NYC foreign investment lawyer Natalia Sishodia releases a new article (https://sishodia.com/should-i-withhold-firpta-at-closing-on-sale-of-ny-home-if-i-am-not-a-citizen/) that explains whether a foreigner should withhold FIRPTA at closing upon the sale of an NYC property. The lawyer explains that as a foreign investor, it may be difficult to sell properties in the United States. FIRPTA or Foreign Investment in Real Property Tax Act of 1980 states that funds from a transfer of real estate by a non-US citizen are subject to notice and withholding requirements in compliance with Section 1445 of the Internal Revenue Code.
“FIRPTA authorized the United States to tax foreign persons on sales of U.S. real property interests. FIRPTA requires that a buyer purchasing U.S. real property from a foreign person withhold 15% of the gross purchase price of the property. The amount withheld must be submitted within 20 days after the day of closing,” says the NYC foreign investment lawyer.
The lawyer explains that FIRPTA regulations often apply to the seller, however, a buyer should still find out whether the transferor is a foreign person. The buyer may be held liable for the taxes if a seller is a foreign person and the buyer failed to find that out. In the USA, anyone who is not a US citizen is considered a foreigner.
Attorney Natalia Sishodia mentions that there are also exceptions to FIRPTA withholding. She mentions that usually the transferee/buyer is the withholding agent. However, in some circumstances, FIRPTA withholding may not be required. There are also FIRPTA withholding rules that are very complex so it is usually advised to withhold FIRPTA when the buyer is in doubt.
In the article, attorney Sishodia also adds that it is possible to adjust the amount that must be withheld from the disposition of a U.S. real estate property interest. The transferee, transferee’s agent, or the transferor may request a withholding certificate. These requests usually take about 90-120 days to process.
Furthermore, if a Withholding Certificate was applied for, required funds must be submitted within 20 days of the Withholding Certificate notice. Attorney Natalia Sishodia emphasizes that it is important to seek the help of an experienced real estate attorney for these kinds of matters in order to ensure that the client understands their rights in the transaction.
About Sishodia PLLC
Sishodia PLLC’s team of professional New York City foreign investment lawyers pride themselves on their ability to give the most comprehensive advice and guidance possible for their clients. The lawyers at Sishodia PLLC take time to fully understand each client’s unique goals and circumstances, minimizing potential risks and issues. Call them today at (833) 616-4646 for a consultation.
Sishodia PLLC is a boutique New York real estate law firm offering experienced, individualized legal solutions to clients ranging from first-time homebuyers to seasoned real estate investors.
Sishodia PLLC
600 Third Avenue 2nd Floor, New York, NY 10016, United States
January 09, 2023 – New York City Real Estate Lawyer Natalia Sishodia Discusses Who Pays Real Estate Closing Costs in New York
January 06, 2023 – NYC Commercial Real Estate Attorney Natalia Sishodia Explains Purchasing and Selling Commercial Properties in New York
January 05, 2023 – New York City Real Estate Lawyer Natalia Sishodia Discusses the Disadvantages of Owning a Condo in New York
January 04, 2023 – NYC Real Estate Lawyer Natalia Sishodia Discusses the Red Flags One Should Look Out For When Buying a Condo
December 21, 2022 – NYC Real Estate Attorney Natalia Sishodia Explains What Questions One Should Ask Before Buying a Co-Op in New York
December 20, 2022 – Manhattan Estate Planning Attorney Natalia Sishodia Explains How Sishodia PLLC Can Help With Estate Planning
December 07, 2022 – NYC Condo Real Estate Attorney Natalia Sishodia Explains the Differences Between a Condo and a Co-op in New York
December 06, 2022 – New York City Real Estate Attorney Natalia Sishodia Explains How to Transfer a Title in New York
November 23, 2022 – NYC Foreign Investments Lawyer Natalia Sishodia Discusses the Legal and Tax Implications of Foreign Investment
November 22, 2022 – NYC Real Estate Attorney Natalia Sishodia Discusses How to Avoid the Transfer Tax in NYC