What is FIRPTA and how does an ITIN help?

FIRPTA (Foreign Investment in Real Property Tax Act) requires buyers to withhold 15% of the gross sale price when purchasing property from a foreign seller. As the foreign seller, you need an ITIN to file a US tax return and claim a refund if the FIRPTA withholding exceeds your actual tax liability on the sale.

Can I get a mortgage with an ITIN instead of an SSN?

Yes. Several US lenders offer ITIN mortgage programs for non-resident investors. These loans typically require a larger down payment (25% to 30%), higher interest rates, and proof of income. Your ITIN serves as your taxpayer identification number on all mortgage and tax documents.

Do I need to file US taxes on rental income from US property?

Yes. Non-resident property owners who earn rental income from US real estate must file Form 1040-NR annually. You report your rental income, deduct allowable expenses like property management fees, repairs, insurance, and depreciation, and pay tax on the net amount. Your ITIN is required on this return.

How long does it take to get an ITIN for real estate investment?

The IRS processes ITIN applications in 7 to 11 weeks when filed by mail. If you use a Certifying Acceptance Agent (CAA) like itin.so, your documents are pre-verified which can speed up processing. Apply well before your planned property closing date to avoid delays.

Can I use an LLC to buy US property as a foreign investor?

Yes. Many foreign investors form a US LLC to hold their real estate. The LLC needs an EIN (Employer Identification Number) for business tax filings, but you as the foreign owner still need an ITIN for your personal tax return. Using an LLC can provide liability protection and simplify property management.

ITIN for Real Estate Investors: US Property Guide

Foreign nationals investing in US ITIN real estate need an Individual Taxpayer Identification Number to purchase property, pay taxes on rental income, file annual returns, and comply with FIRPTA withholding rules. The ITIN serves as your tax ID on every document from the closing table to your annual 1040-NR filing. Without one, you face delays at closing, higher withholding rates, and potential penalties for unfiled returns. This guide covers every tax and compliance requirement for non-resident real estate investors in the US.

Why Real Estate Investors Need an ITIN

The IRS requires every person with a US tax obligation to have a taxpayer identification number. When you buy, own, or sell US real estate as a foreign national, you create multiple tax obligations: reporting rental income, paying capital gains tax on a sale, and complying with FIRPTA withholding. Your ITIN appears on every tax form associated with these obligations.

Title companies and closing attorneys routinely ask for your ITIN during the purchase process. Lenders offering ITIN mortgage programs require it on your loan application. Property management companies need it for 1099 reporting. In short, you cannot operate as a US real estate investor without a valid ITIN.

Not sure if you qualify? Check our guide on who needs an ITIN.

FIRPTA Withholding and Your ITIN

The Foreign Investment in Real Property Tax Act (FIRPTA) requires the buyer (or their agent) to withhold 15% of the gross sale price when purchasing US real property from a foreign person. This withholding is remitted to the IRS as a prepayment of the seller's tax liability on any gain from the sale.

Your ITIN is essential for FIRPTA compliance in two ways. First, the withholding agent reports the withholding to the IRS using your ITIN on Form 8288 and Form 8288-A. Second, you need your ITIN to file a US tax return (Form 1040-NR) reporting the sale and claiming a refund if the 15% withholding exceeds your actual capital gains tax.

For properties sold for less than $300,000 where the buyer intends to use the property as a residence, the withholding rate drops to 10%. For sales under $300,000 with a buyer who will use it as a primary residence, FIRPTA withholding may not apply. However, you still need an ITIN to file the return reporting the transaction.

Rental Income Taxes for Foreign Property Owners

Non-resident owners of US rental property must file Form 1040-NR each year. You have two options for how your rental income is taxed:

Option 1: 30% Flat Withholding on Gross Rent

Without making a special election, your rental income is subject to 30% withholding on the gross amount. Your property manager or tenant must withhold this amount and remit it to the IRS. You cannot deduct expenses under this method.

Option 2: Net Income Election (Section 871(d))

Most investors elect to be taxed on net rental income by filing a Section 871(d) election with their first return. This lets you deduct mortgage interest, property taxes, insurance, repairs, management fees, and depreciation. You pay tax only on the profit, which is often much lower than the gross rent.

Learn more about filing your rental income tax returns with ITIN.

ITIN Mortgage Options for Foreign Investors

Several US lenders offer mortgage programs specifically for ITIN holders. These programs have different requirements than traditional mortgages, but they make US property ownership accessible to non-residents without an SSN.

Down payment: Expect 25% to 30% down, compared to 20% or less for US residents. Some lenders require 30% for investment properties.
Interest rates: ITIN mortgage rates are typically 1% to 2% higher than conventional rates. Shop multiple lenders to find the best terms.
Documentation: You need proof of income (tax returns from your home country, bank statements, or employment letters), your ITIN, passport, and proof of US address (the property address works for investment properties).
Loan amounts: Most ITIN mortgage programs lend between $100,000 and $1,500,000, depending on the lender and the property type.

For a detailed comparison of ITIN mortgage lenders and their requirements, see our ITIN mortgage guide.

Property Management and Tax Compliance

Managing US property from abroad requires careful attention to tax compliance. Your property management company plays a key role. They must withhold taxes on your rental income (unless you make the net income election and provide them with the proper documentation) and issue you a 1042-S form at year-end showing income and withholding.

Provide your property manager with your ITIN and a completed W-8ECI form (Certificate of Foreign Person's Claim That Income Is Effectively Connected With the Conduct of a Trade or Business in the United States). This form, combined with the Section 871(d) election, eliminates the 30% gross rent withholding and allows you to pay tax on net income only.

Keep detailed records of all rental income, expenses, and improvements. These records are essential for your annual 1040-NR filing and for calculating your basis when you eventually sell the property.

Annual Tax Filing for Foreign Real Estate Investors

Every year, you must file Form 1040-NR to report your rental income (or the sale of property). The return is due by June 15 for non-residents, with an extension available to October 15. Key items on your return include:

Gross rental income from all US properties
Deductible expenses: mortgage interest, property taxes, insurance, repairs, management fees, travel to the property for maintenance
Depreciation: residential rental property is depreciated over 27.5 years, which significantly reduces your taxable income
Capital gains from any property sales during the year
FIRPTA withholding credits from Form 8288-A if you sold property

Do not skip your filing:

The IRS can deny deductions and assess penalties if you fail to file your 1040-NR on time. Filing every year also preserves your right to claim the net income election, which is critical for reducing your tax burden on rental income.

ITIN for Foreign Real Estate Investors in the US

Frequently Asked Questions About ITIN for Real Estate Investors

Yes. While you can technically close on a property without an ITIN, you need one to file the required US tax returns on rental income, report the sale of the property, and claim FIRPTA withholding refunds. Most title companies and lenders also require an ITIN during the closing process.

Ready to invest in US real estate with the right tax documentation?

Apply for Your ITIN Today