📢 FIRPTA Isn't Just About Snowbird Homes

Last week, I touched on FIRPTA — the Foreign Investment in Real Property Tax Act— as it applies to Canadian individuals selling U.S. residential property.

But FIRPTA captures much more than just vacation or "snowbird" homes.

Today, I want to highlight the broader definition of U.S. real property interests (USRPIs)— and why it matters for Canadians with cross-border investments.

Under FIRPTA, gains from the sale of USRPIs are treated as effectively connected income (ECI) and are subject to U.S. tax— often requiring withholding of up to 15% of the gross sales price.

🔍 A U.S. real property interest includes: 

✔️ U.S. real estate: land, buildings, and improvements 

✔️ Interests in natural resources: mines, wells, and deposits 

✔️ Associated personal property: e.g., farming or construction equipment 

✔️ Interests in domestic corporations that are U.S. Real Property Holding Corporations (USRPHCs)

This means that Canadian investors with U.S. real property interest could be subject to FIRPTA— not just vacation home sellers.

💡 Planning ahead can help manage tax exposure and even recover withholding through proper filings.

If you're a Canadian individual or corporation with U.S. real estate exposure, it's essential to understand how FIRPTA may apply to your situation.

Let’s chat if you’re looking to navigate FIRPTA with confidence.