Davie FL FIRPTA Withholding: Foreign Seller Rules 2026
Do you have to pay FIRPTA withholding on a Davie home sale?
FIRPTA withholding applies when the seller of a Davie home is a foreign person. The buyer must hold back 15 percent of the gross sale price, not the profit, and remit it to the IRS within 20 days of closing. Because most Davie homes sell above $300,000, the full exemption rarely applies. Buyers who intend to live in a home priced between $300,001 and $1 million withhold 10 percent.
Written by Anthony Spitaleri, Broker Associate with Coldwell Banker and a Davie native. More about Anthony
FIRPTA is the Foreign Investment in Real Property Tax Act. It is a federal law that forces the buyer to withhold tax when the seller is a foreign person. It surprises people on both sides of the Davie closing table, and it costs real money if nobody plans for it. This is the practical version of the rule for buyers and sellers in Davie ZIP codes 33314, 33324, 33325, 33326, 33328, 33330, and 33331.
Davie sits in one of the most international housing markets in the country. Broward County draws heavy foreign ownership, with buyers from Colombia, Mexico, Argentina, Brazil, and Canada active across the market. That means FIRPTA is not a rare edge case here. It shows up in ordinary single family transactions, and the numbers are large enough to stall a closing.
Who FIRPTA applies to
FIRPTA turns on one question: is the seller a foreign person for tax purposes. A foreign person is a nonresident alien, a foreign corporation, a foreign partnership, or a foreign trust. According to the IRS FIRPTA withholding rules, the buyer is responsible for determining this, not the seller.
A green card holder is a United States person for tax purposes. So is someone who meets the substantial presence test based on days spent in the country. Neither triggers FIRPTA. The trap is assuming that a seller who lives abroad but has a green card is foreign, or that a seller with a local address is automatically domestic. Status is a tax question, not an address question.
United States sellers are not subject to withholding at all. At closing, a domestic seller signs a sworn statement that they are not a foreign person. That single document, signed under penalty of perjury, clears the buyer of any FIRPTA obligation. When you are buying a home in Davie, this affidavit is a standard part of the closing package, and it is the first thing to confirm.
How much Davie buyers and sellers withhold
The withholding rate depends on the price and on what the buyer plans to do with the home. There are three tiers, and Davie’s price points push almost every deal past the first one.
Here is how the tiers work when the seller is a foreign person:
1. Sale price of $300,000 or less, and the buyer intends to use the home as a residence: 0 percent withholding.
2. Sale price from $300,001 to $1,000,000, and the buyer intends to use the home as a residence: 10 percent withholding.
3. Sale price above $1,000,000: 15 percent withholding, no matter how the buyer plans to use the property.
The residence test has teeth. The buyer must intend to live in the home for at least half of the days the property is in use during each of the first two twelve month periods after the sale. A pure investment purchase does not qualify for the reduced tiers.
Now apply that to Davie. The median Davie single family home sells well above $300,000, so the full exemption almost never applies here. The common Davie case is the 10 percent tier, a foreign seller and a buyer who plans to live in a home priced between $300,001 and $1 million. On a luxury Davie estate above $1 million, the rate jumps to the full 15 percent of the gross price. That is a six figure hold on a $1.5 million sale, calculated on the whole price, not on the seller’s gain. If you want to see how this sits next to the cost of living in Davie and the rest of your closing math, plan for it before you sign.
Why the buyer carries the risk
The buyer is the statutory withholding agent, which means the buyer is personally liable if the tax is not withheld. If FIRPTA applied and nobody held the money back, the IRS can collect the unpaid amount, plus interest and penalties, from the buyer. The seller is already gone with the proceeds.
In Florida practice, the closing agent or title company administers the withholding. The buyer remits the tax to the IRS using Form 8288 and Form 8288-A within 20 days of closing. That does not remove the buyer’s legal responsibility. It just means a competent closing agent handles the mechanics so the buyer does not miss the deadline.
This is why the seller’s tax status belongs in the contract and the title work early, not at the closing table. A buyer who finds out on closing day that the seller is foreign is a buyer who is suddenly responsible for withholding and filing federal forms on a 20 day clock. The full picture of what buyers and sellers pay at a Davie closing should include this line item whenever foreign status is even possible.
How to reduce FIRPTA withholding before closing
A foreign seller does not have to accept 15 percent of the gross price sitting with the IRS for months. The tool is a withholding certificate, and it is filed before closing, not after.
The steps look like this:
1. Before closing, the seller or the buyer files Form 8288-B with the IRS to request a reduced withholding amount based on the seller’s actual maximum tax liability.
2. Filing 8288-B before closing suspends the normal 20 day remittance. Instead of sending 15 percent to the IRS, the withheld amount is held in escrow while the request is pending.
3. The IRS reviews the request and issues a determination, generally in about 90 days.
4. Once the IRS responds, the escrow releases the correct amount to the IRS and returns the rest to the seller.
The point of the certificate is that FIRPTA withholds against the gross sale price, but the seller’s real tax is usually a fraction of that. A foreign seller with little or no gain can often reduce the withholding close to zero. The IRS withholding certificate process is how you avoid handing the government a six figure interest free loan and waiting a year to get it back.
If the certificate is not filed in time, the fallback is to withhold the full amount at closing and recover the overage by filing a United States tax return for the year of the sale. That works, but the refund takes months, and the seller loses the use of that money in the meantime. Whether you are the buyer protecting yourself from liability or the seller protecting your proceeds, this belongs on the seller net sheet before anyone signs.
Frequently Asked Questions
The seller of the Davie house I am buying is Canadian. Do I have to hold back 15 percent?
You hold back based on the price and your use of the home. If you plan to live in it and the price is between $300,001 and $1,000,000, the rate is 10 percent. Above $1,000,000 it is 15 percent regardless of use. Your title company administers the hold, but you are the party legally responsible for it.
Is the IRS really keeping 15 percent of the whole sale price, not just my gain?
Yes. FIRPTA withholding is calculated on the gross amount realized, meaning the full sale price, not the profit. That is why the amount withheld is often far larger than the actual tax owed, and why filing Form 8288-B before closing to reduce it matters so much for a foreign seller.
Can I get the FIRPTA withholding reduced before closing instead of waiting for a refund?
Yes. The seller or buyer files Form 8288-B before closing to request a withholding certificate based on the seller’s real tax liability. That suspends the 20 day remittance and holds the money in escrow until the IRS issues its determination, generally around 90 days, rather than sending the full amount to the government.
As the buyer, am I personally on the hook if the title company does not withhold?
Yes. The buyer is the statutory withholding agent under FIRPTA. If withholding was required and it was not done, the IRS can pursue the buyer for the tax plus interest and penalties. Use a closing agent who confirms the seller’s status in writing and handles the filing.
How do I know if the seller counts as foreign?
The seller’s tax status is what matters, not their address. A nonresident alien or foreign entity is foreign. A green card holder or someone who meets the substantial presence test is a United States person and not subject to FIRPTA. A domestic seller signs a certification of non foreign status at closing, which removes the withholding entirely.
Talk to a Davie Real Estate Expert
Anthony Spitaleri, Broker Associate with Coldwell Banker and a Davie native, maps the specific FIRPTA scenario for every buyer and seller before the contract is signed, not after the closing surprises them. If you are buying from a foreign seller or selling a Davie home as a foreign person, the difference between a clean closing and a frozen six figure hold is planning it early. Schedule a free 15-minute strategy call and walk into your closing with every number known.
Anthony Spitaleri
Living in Davie Florida
954-235-5783
Davie, Florida
livingindavieflorida.com
About Anthony Spitaleri
Anthony Spitaleri is a Broker Associate with Coldwell Banker, one of the most established residential real estate brands, with approximately 3,000 offices globally and a founded in 1906. A Davie native who returned home in 2025 after 13 years in Miami Beach, Anthony specializes in luxury homes and estates above $1 million, acreage and equestrian properties with no HOA, and relocation buyers moving to Davie from out of state. He created livingindavieflorida.com, the most in-depth independent Davie real estate resource available, with in-depth coverage of Davie’s gated communities, acreage and equestrian properties, and luxury estates, plus original weekly market data, interactive tools, Town Council recaps, and a 24/7 AI concierge. Anthony has been licensed in real estate since 2013 (BK3281907), is a Certified Strategic Coach through Coaching Services International (CSI), an active member of the Davie Cooper City Chamber of Commerce, and a weekly volunteer at Bit by Bit Therapeutic Riding Center in Davie.
