Are there sale prices where FIRPTA drops to 10% or even zero?

Current law builds two graduated reliefs into section 1445, both keyed to the amount realized and both requiring the buyer to acquire the property for use as a residence. If the amount realized does not exceed $300,000, no withholding is required. If it is more than $300,000 but not more than $1,000,000, the rate drops to 10% instead of 15%. Once the amount realized exceeds $1,000,000, neither relief applies and the full 15% is due — regardless of intended use.

These reliefs are not automatic price discounts. The IRS instructions require that the actual buyer be an individual (not an entity), and the residence standard looks to genuine personal use: the buyer or a family member must intend to use the property as a residence for at least half of the days it is used during each of the first two 12-month periods after the transfer. The exception rides on the buyer's good-faith intent, and the buyer remains the party liable if withholding turns out to have been required. A pure rental or investment purchase does not qualify.

These rules only shrink the amount withheld at closing; they do not change whether you owe US tax on the gain. You still report the disposition on your US return and reconcile the withholding there. And if your amount realized is, say, $1,200,000, you are back to 15% on the full base even though the buyer is moving in. If the deal involves seller financing or staged payments, the residence math interacts with the deferred-payment rules — that combination is covered in /guides/installment-sale-foreign-sellers.