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FIRPTA for Chinese Sellers: Selling Your US Property
FIRPTA for Chinese sellers: 15% on gross sale price. On $2M Irvine home: $300K withheld — 8288-B certificate essential. US-China income treaty (1984) coordinates capital gains. No estate treaty: $60K exposure. Own Luxury Homes® 12-Point Agent Integrity Audit™.
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FIRPTA for Chinese Sellers: Selling Your US Property
15%
FIRPTA withholding on gross US sale price for Chinese sellers who are not US citizens or permanent residents
$300,000
FIRPTA withheld on a $2M Irvine or Arcadia property sale — 8288-B certificate filed at listing recovers most at closing
1984
Year the US-China income tax treaty was signed — coordinates US and Chinese capital gains on the same sale
$60K
US estate tax exemption for Chinese nationals — no US-China estate tax treaty; foreign corporation ownership essential
State laws and tax rules change. Consult a US real estate attorney for current restrictions and a cross-border tax specialist before any transaction.
Chinese sellers of US property face FIRPTA withholding on par with the largest amounts in this guide. At the prices where Chinese buyers have concentrated — $2M–$5M in Arcadia, San Marino, Beverly Hills, and Irvine — 15% FIRPTA on a $3M sale is $450,000 withheld at closing. The Form 8288-B withholding certificate, filed at listing not at contract, is the most consequential single action a Chinese seller’s agent can take. It has a 90-day processing time. File it on day one of the listing.
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FIRPTA at Chinese Buyer Price Tiers
Chinese buyers have concentrated in high-value markets. FIRPTA at those prices:
| Sale Price | 15% FIRPTA | Est. US Tax (15% on $500K gain) | Certificate Saves |
|---|---|---|---|
| $1,000,000 | $150,000 | $75,000 | $75,000 at closing |
| $2,000,000 | $300,000 | $100,000 | $200,000 at closing |
| $3,000,000 | $450,000 | $130,000 | $320,000 at closing |
| $5,000,000 | $750,000 | $200,000 | $550,000 at closing |
File Form 8288-B at listing. IRS takes 90+ days. At these price tiers, the certificate saves hundreds of thousands. Full FIRPTA guide: FIRPTA complete guide.
US-China Income Tax Treaty (1984)
The US-China income tax treaty, signed in 1984, provides coordination for US rental income and capital gains: (1) Capital gains on US property: US taxes the gain as the source country. Chinese tax on the same gain can be offset by US tax paid through the treaty’s foreign tax credit provisions. (2) Chinese capital gains tax (CGT): China levies CGT on worldwide income of Chinese tax residents. The US-China DTA provides for credit, but Chinese tax law and rules change. Consult a Chinese tax specialist for current rates and rules. (3) No estate tax treaty: the 1984 treaty does not cover estate taxes. Chinese nationals who die owning US property face the bare $60,000 non-citizen estate tax exemption. Foreign corporation ownership is the essential solution.
Ownership Structure: Foreign Corporation
The standard ownership structure for China-based buyers of US property: (1) A non-US holding company (British Virgin Islands, Cayman, Hong Kong, or Singapore entity) owns the US property. The foreign corporation’s shares are not US situs assets — eliminating US estate tax exposure. (2) Privacy: the entity name appears on title, not the individual. (3) FIRPTA on entity sale: if the entity itself sells the property, different FIRPTA rules may apply. Consult a US tax attorney on the correct FIRPTA treatment for your structure. (4) Chinese-Americans: US citizens who own US property through personal name have the full $13.61M US estate tax exemption. Foreign corporation ownership is optional for US citizens.
Ryan Brown, Principal Broker & CEO Own Luxury Homes®
"The Chinese seller in Arcadia calls me when the property goes under contract. That’s already too late for the 8288-B. 90 days. On a $2.5 million Arcadia sale, the certificate saves $280,000 at closing. The specialist who didn’t file it at listing just cost their client $280,000 in cash flow. File it day one."
Related Resources
Chinese Buyer Guides: State Restrictions — Sending Money from China — FIRPTA Guide — Find an Agent
Frequently Asked Questions
What is FIRPTA for Chinese sellers of US property?
15% withheld from gross sale price at closing. Form 8288-B certificate filed at listing reduces this to actual capital gains tax. On a $2M Irvine sale, the certificate can release $200,000+ at closing vs waiting months.
Does China also tax the gain when a Chinese citizen sells US property?
Yes, if the seller is a Chinese tax resident. The US-China income tax treaty (1984) coordinates: US tax paid is credited against Chinese CGT.
Does China have a US estate tax treaty?
No. The 1984 US-China treaty covers income taxes only, not estate taxes. Chinese nationals owning US property face the bare $60,000 non-citizen exemption. Foreign corporation ownership is the standard solution.
Should Chinese-Americans use foreign corporations to own US property?
Not necessarily — US citizens have the full ~$13.6M estate tax exemption. A Chinese-American who is a US citizen may own US property personally without the same exposure as a Chinese national.
"The introduction Own Luxury Homes® makes is to a specialist with documented closing history in your specific market — not the county, not the metro, the submarket you're actually selling or buying in. That's the standard we verify before your name goes anywhere."
— Ryan Brown, Principal Broker & CEO, Own Luxury Homes® (FL License BK3626873)