The FIRPTA law (Foreign Investment in Real Property Tax Act) is a federal law that applies to the sale of real estate in the United States by foreign investors. Its purpose is to tax the income of nonresidents who sell real estate in the United States.
In Georgia, FIRPTA works similarly to how it does in the rest of the country. When a foreign investor sells real property in the State of Georgia, the buyer must withhold 15% of the property’s purchase price. This withholding acts as a type of tax security that the Internal Revenue Service (IRS) might later impose on the sale.
The buyer must report the transaction using Form 8288, which is sent directly to the IRS. In addition, the seller must file Form 8288-B within 20 days from the date of the property transfer. The seller must also pay any tax owed to the IRS. If the tax is less than 15% of the sale price, the IRS will issue a refund to the seller.
It is important to note that even if the seller is not a foreign citizen, they must provide a statement of residency or citizenship. If this information is not provided, the buyer is required to withhold 15% of the sale price.
Under FIRPTA in Georgia, buyers are required to withhold 15% of the sale price of real estate sold by foreign investors. The primary goal of this law is to ensure that appropriate taxes are paid on the sale of real estate in the United States by foreign investors.
