1.How much tax a foreigner has to pay if he sold US property ? 2. Does a 65 years foreign buyer entilte to 20% off the property tax ?

Asked by Wongarchie, Houston, AK Tue Jun 28, 2011

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Mark McNitt, Agent, Houston, TX
Tue Jun 28, 2011
A foreigner owner of a property pays the same property taxes as a US citizen and receives the same tax breaks if they apply. If you are over 65, you can file for an over 65 homestead exemption which cuts your property tax bill about half and freezes the accessed value of the home so the tax bill won't go up.

When you sell a property, the title company may have to hold back some of your proceeds until they clear it with the IRS, but that is typically not a long wait and only 10%-20% of your proceeds. Good news is if you are paid up on other taxes, you get all those proceeds.

Your best bet is to check with the county appraisal district to see how your over 65 homestead exemption helps you and a good CPA in regards to all your tax questions.

Good Luck!

Mark McNitt
Bernstein Realty
m# 832-567-4357
1 vote
Bruce Lynn, Agent, Coppell, TX
Tue Jun 28, 2011
Wong you need to see a CPA and the county tax appraiser.

You really have two questions. Likely foreign citizen pays no different than US citizen as far as I know.
It will also depend if the property is your personal residence or an investment property.

1st question is income tax.....see a CPA for this to advise you about how much income tax might be.
You just pay on profits if any and there is a large exemption on personal homes.

2nd question is property tax......again it normally depends if the property is your personal and primary residence or not. For this question you will need to speak with your county tax appraisal district.

The main difference for property sold by US citizens vs non-citizen is there can be tax withholding by the title company at the sale. You may not actually have any tax obligation, but they still withhold and send it to the IRS. Then it is up to you to file a tax return to report any taxes you owe, or obtain a refund.
Web Reference:  http://www.teamlynn.com
1 vote
Gerard Carney, Agent, Spring Hill, FL
Tue Jun 28, 2011
You are responsible for the difference of the original purchase price and the latest selling price, the amount being a positive number would be a capital gain, this would be income made in the United States and is subject to income tax, under normal rates for Capital Gains!
0 votes
Alma Kee, Agent, Tampa, FL
Tue Jun 28, 2011

There are also rules depending on if the buyer will occupy as their primary residence for at least 50% of the time.

Here's info:


All the best,
0 votes
Guy Gimenez, Agent, Austin, TX
Tue Jun 28, 2011
1. Per the FIRPTA IRS rules (with some exceptions of course), a foreign person / entity who sells a U.S. property should have 10% of the proceeds withheld by the purchaser.

2. Each state's taxing entities have different rules regarding freezing of taxes, how properties are valued and homesteading, so I can't answer that for you.
Web Reference:  http://www.phgbrokers.com
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