Changes in the FIRPTA

Winter 2003 CSANews Issue 49  |  Posted date : May 02, 2007.Back to list

As of November 3, 2003 anyone who purchases property from a foreigner on U.S. soil (i.e. a Canadian who owns U.S. Property) that is valued over $300,000 USD will be required to withhold 10 per cent of the purchase price until the seller provides an Individual Taxpayer Identification Number (ITIN).

The ITIN allows the IRS to verify that the property seller is paying the income tax that may be required as a result of the sale.

If you are already filing tax returns with the IRS as a result of renting your US Property, you will already have an ITIN. A Social Security Number will work as well. If you do not provide an ITIN you will forfeit the 10 per cent withholding tax.

In order to obtain an ITIN, you need to complete IRS Form W-7 and allow at least six weeks for processing.

For more information, you may contact the IRS at:

Internal Revenue Service
P.O. Box 21086
Drop Point 8731 FIRPTA Unit
Philadelphia, PA 19114