The sale of U.S. real property entails the transfer of U.S.-based real estate by foreign owners. This process can occur when a business is being closed down.
A key element of real estate investment in this context is the Foreign Investment in Real Property Tax Act (“FIRPTA”) regime. Under FIRPTA, any gain from the sale of a U.S. real estate property interest by a foreign individual is typically regarded as income “effectively connected” to a U.S. trade or business.
As of 2025, foreign individuals selling real estate may be subject to capital gains tax at the rate of15% and 20%. For corporations, the applicable tax rate on capital gains is 21%. For a detailed discussion about FIRPTA, please refer to the relevant article.