What foreign and out-of-state buyers should know about taxes on a Palm Beach condo
The tax bill turns on residence and the timing of a sale
- FIRPTA withholding on the gross sale price
- 15%
- FIRPTA withholding on the gross sale price
- Base Florida homestead exemption
- $25,000
- Base Florida homestead exemption
- Save Our Homes annual assessment cap
- 3%
- Save Our Homes annual assessment cap
- 2025 tax stack on a Flagler parcel
- 20.4468 mills
- 2025 tax stack on a Flagler parcel
A foreign buyer pays no special tax on purchase but becomes a FIRPTA seller later. Under 26 U.S.C. section 1445, the buyer of the residence must withhold 15 percent of the gross sale price unless the seller obtains a withholding certificate, and the residence-based reductions never apply above $1 million. Florida's homestead rules reward the owner who makes the condominium a permanent residence by January 1.
The short answer
- FIRPTA withholding is generally 15 percent of the amount realized, with the buyer as withholding agent and the tax due by the 20th day after transfer.
- Reductions to 10 percent or zero apply only to residences at $1 million or less, so they never apply to these towers.
- Homestead requires title and permanent residence on January 1 and brings a $25,000 exemption plus up to $25,000 more on non-school levies.
- Save Our Homes caps homestead assessment growth at the lower of 3 percent or CPI; non-homestead property is capped at 10 percent.
- The property resets to just value on January 1 after any change of ownership.
The buyer withholds 15 percent when a foreign owner sells
The Foreign Investment in Real Property Tax Act makes the buyer the withholding agent when the seller is a foreign person. The buyer withholds 15 percent of the amount realized, which is the gross price. The buyer then files Form 8288 and remits the tax by the 20th day after the transfer.
The rate drops to 10 percent when the buyer will use the property as a residence and the price is between $300,000 and $1 million. It falls to zero at $300,000 or less. At Palm Beach prices, neither reduction applies.
The planning tool is the withholding certificate. A foreign seller can apply on Form 8288-B to reduce withholding to the actual tax due. The application takes planning before the contract, so it belongs early in any sale.
Homestead rewards a permanent residence established by January 1
Section 196.031 sets the terms. A person who holds title on January 1 and makes the property a permanent residence receives a $25,000 exemption from all levies except special assessments. An additional exemption of up to $25,000 applies to assessed value between $50,000 and $75,000 for non-school levies, now indexed to inflation.
Once a property is homesteaded, section 193.155 limits the annual increase in assessed value to the lower of 3 percent or the change in the consumer price index. Non-homestead property carries a 10 percent cap instead.
A sale ends the cap. The Palm Beach County Property Appraiser assesses properties at market value in the first year they receive the exemption. Any property must be reassessed at full market value in the year following a sale.
A relocating New York buyer should budget for the full millage stack
Palm Beach County's countywide operating millage is 4.5 mills, though an owner pays the full stack. Stacked rates for a West Palm Beach parcel are quoted around 20 to 21 mills. The full 2025 stack on a West Palm Beach Flagler Drive parcel, read from an actual TRIM notice, is 20.4468 mills.
The components are county 4.5330 with debt, schools 6.3210 and the city 8.1888 with debt. Water management adds 0.2301, the Children's Services Council 0.4908, the Health Care District 0.6561 and the inland navigation district 0.0270.
Location within the county shifts the total. Downtown parcels add the Downtown Development Authority levy, 0.97 mills in 2025 and 2.00 proposed for 2026. The Town of Palm Beach stack is lighter at 14.8690 mills, because the town's own rate is 2.611.
On a $5 million West Palm residence assessed near market value, the bill is about $102,000 a year before homestead. That is why establishing Florida residency, and the homestead cap, is the first conversation many relocating buyers have with their accountant.
General information, not legal or tax advice. Statutes change and the sources are dated. For every new tower with its figures and floor plans, open the index.
Questions this article answers
Do foreign buyers pay FIRPTA withholding on a Palm Beach condo?
Not when buying. A foreign buyer pays no special tax on purchase but becomes a FIRPTA seller later. The buyer of the residence must then withhold 15 percent of the gross sale price under 26 U.S.C. section 1445, unless a withholding certificate is obtained.
Who is responsible for FIRPTA withholding when a foreign owner sells a condo?
The buyer is the withholding agent. The buyer withholds 15 percent of the amount realized, which is the gross price, files Form 8288 and remits the tax by the 20th day after the transfer.
Does the reduced 10 percent FIRPTA rate apply to a Palm Beach condo?
Not at these prices. The rate drops to 10 percent only when the buyer will use the property as a residence and the price is between $300,000 and $1 million. It falls to 0 at $300,000 or less, and neither applies to these towers.
How can a foreign seller reduce FIRPTA withholding on a condo sale?
By applying for a withholding certificate on Form 8288-B, which can reduce withholding to the actual tax due. The application takes planning before the contract, so a foreign owner should start well ahead of a sale.
Who qualifies for the Florida homestead exemption on a condo?
A person who holds title on January 1 and makes the property a permanent residence. Under section 196.031, that brings a $25,000 exemption from all levies except special assessments, plus up to $25,000 more on assessed value between $50,000 and $75,000 for non-school levies.
How much can a homesteaded Florida condo's assessed value rise each year?
No more than the lower of 3 percent or the change in the consumer price index. Section 193.155, the Save Our Homes provision, sets that limit for homesteaded property. Non-homestead property is capped at 10 percent instead.
Does a Palm Beach County condo's assessed value reset after a sale?
Yes. The Palm Beach County Property Appraiser reassesses any property at full market value in the year following a sale, and the property resets to just value on January 1 after a change of ownership. A new homestead is also assessed at market value in its first year.
What is the property tax millage on a West Palm Beach Flagler Drive condo?
The full 2025 stack on a West Palm Beach Flagler Drive parcel, read from an actual TRIM notice, is 20.4468 mills. The Town of Palm Beach stack is lighter at 14.8690 mills because the town's own rate is 2.611. Palm Beach County's countywide operating millage is 4.5 mills.
How much are annual property taxes on a $5 million West Palm Beach condo?
About $102,000 a year before homestead, on a $5 million West Palm residence assessed near market value at the 2025 stack of 20.4468 mills. Downtown parcels add the Downtown Development Authority levy, 0.97 mills in 2025 and 2.00 proposed for 2026. Residency is the question to settle with an accountant.
SourcesShow
- FIRPTA withholdingInternal Revenue Service · July 21, 2026
- 26 U.S. Code section 1445: Withholding of tax on dispositions of United States real property interestsCornell Legal Information Institute · 2026
- Section 196.031, Florida Statutes: Exemption of homesteadsFlorida Legislature · 2026
- 3% and 10% capsPalm Beach County Property Appraiser · 2026
- FY 2025 tentative budget presentationPalm Beach County Office of Financial Management and Budget · July 2, 2024
- TRIM notices and millage tablesPalm Beach County Property Appraiser · 2026
