|---|---|
| FIRPTA withholding | 15% × $800,000 = $120,000 | 10% × $800,000 = $80,000 |
| California withholding (standard method) | 3 1/3% × $800,000 = $26,640 | 3 1/3% × $800,000 = $26,640 |
| Total held back at closing | $146,640 | $106,640 |
Now say the seller still owes $500,000 on the mortgage. Withholding is still figured on the full $800,000, so the $146,640 in the investor column comes out of roughly $300,000 left after the loan payoff, before closing costs. None of this is the final tax. The real tax is settled on Form 1040-NR and Form 540NR, where the withholding is credited.
Rent a nonresident alien earns from a US home that is not effectively connected with a US trade or business is taxed at a flat 30% of the gross rent, or a lower treaty rate, with no deductions. Brazil does not appear on the IRS list of US income tax treaties, so no treaty rate is available to Brazilian residents. A US payer of the rent, such as a tenant or a property manager acting as withholding agent, must withhold.
The alternative is the net-basis election under IRC 871(d):
California also taxes nonresidents on California-source income, and rent from California property counts. Nonresidents with a California filing requirement file Form 540NR. California has its own withholding on rent paid to nonresidents: a property manager who collects the rent for you generally must withhold once payments pass $1,500 in a calendar year, while a residential tenant who pays you directly does not have to (FTB Publication 1017, Rev. 02/2026). Renting can also affect your California withholding exemptions when you sell: if the home was last used as a rental, the separate exemption for property last used as your principal residence does not apply. Ask a CPA whether the two-of-five-year principal residence exemption still fits your situation. For the local rules on renting out a home here, such as short-term rental licenses and tenant protections, see San Diego rental rules for owners.
If you are a Brazilian tax resident, rent from a property abroad is also taxed in Brazil through the monthly carnê-leão, in the month it is received, whether or not the money is brought to Brazil. It also goes on the annual return (IRPF), where the carnê-leão already paid counts as an advance payment. US federal income tax paid on that rent can be credited, up to a limit. Confirm the details with a Brazilian accountant (contador).
These points apply to Brazilian tax residents. Someone who has filed a definitive exit from Brazil (saída definitiva) is taxed differently.
Several details are not settled by the official sources we checked: how the cost basis is converted to reais, how exchange-rate changes are treated, whether Brazil's own home-sale exemptions apply to a foreign home, and whether, and how, US tax on the sale can be credited against the Brazilian capital gains tax. Work through those with a Brazilian accountant (contador) before you close. For currency exchange and international transfers between Brazil and the US, see how to send money from Brazil to the US.
You generally don't have to travel to San Diego to sell. With limited exceptions, the grant deed you sign must be acknowledged before it can be recorded, and that can be done outside the US, for example before a US consular officer (California Government Code 27287 and Civil Code 1183). The options and limits are the same ones buyers use: see signing documents from abroad. Ask your escrow officer early which method the title company will accept.
Karina Somenzari, REALTOR®, represents sellers across San Diego County's cities and communities, in English or Portuguese, and works alongside your escrow officer and tax advisor. Contracts and escrow documents are in English. Want a sense of what your home might sell for first? Request a free valuation of your San Diego home or run a free property report.
FIRPTA is the Foreign Investment in Real Property Tax Act of 1980, the federal law that lets the US tax foreign persons when they sell US real estate. To collect that tax, it generally requires the buyer to withhold 15% of the amount realized at closing and send it to the IRS, with lower rates when the buyer will live in the home (10% up to $1 million, 0% up to $300,000 for an individual buyer). The withholding is a prepayment, not the final tax. You claim credit for it on a US return such as Form 1040-NR.
Generally no. A green card holder is a US resident for federal tax purposes, and FIRPTA applies to foreign persons, which does not include resident aliens. There are exceptions, such as a green card holder who claims to be a resident of another country under a tax treaty tie-breaker rule, so confirm your status with a US tax advisor before you sign a non-foreign certification.
It is figured on the amount realized, which is roughly the gross sale price, not your profit. The amount realized includes the cash paid, the fair market value of other property transferred, and any debt the buyer assumes or the property is subject to. On a home with a large mortgage, the withholding can be more than the cash you would otherwise take home at closing.
Yes, in some cases. The buyer or the seller can file Form 8288-B to ask the IRS for a withholding certificate, often because 15% of the price would be more than the seller's actual maximum tax. The IRS generally acts within 90 days after it receives a complete application. If the application is still pending at closing, the tax is still withheld, but it is not sent to the IRS until 20 days after the IRS mails its decision.
FIRPTA withholding is a credit toward your US income tax, not the final tax. The buyer files Form 8288-A for each seller, the IRS stamps Copy B and mails it to the seller, and the seller attaches it to a US return such as Form 1040-NR for the year of the sale. Any refund is claimed on that return, so it generally comes the year after closing, and the 2025 Form 1040-NR instructions say to allow up to 6 months for refunds of tax withheld on Form 8288-A. If an IRS withholding certificate allowed less withholding than was taken at closing, you can apply for an early refund of the excess before your return is due, and the IRS acts on that request within 90 days.
Yes, the sale can close, but going without a US taxpayer number costs you. The buyer still has to withhold, file and pay, but the IRS will not send you a stamped Copy B of Form 8288-A, which makes claiming the credit harder. In California, a seller without a valid SSN or ITIN can't claim any Form 593 exemption, so California withholding is required. If selling the home is your only reason to need an ITIN, you can apply on Form W-7 under Exception 4 once there is a legally binding sale contract; the IRS says an application filed before that, with no other valid reason, will be denied. When the W-7 is filed together with a withholding certificate request, the IRS says it processes the ITIN request within 10 days of receipt.
Yes, unless an exemption applies. The standard California withholding is 3 1/3% of the selling price. A seller can instead elect the Alternative Withholding Calculation, which for 2026 sales by individuals is 12.3% of the estimated gain. Exemptions must be certified on Form 593 before closing. California withholding is separate from FIRPTA, so both can apply to the same sale.
If you are a Brazilian tax resident, the gain on selling a foreign asset that is not a financial investment, such as a US home, falls under Brazil's regular capital gains rules: 15% on the part of the gain up to R$5 million, with higher brackets above that, due by the last business day of the month after the sale. Brazil accepts a credit for US federal income tax in general, but not for taxes paid to US states such as California. Whether US tax on the sale can be credited against the Brazilian capital gains tax, and whether Brazil's home-sale exemptions apply to a foreign home, are not confirmed. Ask a Brazilian accountant (contador).
By default, US rent a nonresident alien earns that is not effectively connected with a US trade or business is taxed at a flat 30% of the gross rent, with no deductions, and the tenant or a property manager acting as withholding agent must withhold it. Brazil has no income tax treaty with the US, so no lower treaty rate applies to Brazilian residents. You can instead elect to treat the rent as effectively connected income, give the payer Form W-8ECI so the 30% is not withheld, deduct rental expenses, and pay tax on the net income at graduated rates. Once the election is in effect, you must file Form 1040-NR every year until it is revoked. Revoking the election later generally needs IRS consent.
Karina offers a free, no-pressure conversation in English or Portuguese about pricing, timing and how escrow handles withholding, so you can plan with your tax advisor before you list.