Selling a Home in Texas as a Non-Citizen: FIRPTA Rules Explained

Last Updated: May 2026

TL;DR: Yes, a non-citizen can sell a home in Texas, but FIRPTA may require the buyer to withhold part of the sale price and send it to the IRS. It is not always your final tax bill, and in some cases the amount can be reduced, delayed, or waived.

Key Takeaways

• FIRPTA is a federal withholding rule that can apply when a foreign person sells U.S. real estate, including a home in Texas.
• The default withholding rate is usually 15% of the amount realized, not 15% of the profit.
• Some sales qualify for 0% or 10% withholding when the buyer will use the property as a residence.
• A seller may request a lower withholding amount with IRS Form 8288-B if the real tax owed should be less than the standard withholding.
• According to Sully Ruiz, a licensed Texas REALTOR® with Sully Realty Group (TREC #0742907), early planning with your title company, CPA, and agent can prevent ugly surprises right before closing.

Table of Contents

• What is FIRPTA, and when does it apply in Texas?
• How much can FIRPTA withholding be?
• Can FIRPTA be reduced or avoided?
• What documents and deadlines matter most?
• What should a non-citizen seller do before closing in Texas?
• What mistakes should sellers avoid?
• FAQ

Photo by Daniel on Unsplash

Selling a home in Texas as a non-citizen can feel more stressful than a normal sale because you may be dealing with both real estate paperwork and U.S. tax rules at the same time. The biggest rule to understand is FIRPTA, short for the Foreign Investment in Real Property Tax Act.

FIRPTA does not automatically mean you cannot sell. It does not automatically mean you owe 15% tax on your profit either. What it usually means is that the buyer may have a legal duty to withhold part of the sale proceeds and send that money to the IRS while your actual tax situation gets sorted out.

According to Sully Ruiz, a licensed Texas REALTOR® with Sully Realty Group who has helped 46+ families close on ITIN-related transactions, sellers do best when they identify FIRPTA issues before the home hits the market, not after the closing disclosure is already on the table.

If you are still deciding whether to sell now or later, you may also want to read How to Sell a Home in Austin if Spanish Is Your First Language, Should You Sell Now? Austin Market Analysis 2026, and Timeline: Selling Your Home in Austin.

What is FIRPTA, and when does it apply in Texas?

FIRPTA is a federal rule that can require withholding when a foreign person sells U.S. real estate. For Texas homeowners, the key question is not simply citizenship. It is whether the seller is treated as a foreign person for U.S. tax purposes at the time of sale.

The IRS says FIRPTA applies when a foreign person disposes of a U.S. real property interest. In plain English, that usually means a nonresident alien individual, foreign corporation, foreign partnership, foreign trust, or foreign estate selling U.S. property. The buyer is generally the withholding agent, which means the buyer is the one legally responsible for sending the withheld funds to the IRS.

This is where many sellers get tripped up. A person can be a non-citizen and still not be treated as a foreign person for FIRPTA purposes. The IRS uses tax-residency rules such as the green card test and substantial presence test. That means two homeowners with the same passport status may have different FIRPTA outcomes depending on their U.S. tax residency.

If you are a U.S. tax resident, you may be able to provide a non-foreign certification instead of being treated as a FIRPTA seller. If you are a foreign person for tax purposes, the sale may still move forward, but the withholding rules need to be handled correctly.

For Texas sellers, the practical reality is simple: title companies often ask FIRPTA questions early because the closing company wants to know whether withholding applies, whether a certification is available, and whether a withholding certificate request is pending.

How much can FIRPTA withholding be?

In many transactions, FIRPTA withholding is 15% of the amount realized, which usually means the gross sales price plus certain liabilities, not just the seller's gain. That is why FIRPTA can feel so heavy: the withheld amount may be much larger than the seller's actual final tax bill.

Here is the part most sellers need to understand first: FIRPTA withholding is usually based on the sales price, not on net proceeds and not on profit after expenses. If a qualifying foreign seller closes on a $500,000 Texas home sale, the withholding could be far higher than what the seller expects if they were only thinking about gain.

FIRPTA withholding scenarios

Situation	Typical withholding rule
Buyer will use the property as a residence and sales price is $300,000 or less	Usually 0% withholding
Buyer will use the property as a residence and sales price is $300,001 to $1,000,000	Often 10% withholding
Sales price is over $1,000,000	Usually 15% withholding
Buyer will not use the property as a residence	Usually 15% withholding

The IRS clearly states the general 15% withholding rule and the residence exception for sales at $300,000 or less. Industry guidance and IRS-linked summaries also reflect the 10% rate for qualifying residence purchases from $300,001 to $1,000,000. The buyer must be an individual and must have definite plans to live in the property for the required period.

Why this matters so much

Sale price	10% withholding	15% withholding
$300,000	$30,000	$45,000
$500,000	$50,000	$75,000
$850,000	$85,000	$127,500
$1,100,000	n/a	$165,000

That is real money sitting in limbo until the IRS processes the forms and the seller files the appropriate U.S. tax return. According to Sully Ruiz, licensed Texas REALTOR® with Sully Realty Group, this is why non-citizen sellers should never wait until the week of closing to ask whether FIRPTA applies.

Photo by Mack Ramirez on Unsplash

Can FIRPTA be reduced or avoided?

Yes. Some Texas sales qualify for an exception, and some foreign sellers can apply for reduced withholding. But the key is documentation. FIRPTA problems usually come from missing paperwork, bad assumptions, or starting too late.

The cleanest outcome is when FIRPTA does not apply at all because the seller provides a valid certification of non-foreign status. The IRS also lists several exceptions, including the personal-residence exception for certain lower-price purchases and cases where the seller receives an IRS withholding certificate excusing or reducing withholding.

Here are the most common paths:

1. Certification of non-foreign status

If the seller is not a foreign person for U.S. tax purposes, the seller may provide a certification under penalties of perjury with their name, U.S. taxpayer identification number, and address. A title company or closing attorney may hold that certification as a qualified substitute.

2. Buyer residence exception

If the buyer is an individual, intends to use the property as a residence, and the price falls within the right threshold, withholding may be reduced or eliminated. This is one reason buyer occupancy plans matter in a FIRPTA file.

3. IRS withholding certificate

A foreign seller can request a reduced or eliminated withholding amount through Form 8288-B. The IRS says it will generally act within about 90 days after receiving a complete application with all taxpayer identification numbers.

4. Nonrecognition or treaty-based situations

The IRS also recognizes some nonrecognition transactions and treaty-related cases, but those are more technical and should be reviewed with a qualified CPA or tax attorney.

Honest pros and cons of applying for reduced withholding

Option	Pros	Cons
Close with full withholding	Faster closing path if everyone is ready	More cash held back up front
Apply for reduced withholding	May preserve more of the seller's proceeds	Requires early prep, complete documents, and patience
Claim refund later on tax return	Can recover over-withheld funds	Refund timing may be slow

For many families, the best move is not to guess which option fits. It is to review the numbers early with the title company and a tax professional, then decide whether a withholding certificate is worth pursuing.

What documents and deadlines matter most?

The FIRPTA process is paperwork-heavy, and deadlines matter. In a typical sale, the buyer reports and pays the withholding using IRS Forms 8288 and 8288-A. If a withholding certificate request is filed on time, the buyer may be able to hold the funds pending the IRS decision instead of remitting immediately.

Here is the basic timeline sellers should know:

Step	Main form or action	Typical timing
Determine seller status	FIRPTA questionnaire / certification	Before listing or early in escrow
Request reduced withholding	Form 8288-B	Ideally well before closing
Report and pay withholding	Forms 8288 and 8288-A	Generally within 20 days after transfer, unless a timely certificate request is pending
Claim credit for withheld tax	U.S. tax return with stamped 8288-A	After closing when filing taxes

The IRS says both the buyer and seller need taxpayer identification numbers on these forms. If the seller does not have an SSN and qualifies for an ITIN, the IRS provides ITIN guidance for foreign property buyers and sellers. That step alone can add time, which is another reason to start early.

Who handles what?

Party	Usual role
Seller	Discloses status, provides TIN/ITIN info, signs certifications, works with tax advisor
Buyer	Usually the legal withholding agent under FIRPTA
Title company	Coordinates closing paperwork and often helps manage FIRPTA handling
CPA or tax attorney	Advises on residency status, gain, withholding reduction, and tax filing
REALTOR®	Helps spot the issue early and keeps the transaction organized

If you need help organizing the bigger selling process, start with /consult. If your next move may involve buying again, you can also use /screening.

What should a non-citizen seller do before closing in Texas?

The smartest sellers treat FIRPTA like a pre-listing issue, not a closing-table surprise. Before your home goes live, confirm your tax residency status, gather your ID numbers, and ask whether the title company expects withholding on your transaction.

A practical Texas seller checklist looks like this:

1. Ask early whether you are a foreign person for FIRPTA purposes. Do not assume citizenship status answers that question by itself.
2. Loop in a CPA or tax attorney before accepting an offer if you think withholding may apply.
3. Confirm whether you already have a TIN or ITIN. If not, ask what documents are needed.
4. Review whether a withholding certificate could make sense based on your likely gain and basis.
5. Tell your REALTOR® and title company early so contract-to-close planning is realistic.
6. Keep closing documents because they may be needed later when claiming credit or a refund.

According to Sully Ruiz, licensed Texas REALTOR® with Sully Realty Group, the best transaction strategy is a team strategy. A bilingual agent can help coordinate conversations among the seller, title officer, and tax professional so the seller understands what is happening before money gets held back.

Photo by Gabriel Tovar on Unsplash

What mistakes should sellers avoid?

Most FIRPTA problems come from delay, not from the law itself. Sellers get into trouble when they wait too long to identify their status, assume the title company will fix everything automatically, or confuse withholding with the final tax owed.

Here are the biggest mistakes to avoid:

• Waiting until closing week to mention immigration or tax-residency questions.
• Assuming FIRPTA is based on profit only. In many cases, withholding is based on the amount realized.
• Thinking non-citizen always equals foreign person. That is not always true under IRS rules.
• Forgetting about TIN or ITIN requirements. Missing numbers can delay the stamped Form 8288-A you need later.
• Skipping professional advice when the sale, residency, or ownership structure is complex.
• Not budgeting for cash flow. Even if you expect a refund, withheld money may be tied up for a while.

If your situation also involves inherited property, co-owners, or a home you originally bought with an ITIN-related loan path, it is worth reviewing the transaction before listing. That is especially true in the Austin metro, where many sellers are coordinating a sale and a next purchase at the same time.

FAQ

Can a non-citizen sell a house in Texas?

Yes. Non-citizens can sell Texas real estate. The main issue is whether FIRPTA withholding applies based on the seller's U.S. tax status.

Does FIRPTA mean I will lose 15% of my sale proceeds forever?

No. FIRPTA withholding is generally a withholding deposit, not automatically your final tax bill. You may receive credit or a refund when you file the proper U.S. tax return.

Who pays FIRPTA to the IRS?

Usually the buyer is the withholding agent, although the title company often helps coordinate the process.

What if I do not have a Social Security number?

You may still need a taxpayer identification number. The IRS explains how eligible foreign sellers can apply for an ITIN in FIRPTA-related situations.

Can FIRPTA withholding be reduced before closing?

Sometimes, yes. A seller, buyer, or buyer's agent may request a withholding certificate using Form 8288-B if reduced withholding is justified.

Is FIRPTA a Texas tax?

No. FIRPTA is a federal tax withholding rule, not a Texas state real estate tax.

Need help planning your sale?

If you are selling a home in Texas as a non-citizen and want a bilingual team that understands the moving parts, Sully Ruiz with Sully Realty Group can help you prepare before the contract and closing timeline start working against you.

• Book a free consultation: /consult
• Start with a readiness conversation: /screening

About the Author

Sully Ruiz is a licensed Texas REALTOR® (TREC #0742907) with Sully Realty Group / Keller Williams Austin NW. A bilingual real estate professional serving the Austin metro, Sully has helped 46+ families purchase homes using ITIN loans and has secured up to $30K in grants for qualifying buyers. She is a member of NAR, Texas REALTORS®, ABOR, and NAHREP. Book a free consultation →

Market data is for informational purposes only and is subject to change. Sources are believed to be reliable but are not guaranteed. Contact Sully Ruiz for a personalized market analysis.

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Sources

• IRS — FIRPTA withholding — accessed May 2026
• IRS — Exceptions from FIRPTA withholding — accessed May 2026
• IRS — Reporting and paying tax on U.S. real property interests — accessed May 2026
• IRS — Form 8288-B — accessed May 2026
• IRS — ITIN guidance for foreign property buyers and sellers — accessed May 2026
• IRS — Determining an individual's tax residency status — accessed May 2026