FIRPTA takes up to 15 percent of the gross sales price off the top when a Canadian resident sells Florida property — but with an ITIN, the right forms, and Canada’s foreign tax credit, most of that money comes back. Every spring, snowbirds list condos from Hollywood to Naples and meet the rules of FIRPTA for Canadian sellers at the closing table. The withholding is not an extra tax; it is a deposit the IRS holds against your real bill. Planning ahead decides whether it ties up your equity for a year or for a few weeks.
Why FIRPTA reaches every snowbird
Canada has no exemption. The US–Canada tax treaty prevents double taxation, but it does not waive the withholding, so a retired couple from Toronto is treated like any other foreign seller. The IRS makes the buyer the withholding agent, and Florida title companies apply the rule automatically at every closing. If the law itself is new to you, start with our guide on what is FIRPTA.
FIRPTA for Canadian sellers: what comes out at closing
- Standard 15 percent: withheld on the gross sales price — not on your gain.
- Reduced 10 percent: price between $300,001 and $1,000,000 and the buyer will use the home as a residence.
- Full exemption: price of $300,000 or less and the buyer certifies they will live there most of the time.
- Form 8288-B: a withholding certificate filed before closing caps the withholding at your actual expected tax.
ITINs and the 1040-NR refund
The withholding almost always exceeds the true US tax on your gain. That is the heart of FIRPTA for Canadian sellers: the money is recoverable, but only through paperwork. After the year of sale ends, you file Form 1040-NR with an ITIN and the stamped Form 8288-A from closing, and the IRS refunds the excess. Refunds take months, so sellers who want the cash sooner should read how to reduce FIRPTA withholding before the closing date instead. Apply for ITINs early — a missing number is the most common delay in the whole process.
The Canadian side of the sale
Canada taxes residents on worldwide income, so the same gain also goes on your Canadian return, converted to Canadian dollars. The treaty’s foreign tax credit then lets you subtract the US tax you actually paid, so the profit is not taxed twice. Note that a Florida condo rarely qualifies as your principal residence at home. Some snowbirds skip the exit entirely and trade up into a Florida rental that finances itself — test that idea with our DSCR calculator. This article is general information, not tax advice; we coordinate with cross-border CPAs on every file.
A typical deal
A retired couple from Ontario sells their Hallandale Beach condo for $520,000 after buying it years ago for $410,000. Their buyer will live in the unit, so the reduced 10 percent tier applies and $52,000 is withheld instead of $78,000. Their actual US tax on the gain works out near $17,000. The following year they file 1040-NR returns with ITINs and the stamped 8288-A, and the IRS refunds about $35,000. In Canada, they report the gain and claim a foreign tax credit for the $17,000 — nothing is taxed twice.
Selling your Florida property from Canada?
Alpha Equity Lending works with Canadian owners across Florida — FIRPTA planning alongside your cross-border CPA, ITIN timing, and financing if you are trading into your next property. Tell us about your condo or home through our submit your deal page and we will walk you through the whole timeline — in English or Spanish.
By Andres Jara — Alpha Equity Lending (NMLS #1855083). 20+ years in real estate finance, an MS in Finance, and an active South Florida investor and landlord.
