The reference documents that CIPS designees, international real estate attorneys, and cross-border practitioners need in one place — FIRPTA rules, estate tax treaty matrix, FinCEN GTO county coverage, capital control quick reference, and entity structure guide. Updated as the law changes.
The Foreign Investment in Real Property Tax Act (FIRPTA) governs withholding requirements when foreign nationals sell U.S. real property. This is the most commonly misunderstood rule in cross-border real estate.
| Scenario | Withholding Rate | Applied To | Notes |
|---|---|---|---|
| Standard NRA seller, investment property | 15% | Gross sales price | Standard rate since 2016; previously 10% |
| NRA seller, property ≤$300K, buyer primary residence | No withholding | — | Buyer must intend to use as primary residence; must sign affidavit |
| NRA seller, property $300K–$1M, buyer primary residence | 10% | Gross sales price | Reduced rate for primary residence buyer; requires buyer affidavit |
| U.S. tax resident seller (green card or SPT) | No withholding | — | Must provide Form W-9 or equivalent at closing |
| Domestic U.S. entity as seller (LLC with U.S. filing) | No withholding (if compliant) | — | Entity must be properly formed and have U.S. EIN; foreign disregarded entities may still trigger FIRPTA |
| Seller obtains withholding certificate | IRS-determined amount | Net gain, not gross | IRS Form 8288-B; typically takes 90+ days; must be filed before closing |
The U.S. estate tax exposure for non-resident aliens holding U.S. real property in personal name is severe — $60,000 exemption vs. $13.61M for U.S. citizens. Only a small number of countries have estate and gift tax treaties with the U.S. that provide relief. This matrix covers every major source country.
| Country | Estate Tax Treaty | Income Tax Treaty | NRA Exemption | Estate Tax on $2M U.S. Property | Recommended Structure |
|---|---|---|---|---|---|
| United Kingdom | Yes | Yes | Proportionate exemption | Significantly reduced — calculate per treaty ratio | Entity still recommended for asset protection |
| Germany | Yes | Yes | Proportionate exemption | Significantly reduced — calculate per treaty ratio | Entity still recommended |
| France | Yes (limited) | Yes | Partial relief only | Reduced but not eliminated | Entity strongly recommended |
| Japan | Yes | Yes | Proportionate exemption | Significantly reduced | Entity still recommended |
| Australia | No | Yes (income only) | $60,000 | ~$776,000 | U.S. LLC owned by Australian trust required |
| Canada | No (income treaty only) | Yes | $60,000 | ~$776,000 | Entity structuring essential |
| Mexico | No | No | $60,000 | ~$776,000 | U.S. LLC + Mexican holding entity |
| Colombia | No | No | $60,000 | ~$776,000 | U.S. LLC + foreign holding entity |
| Brazil | No | No | $60,000 | ~$776,000 | U.S. LLC + foreign holding entity |
| Argentina | No | No | $60,000 | ~$776,000 | U.S. LLC + Uruguayan/BVI holding entity |
| Venezuela | No | No | $60,000 | ~$776,000 (NRA only — U.S. residents exempt) | Entity essential for non-U.S. resident Venezuelans |
| UAE | No | No | $60,000 | ~$776,000 | U.S. LLC + UAE/Cayman holding entity |
| India | No | Yes (income only) | $60,000 | ~$776,000 | Entity structuring essential |
| China (mainland) | No | Yes (income only) | $60,000 | ~$776,000 | HK or Singapore holding + U.S. LLC |
| South Korea | No | Yes (income only) | $60,000 | ~$776,000 (+ Korean inheritance tax up to 50%) | Korean holding entity + U.S. LLC essential |
| Nigeria | No | No | $60,000 | ~$776,000 (NRA only — U.S. residents exempt) | Entity for Nigeria-resident buyers |
Estate tax estimates assume $60,000 exemption, 40% marginal rate on the remainder above the exemption. Actual liability depends on total U.S. situs assets, applicable credits, and current applicable exclusion amount. Consult a U.S. estate planning attorney for precise calculations.
FinCEN's Geographic Targeting Orders (GTOs) require disclosure of the beneficial ownership of legal entities making all-cash real estate purchases above the threshold in covered metropolitan areas. Current threshold: $300,000 in most covered areas. Purchases below the threshold are not covered; mortgage-financed purchases are not covered.
The logistical challenge of getting international funds to a U.S. closing is governed by each source country's foreign exchange rules. This quick reference covers the key limits, regulatory bodies, and wire timelines for every major corridor.
| Country | Annual Outbound Limit | Regulatory Body | Wire Timeline (from country) | Key Note |
|---|---|---|---|---|
| Canada | No limit | FINTRAC (AML reporting) | 1–3 business days | Clean corridor — no capital control friction |
| Australia | No limit | AUSTRAC (AML reporting) | 1–3 business days | Cleanest corridor globally — no controls, English-speaking |
| United Kingdom | No limit | FCA (AML reporting) | 1–3 business days | Large transfers require source of funds documentation |
| UAE / GCC | No limit (AED/USD pegged) | CBUAE | 2–5 business days | AED/USD peg eliminates currency risk; FATF enhanced screening |
| Colombia | DIAN reporting, moderate controls | Banco de la República / DIAN | 5–10 business days | Large transfers require DIAN declaration; Banco de la República Form 4 required for RE purchases |
| Brazil | BACEN compliance required | Banco Central do Brasil | 5–10 business days | All outbound RE transfers require BACEN registration; allow extra time for bank compliance |
| Mexico | SAT reporting required for large transfers | SAT / Banxico | 5–10 business days | SAT foreign asset reporting obligation on the buyer; Mexican banks may request documentation |
| India (FEMA/LRS) | $250,000 USD/year per person | Reserve Bank of India (RBI) | 7–14 business days | NRIs (non-resident Indians with foreign income) have no LRS cap; India-resident buyers are capped. EB-5 and property purchases from existing NRE accounts may be structured separately |
| South Korea | $50,000 USD/year — MOSF approval above | Ministry of Strategy and Finance / Bank of Korea | 10–21 business days with approval | Above $50K requires MOSF approval — procedural but adds 2–3 weeks. Most large Korean buyers fund from offshore accounts accumulated over time. |
| China (SAFE) | $50,000 USD/year — most restrictive | State Administration of Foreign Exchange (SAFE) | Typically via offshore accounts | Almost no mainland Chinese buyer wires directly from China. Funds come from HK, Singapore, or Cayman offshore accounts. Source of funds documentation traces through these accounts. |
| Argentina (Cepo) | ~$200 USD/month official | Banco Central de la República Argentina (BCRA) | Wires from Uruguay/offshore only | No Argentine buyer wires from Argentina. Capital is in Uruguayan banks, Cayman accounts, or U.S. bank accounts accumulated over years. Milei administration has partially relaxed — verify current status with transaction attorney. |
| Nigeria | CBN compliance required; large transfers need documentation | Central Bank of Nigeria (CBN) | 4–8 weeks | 2023 exchange rate unification simplified the process but CBN still requires documentation for large outbound transfers. Work with Nigerian bank experienced in international RE. Most Nigerian-American buyers fund from U.S. accounts — no CBN issue. |
| Venezuela | Effectively no outbound transfers | BCV (Banco Central de Venezuela) | Not applicable | Venezuelan buyers are almost universally already U.S. residents with U.S.-earned capital. Direct Venezuela-to-U.S. wire is not a realistic scenario in the current environment. |
The right entity structure eliminates FIRPTA exposure at sale, removes estate tax exposure at death, provides asset protection, and creates a clean rental income reporting framework. The wrong structure — or no structure — creates avoidable liability. Here are the standard structures by buyer profile.
Truestead Law provides entity structuring, FIRPTA compliance, and cross-border closing coordination for foreign nationals purchasing U.S. real estate.