A foreign seller or buyer of U.S. real property who can't get a Social Security number needs an ITIN for the FIRPTA forms. You apply on Form W-7 under Exception 4, attaching the FIRPTA form and your closing documents instead of a tax return.
| Fact | Detail |
|---|---|
| FIRPTA withholding | 15% of the amount realized; 10% for a residence bought for $1 million or less; none for a residence bought for $300,000 or less |
| Who withholds | In most cases, the buyer |
| Withholding due | Forms 8288 and 8288-A with payment by the 20th day after the date of the sale, even if the buyer has no TIN yet |
| Forms that need a taxpayer ID | Forms 8288, 8288-A, and 8288-B |
| ITIN route | Exception 4, box h on Form W-7, with no tax return attached |
| Documents | A completed Form 8288, 8288-A, or 8288-B, plus the sales contract, Settlement Statement (HUD-1), or Closing Disclosure |
| ITIN timing | Notice of your application status in 7 weeks, or 9 to 11 weeks from January 15 to April 30 or from overseas |
| Withholding certificate timing | The IRS generally acts within 90 days of a complete application, including all parties' TINs |
Do you need an ITIN to sell U.S. property as a foreigner?
Yes, if you can't get a Social Security number. A foreign seller of U.S. real property needs a taxpayer identification number (TIN) to request reduced withholding and to pay any required withholding.
An ITIN is a 9-digit number the IRS issues to individuals who need a U.S. taxpayer identification number but don't have and aren't eligible for an SSN.
Treasury Decision 9082, effective November 4, 2003, requires buyers and foreign sellers to list their TINs on the FIRPTA forms.
Without a TIN, the seller's copy of Form 8288-A won't be stamped, and Form 8288-B can't be processed.
What is FIRPTA withholding?
FIRPTA withholding is tax the buyer holds back when a foreign person sells U.S. real property. The buyer must withhold 15% of the amount realized, generally the sales price. The rate was 10% for dispositions before February 17, 2016.
For example, on a $600,000 sale of property the buyer won't live in, the buyer withholds 15%, or $90,000. That money goes to the IRS, not to the seller.
FIRPTA is the Foreign Investment in Real Property Tax Act of 1980. A disposition covers a sale, an exchange, a gift, and other transfers.
In most cases the buyer is the withholding agent, the person who holds back the tax and sends it to the IRS. A buyer who fails to withhold may be held liable for the tax.
The buyer reports the withholding on 2 forms:
- Form 8288, the U.S. Withholding Tax Return for Certain Dispositions by Foreign Persons.
- Form 8288-A, the Statement of Withholding, which shows the amount withheld for the seller.
When is no FIRPTA withholding required?
Generally, no FIRPTA withholding is required when the buyer acquires the property as a residence and the sales price is not more than $300,000. Notification requirements must still be met.
For the $300,000 exemption, the buyer or a family member must plan to live there. The plan must cover at least 50% of the days the property is used, in each of the first 2 years after the transfer, counted as 12-month periods.
A residence bought for $1 million or less gets a reduced rate. The buyer withholds 10% instead of 15%.
Why does Form 8288-B need an ITIN?
Form 8288-B needs an ITIN because it requires a TIN for every party, and the IRS will not process it without one. A seller without an SSN applies for the ITIN by attaching Form 8288-B to Form W-7.
Form 8288-B, the Application for Withholding Certificate, is how a seller asks to reduce or eliminate FIRPTA withholding. One ground is that the 15% withheld would be more than the seller's maximum tax liability.
If your gain is small, the 15% held at closing can be far more than your tax. Say 15% of a $600,000 sale, $90,000, is withheld. If your maximum tax on the sale is well under $90,000, Form 8288-B is how you ask the IRS to withhold less.
The IRS generally acts on a withholding certificate within 90 days after it receives a complete application, including the TINs of all parties.
A seller who applies must tell the buyer in writing. Do it on the day of the transfer or the day before.
The buyer still withholds at closing. But the buyer doesn't have to send it in until the 20th day after the IRS mails its decision on the certificate.
How do you get FIRPTA withholding back later?
You get credit for FIRPTA withholding on your U.S. tax return. File Form 1040-NR using your ITIN and attach the date-stamped Form 8288-A as proof of the withholding.
That is the slower route. The 2 routes compare like this:
| Category | Form 8288-B withholding certificate | Form 1040-NR credit |
|---|---|---|
| When | Around the sale | Later, on your tax return |
| What it does | Asks the IRS to reduce or eliminate the withholding | Claims credit for the amount already withheld |
| What it needs | A TIN for every party | Your ITIN and the date-stamped Form 8288-A |
A seller without a TIN won't have a date-stamped Form 8288-A. That seller first needs an ITIN under Exception 4.
What is Exception 4 on Form W-7?
Exception 4 is the Form W-7 exception for a party to a disposition of U.S. real property by a foreign person. Such a disposition is generally subject to FIRPTA withholding. Exception 4 lets you get an ITIN without a tax return.
Exception 4 may apply to the buyer or another transferee such as a withholding agent. A foreign seller without an SSN may also apply under Exception 4.
Exception 4 may also apply if you have a notice of non-recognition. That is the seller's notice that no gain or loss is recognized on the transfer under a nonrecognition rule in the tax code, as in some like-kind exchanges.
On Form W-7, check box h ("Other") and write "Exception 4" next to box h.
What documents do you need for an ITIN under Exception 4?
As of the December 2024 Form W-7 instructions, an Exception 4 ITIN needs Form W-7, a FIRPTA form, a closing document, and proof of identity. You don't attach a tax return.
- Form W-7 with box h checked and "Exception 4" written next to it.
- A completed Form 8288, Form 8288-A, or Form 8288-B.
- A closing document: a copy of the real estate sales contract, the Settlement Statement (HUD-1), or the Closing Disclosure.
- Proof of identity and foreign status: a valid passport alone, or at least 2 types of documents. They must be originals or certified copies from the issuing agency.
If you are the seller, also attach copies of the Forms 8288 and 8288-A the buyer submitted.
For a notice of non-recognition, swap the closing document for papers that show the date, the parties, and the type of transfer. Examples are the deed, a Direction to Convey form, or a document naming the replacement property in a like-kind exchange.
How do you apply for an ITIN for a FIRPTA sale?
The simplest way to apply is to have a Certifying Acceptance Agent (CAA) prepare, check, and mail your Exception 4 Form W-7 package. A CAA is a person or firm authorized by the IRS to do that.
With a CAA, the steps are:
- The CAA completes and reviews Form W-7 with box h and "Exception 4".
- You add Form 8288-B if you want reduced withholding.
- The CAA authenticates most of your identity documents and returns them at the end of the appointment.
- The CAA mails the application to the IRS.
Mailed originals take up to 60 days to come back. That is hard to plan around a closing.
A CAA also deals with the IRS if something goes wrong. It receives copies of your ITIN notices.
CAAs work in the U.S. and abroad. That helps a seller who lives overseas.
How long does an ITIN for FIRPTA take?
After you apply, the IRS notifies you of your application status in 7 weeks, typically, though it can take 9 to 11 weeks from January 15 to April 30 or if you applied from overseas.
Say you sign a contract on March 1 and apply that week. In peak season, the notice may not come until mid-May.
Now say the sale closes in mid-April. Your ITIN notice is still weeks away, so the IRS can't act on Form 8288-B yet. Wait until closing to apply, and the notice slips to mid-June or early July.
The IRS generally acts on a withholding certificate within 90 days after it has a complete application. It isn't complete until every party's TIN is on it.
So start the ITIN when the sale goes under contract, not at closing.
What if the buyer has no TIN when the withholding is due?
The buyer still pays on time. A buyer without a TIN files Forms 8288 and 8288-A with the payment. They go to the IRS in Ogden, Utah. The deadline is the 20th day after the date of the sale.
The buyer sends the ITIN application separately to the ITIN Operation in Austin, Texas. That package has Form W-7 with "Exception 4" next to box h and a copy of Forms 8288 and 8288-A, with no payment.
What if the seller has no TIN when Form 8288-A is filed?
If the foreign seller's TIN is missing, the IRS will not date stamp or mail Form 8288-A Copy B to the seller. It mails Letter 3794 SC/CG asking the seller to apply for an ITIN.
Once the ITIN is issued, the seller writes it on Letter 3794 SC/CG and mails the letter back. The IRS then stamps Copy B and mails it to the seller.
What happens if your ITIN application for FIRPTA is rejected?
A rejected ITIN application stops the attached Form 8288-B too. The IRS will not process Form 8288-B. Its FIRPTA unit sends Letter 3793 SC/CG to the buyer and the foreign seller. The letter explains how to fix the problem.
The IRS only issues ITINs on applications that are complete and show a tax need. To lower that risk, send a complete Form W-7 with the FIRPTA form and a closing document, so the tax need is plain.
When you reapply, include a copy of Letter 3793 SC/CG with Form W-7. That way it is considered under Exception 4.
If the reason for rejection can't be resolved, the buyer must file Forms 8288 and 8288-A and send in the withholding.
What if the seller is a foreign corporation?
An ITIN is for individuals, so a foreign corporation needs an Employer Identification Number (EIN) instead. It applies for one on Form SS-4.
A foreign corporation can make an IRC section 897(i) election. That filing asks to treat it as a domestic corporation for FIRPTA. That election must include the corporation's EIN, name, and address.
Frequently asked questions
Can a nonresident get reduced FIRPTA withholding without an ITIN?
Not without a TIN. Form 8288-B requires one, so a seller without an SSN applies for an ITIN by attaching Form 8288-B to Form W-7.
What do I write on Form W-7 for a real estate sale?
Check box h ("Other") and write "Exception 4" next to it. Attach the FIRPTA form and a closing document.
Does the buyer or the seller apply for the ITIN?
Each one who lacks an SSN applies for their own ITIN. Exception 4 may apply to the buyer or another transferee, and a seller without an SSN applies by attaching Form 8288-B to Form W-7.
Do I need a tax return to get an ITIN for FIRPTA?
No. Under Exception 4, Form W-7 goes in without a tax return. The FIRPTA form and the closing document show your tax need.
Do I have to tell the buyer I applied for a withholding certificate?
Yes. A seller who applies must tell the buyer in writing on the day of the transfer or the day before.
How long does a FIRPTA withholding certificate take?
The IRS generally acts within 90 days after it receives a complete application, including the TINs of all parties to the transaction.
What is the FIRPTA withholding rate in 2026?
15% of the amount realized, for dispositions on or after February 17, 2016. A residence bought for $1 million or less gets a reduced 10% rate.
What is Letter 3793 SC/CG?
Letter 3793 SC/CG is the IRS letter sent to the buyer and foreign seller when a FIRPTA-related ITIN application is rejected. Include a copy when you reapply.
Why didn't I get my copy of Form 8288-A?
The IRS won't stamp or mail Copy B while the seller's TIN is missing. It sends Letter 3794 SC/CG asking the seller to get an ITIN first.
How long does an ITIN take for a property sale?
The IRS notifies you of your application status in 7 weeks, typically, or 9 to 11 weeks from January 15 to April 30 or from overseas.
Sources
- ITIN guidance for foreign property buyers/sellers
- FIRPTA withholding
- Exceptions from FIRPTA withholding
- Withholding certificates
- Instructions for Form 8288 (Rev. January 2026)
- Instructions for Form W-7 (Rev. December 2024)
- How do I apply for an ITIN?
Michael B
