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Mexicans Selling Their US Property: FIRPTA and Complete Tax Guide
Mexicans selling US property: 15% FIRPTA withheld at closing. Withholding certificate (Form 8288-B) filed 6-8 weeks before reduces to actual liability. US-Mexico income treaty prevents double taxation; foreign tax credit in Mexico. Own Luxury Homes® International Buyer Verification Standard™ Mexican seller specialists.
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Mexicans Selling Their US Property: FIRPTA and Complete Tax Guide
15%
FIRPTA withholding rate on gross sale price for Mexican sellers
6-8 Weeks
Apply for withholding certificate before closing to reduce the 15%
Treaty
US-Mexico treaty prevents double taxation; foreign tax credit reduces SAT liability
SAT Report
Inbound USD proceeds repatriated to Mexico may trigger SAT bank reporting
The mechanics of selling US property as a Mexican national are similar to other nationalities: FIRPTA withholding, a US tax return, and repatriation of proceeds. The US-Mexico treaty is particularly helpful because it directly reduces the Mexican tax burden on the same gain.
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FIRPTA Withholding for Mexican Sellers
When a Mexican national sells US property, the buyer must withhold 15% of the gross sale price and remit it to the IRS within 20 days of closing. On a $400,000 sale that is $60,000 withheld. The withholding certificate process (Form 8288-B, filed 6-8 weeks before closing) can reduce the withheld amount to match actual tax liability. See: FIRPTA for Mexican Sellers: Complete Guide.
The Owner-Occupancy Exception
If the sale price is under $300,000 and the buyer will use the property as a primary or secondary residence, FIRPTA withholding may not apply. Between $300,000 and $1,000,000, the withholding rate drops to 10% with buyer occupancy. Above $1,000,000, full 15% always applies.
US Capital Gains Tax and the US-Mexico Treaty
Mexican sellers of US property pay US capital gains tax on the net gain. Long-term gains (property held more than 12 months) are taxed at 0%, 15%, or 20% depending on total US income in the year of sale. Most Mexican non-resident sellers pay 15% on long-term gains. The US-Mexico income tax treaty prevents double taxation: the US capital gains tax paid gives rise to a foreign tax credit in Mexico when reporting the same gain to SAT. SAT taxes capital gains from foreign property sales; the treaty credit reduces or eliminates the Mexican tax layer.
Repatriating Sale Proceeds to Mexico
After closing, Mexican sellers receive USD proceeds (net of withholding, closing costs, and commissions). Returning funds to Mexico: (1) Wire USD from US closing to a US bank account in the seller's name. (2) Convert USD to MXN through a bank or specialist currency service. (3) Wire MXN to a Mexican bank account. (4) SAT reporting: large inbound transfers from abroad may trigger bank reporting to SAT. Document the real estate sale proceeds clearly. (5) File Form 1040NR in the US after year-end to reconcile US tax. See: Mexico to USA Money Transfer Guide.
Ryan Brown, Principal Broker & CEO — Own Luxury Homes®
“The Mexican seller who plans the withholding certificate 6 weeks in advance leaves the closing with the proceeds they expected. The one who finds out about FIRPTA at the closing table leaves with 15% tied up at the IRS. Filing Form 1040NR gets it back, but that takes months. I start the conversation the moment a Mexican client mentions they might sell.”
Own Luxury Homes® — Mexican buyer specialists in every major US market. International Buyer Verification Standard™. No dual agency. Contact us now ›
Frequently Asked Questions
How much FIRPTA is withheld when a Mexican sells US property?
15% of the gross sale price is withheld at closing. A withholding certificate reduces this to the actual tax liability if applied for 6-8 weeks before closing.
Does Mexico tax the same gain that the US taxes when a Mexican sells US property?
Yes, but the US-Mexico income tax treaty provides a foreign tax credit mechanism that prevents paying full tax in both countries on the same gain.
How does a Mexican seller get proceeds back to Mexico?
Wire USD from US closing to US account, convert to MXN, wire to Mexico. Document the proceeds as real estate sale funds. Large inbound transfers to Mexican banks may be reported to SAT.
"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)