Chapter 04 · Sale
$300,000 FIRPTA Exception: Buyer's Personal Residence
When no FIRPTA withholding is required if the buyer intends to live in the property.
Direct answer · 60-second summary
The 60-second version
- ≤ $300,000 USD + buyer residence = no withholding
- $300K–$1M + residence = 10% withholding
- IRC Section 1445(c)
- Buyer signs affidavit (50% days, 2 years)
- Applies to rental property sale too
- Seller bears risk: affidavit may be challenged
- Canadians: exception applies to any eligible buyer
Acronyms used in this guide
- FIRPTA — Foreign Investment in Real Property Tax Act
- IRS — Internal Revenue Service
- FAR/BAR — Florida Realtors / Florida Bar
The $300,000 exception
IRC §1445(c) exempts buyer from FIRPTA if: (1) property acquired for buyer's personal residence; (2) price ≤ $300,000 USD. Applies even if seller is non-resident.
50% occupancy rule, 2 years
Buyer certifies by affidavit occupying ≥ 50% of days each year, 2 years. Minimum 183 days/year, 2 consecutive years.
Gray zone: $300K–$1M
Price between $300K and $1M + residence affidavit = 10% withholding instead of 15%.
Seller's risk
If buyer fails to meet affidavit, IRS may claim difference (15% vs. 0%). Some FAR/BAR contracts include indemnification.
Every figure, rate, threshold, and deadline in this guide is drawn from a verifiable primary source listed at the bottom of the page. The article is updated whenever the underlying rules change, with a fresh review date stamped at the top.
Sources and references
Disclaimer
This guide is for educational purpose only.
For concrete decisions, consult a licensed attorney.