Real estate transactions with some level of foreign involvement are quite common in Texas—so common that the TREC residential contracts and Texas REALTORS® commercial contracts contain paragraphs related to the Foreign Investment in Real Property Tax Act (FIRPTA). Sooner or later, you are likely to work on a deal subject to FIRPTA.
Eight percent of all homes sold by foreign sellers in the U.S. from April 2018 to March 2019 were sold in Texas, according to NAR. Texas accounted for 10% of all homes purchased in the U.S. by international homebuyers during that same time frame. That’s 18,310 homes that will eventually be sold again, triggering FIRPTA questions.
And that’s just one year of sales. Combine those data points with the existing stock of foreign-owned Texas homes plus the billions of dollars of foreign-owned commercial properties across the state, and the magnitude of FIRPTA-impacted deals becomes clearer.
The time to prepare for a FIRPTA transaction is before one comes your way. Read this article in the November issue of Texas REALTOR® magazine to learn more.