Are FIRPTA rules about to change?
What everyone in the trenches of real estate closings need to know
There's a big piece of legislation making waves, and it's going to touch on FIRPTA, the Foreign Investment in Real Property Tax Act. We're talking about H.R. 1, the One Big Beautiful Bill Act, passed by the House on May 22, 2025. we are here to break it down for you in plain English and let you know what it means for your day-to-day work.
So, what's the deal with H.R. 1 and FIRPTA? Right now, FIRPTA requires withholding on certain real estate sales by foreign sellers to cover potential U.S. tax liabilities. H.R. 1's Section 899 shakes things up by targeting sellers from specific countries-ones the Treasury Department flags for unfair tax practices. Not every foreign seller is affected, just those from countries on a Treasury list, which will be updated every quarter. If you're handling a closing with a foreign seller, you'll need to check if their country is on that list.
Here's the big change: FIRPTA withholding amounts are set to increase for these sellers. How much? We don't have the exact numbers yet-the Treasury will spell that out in their quarterly updates. This could mean more paperwork and higher withholding at closing for deals involving sellers from those listed countries. For you, it's about staying sharp and making sure you're withholding the right amount to keep things compliant, WE are keeping a close eye on H.R. 1 as it moves through Senate reconciliation and potentially heads to the President's desk.
If it becomes law, we'll be ready with the latest updates on how it impacts your closings.
Got questions? We're here for you. We're your partners in navigating these changes, so you can focus on closing deals with confidence. Stay tuned, and let's keep the conversation going!
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Mary Enzi CAA
Tax Solutions – FIRPTA Consulting
[email protected]
+1 (281) 578-1040
Katy TX
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