For decades, Tucson has been a second home for our neighbors to the north. But when it comes time for Canadian citizens to sell their Arizona property, they often face a rude awakening at the closing table: FIRPTA. (Navigating tax withholding requires a specialized team. See our Ultimate 2026 Guide to Selling Your Home in Tucson.)

The Foreign Investment in Real Property Tax Act (FIRPTA) can freeze a significant portion of your sale proceeds if not handled correctly.

What is FIRPTA?

Under US law, if a "foreign person" sells US real estate, the buyer is required to withhold 15% of the gross sales price (not just the profit) and send it to the IRS.
Example: On a $500,000 sale, $75,000 is withheld at closing.

The Exceptions (How to Keep Your Cash)

You may not have to lose that 15% at closing if you qualify for an exemption:

1. Sales Price Under $300k: If the buyer intends to use the home as a primary residence and the price is under $300,000, no withholding is required.
2. Withholding Certificate (Form 8288-B): You can apply to the IRS for a reduced withholding based on your actual capital gain tax liability. This must be done before the sale closes.

The "Snowbird" Exit Strategy

Selling as a foreign national requires a Title Company that understands international laws. A standard escrow officer might just withhold the 15% by default. At Oliver Realty, we partner with FIRPTA specialists to ensure you aren't giving the IRS an interest-free loan for 18 months.

Disclaimer: Oliver Realty, Michael Oliver, and Heather Oliver are licensed real estate professionals in Arizona, not CPAs or tax attorneys. This information is provided for educational purposes only and should not be considered tax advice. FIRPTA laws are complex and subject to change. You should strictly consult with a qualified CPA or tax professional regarding your specific situation prior to listing or selling your property.

Are you a Canadian seller ready to list? Contact Oliver Realty to ensure your transaction is structured correctly from Day 1.