Foreign Investors

At Castle Title, we value all our clients equally, regardless of your country of residence or your nationality. We have services in place to conduct your closing if you are located abroad and, particularly for clients who are most comfortable with the Spanish language, the ability to provide a Spanish-speaking notary. There are additional steps, however, that must be taken when foreign investors are involved to ensure we remain complaint with our underwriter’s guidelines and the IRS requirement known as the Foreign Investment in Real Property Tax Act of 1980 or FIRPTA.

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What is FIRPTA?

FIRPTA is a withholding, not a tax. Withholding is an amount held back used to pay potential taxes. If FIRPTA applies, the title company will collect the amount and send it to the IRS. The foreign seller can file a tax return at a later date to try to recoup some of that withholding.

Who is considered a “foreign person”?

Anyone who is not a US citizen or resident alien/legal permanent resident is considered a foreign person by the IRS. Additionally, business entities may be considered foreign, especially if the entity only has one manger, director, etc. who is foreign. The chart below is very helpful in determining if FIRPTA applies.

What if I don’t feel FIRPTA applies to me?

At Castle Title, we rely on the chart below and the advice of our underwriters in making this determination. You should discuss with your Certified Public Accountant (CPA) if you have additional questions. If your CPA is able to provide proof that FIRPTA does not apply to you, please forward that to us and we will provide it to our underwriter to review.

What if I am a foreign buyer?

As a foreign buyer, the process can be less complicated as there are no particular IRS requirements. To sign documents, we can arrange for a remote online notary. If you do not want to sign electronically, you will need to make an appointment at a US Embassy or Consulate (please allow ample time as appointments are not always easy to come by) or with an Apostille to witness your signing.

If you will be wiring funds from a bank not domiciled within the United States, please alert your escrow processor so we can provide you with the appropriate wiring instructions. We also recommend you familiarize yourself with the FIRPTA requirements listed above so that you can be prepared if you choose to sell your property in the future.

Castle Title

Our Underwriters

First American Title
Old Republic

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