Every foreign national who buys property in Dallas-Fort Worth eventually asks the same question, usually years later: what happens when I sell? It's a fair question, and the honest answer involves a federal withholding rule most sellers have never heard of until it shows up on their closing statement. Let's clear it up now, well before you're anywhere near a listing agreement.

I'm Bob McCranie, Broker Associate at Texas Pride Realty Group – HomeSmart Stars, and after twenty-four years and over 1,150 transactions on both the buying and selling side, I've guided plenty of international owners through exactly this moment.

FIRPTA: The Withholding Rule Every Foreign Seller Needs to Know

The Foreign Investment in Real Property Tax Act, better known as FIRPTA, requires the buyer in a transaction to withhold a percentage of the sales price when the seller is a foreign national, and send that amount directly to the IRS. This isn't a penalty and it isn't an extra tax — it's a withholding mechanism designed to make sure the IRS eventually collects whatever capital gains tax is actually owed on the sale, since the government has limited ability to pursue a seller who lives outside the country after the fact. The standard withholding rate is fifteen percent of the gross sales price in most cases, though certain exemptions and reduced rates can apply depending on the sale price and how the buyer intends to use the property.

"A client selling a rental he'd owned for eight years assumed the fifteen percent withholding was simply gone for good. After his CPA filed the appropriate paperwork, he got a meaningful portion of that withholding refunded within a few months, because his actual tax liability was much lower than the flat withholding amount." — Bob McCranie

Reducing or Avoiding Withholding With the Right Planning

FIRPTA withholding is based on the gross sales price, not your actual profit, which means it can significantly overstate what you truly owe in tax, especially if you've owned the property for years and your real gain is modest. There are legitimate ways to apply for a withholding certificate from the IRS before closing, which can reduce the amount withheld to more closely match your actual tax liability instead of waiting to file a return and request a refund afterward. This process takes time, so it needs to start well before your closing date, not after you've already accepted an offer. I always loop in a CPA who specializes in FIRPTA the moment a foreign client starts talking about listing a property, not after.

What This Means for Your Listing Timeline

Because FIRPTA planning takes lead time, I encourage every foreign national client to start that conversation at least a couple of months before listing, especially for higher-value properties where the withholding amount is substantial. This is true whether you're selling a starter rental or something in the Colleyville luxury market, where withholding on a higher sales price can tie up significant cash for months if you don't plan ahead. Buyers currently searching Euless homes under 400k today should keep this in mind too — the sale you'll make years from now starts with decisions you make at purchase, including how you title the property and whether an entity structure might simplify a future exit.

When you're ready to actually list, I walk every client through our full seller resources so you understand each step of the process from listing to closing, FIRPTA included, well before the for-sale sign goes in the yard.

Selling from abroad doesn't have to be stressful, and FIRPTA withholding isn't something to fear once you understand what it actually is. With 45 five-star Google reviews and well over a thousand closings across both sides of the transaction, I'll make sure your exit is planned as carefully as your original purchase was.

One Last Thing Worth Remembering

FIRPTA applies based on the seller's status at the time of sale, not at the time of purchase, so even if your circumstances change over the years you own the property, it's worth checking in periodically to make sure your understanding of the rules is still current. Tax law shifts, exemption thresholds get adjusted, and the right CPA relationship built early on will keep you from relying on outdated information when the time finally comes to sell.