How FIRPTA works for a Canadian seller
FIRPTA is the law that lets the U.S. tax foreign persons who sell U.S. real property. It is collected as withholding at closing.IRS
- 1
The buyer withholds
The buyer (or the closing agent) generally holds back a percentage of the total amount realized and is liable if they fail to.IRS Which percentage and which exceptions apply is decided on your facts, not by this page.
At closing - 2
The buyer reports it
The buyer files Form 8288 and a Form 8288-A for each seller, generally by the 20th day after the transfer. Both forms need the seller's U.S. taxpayer ID.IRS
Forms 8288 and 8288-A - 3
The IRS stamps your copy
It sends the stamped copy B of Form 8288-A to you. Without your TIN on the form it cannot, and it mails a letter telling you to apply for an ITIN.IRS
Copy B - 4
You file a U.S. return
You report the sale and attach the stamped copy B to get credit for the tax withheld.IRS If the withholding was more than the tax you actually owe, the excess comes back to you as a refund.
Form 1040-NR
Our FIRPTA withholding refund guide walks through a full example.
The ITIN a Canadian seller needs
A foreign seller needs a U.S. TIN. If you cannot get an SSN, you apply for an ITIN. The IRS tells foreign sellers to pick box h on Form W-7 and write "Exception 4" beside it. A seller without a TIN sends the W-7 with identity documents, a completed Form 8288, 8288-A or 8288-B, and a copy of the sales contract, settlement statement or closing disclosure.IRS Enter your Canadian Social Insurance Number on line 6b of the W-7 as your home tax ID.IRS
See our ITIN for Canadians page. Nolly.com charges US$199 for a Standard ITIN application and US$265 for Priority, one time. Most applicants also need a U.S. tax return: from $199, quoted before you pay. Money back if the IRS rejects your ITIN application. Terms apply. The IRS says to allow about 9 to 11 weeks when you apply from overseas or during tax season. Timing depends on the IRS.IRS
Ways to reduce or avoid the withholding
- An exception. No withholding is required if, for example, the buyer is an individual using it as a home and the price is not more than $300,000, or the seller certifies they are not a foreign person.IRS
- A withholding certificate. The IRS may issue one if the withholding would exceed your maximum tax liability or the gain is exempt. It generally acts within 90 days of a complete application.IRS
Both are covered in FIRPTA exemptions, certificates and forms. Talk to your closing agent early, because a certificate request has to reach the buyer in writing on or just before the transfer date.IRS
What it means on your Canadian return
The U.S. tax is separate from what you report to the Canada Revenue Agency. If your Canadian return includes income from outside Canada that was taxed abroad, you may claim the federal foreign tax credit using Form T2209, up to a limit.CRA This page is general information, not tax advice. A cross-border tax professional can run the numbers.
Claim your FIRPTA refund with Nolly.com
Nolly.com is a Toronto company. Our FIRPTA refund service starts from US$499, quoted before you pay. We prepare your non-resident return, and if you need an ITIN we file it with the application.
Your questions answered
Yes. It applies to any foreign person selling a U.S. real property interest, including Canadians.IRS
File a U.S. income tax return for the year of the sale and attach the stamped Form 8288-A. If more was withheld than your tax, the excess is refunded.IRS
You need a U.S. taxpayer ID. A Canadian who cannot get an SSN applies for an ITIN, using Exception 4 on Form W-7.IRS
Generally the buyer (the transferee). If the buyer does not, they may be held liable for the tax.IRS
From US$499, quoted before you pay. See our FIRPTA page.
More questions? See the full Nolly.com FAQ.
How we checked this
Every IRS fact on this page comes from IRS.gov or the other official pages listed below and was checked on October 2, 2026. Nolly.com's own prices are the only exception. Nolly.com is a private company and is not part of the IRS.
Nolly Services Inc, d/b/a Nolly.com, appears on the IRS page Acceptance agents – Canada. Nolly.com is a private company and isn't part of the IRS.
- Instructions for Form W-7 (Rev. 12-2024)https://www.irs.gov/instructions/iw7
- Individual Taxpayer Identification Number (ITIN)https://www.irs.gov/individuals/individual-taxpayer-identification-number
- Canada Revenue Agency: Federal foreign tax credit (line 40500)https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-40500-federal-foreign-tax-credit.html
- FIRPTA withholdinghttps://www.irs.gov/individuals/international-taxpayers/firpta-withholding
- Exceptions from FIRPTA withholdinghttps://www.irs.gov/individuals/international-taxpayers/exceptions-from-firpta-withholding
- Reporting and paying tax on U.S. real property interestshttps://www.irs.gov/individuals/international-taxpayers/reporting-and-paying-tax-on-us-real-property-interests
- Withholding certificateshttps://www.irs.gov/individuals/international-taxpayers/withholding-certificates
- ITIN guidance for foreign property buyers/sellershttps://www.irs.gov/individuals/international-taxpayers/itin-guidance-for-foreign-property-buyers-sellers
Checked against IRS.gov on October 2, 2026. General information, not tax advice.
