Georgia Withholding Tax

The sale of real estate by a non-resident of Georgia may trigger a withholding tax based on either the sales price or the amount of the Seller's gain. Nonresidents include individuals, trusts, partnerships, corporations, limited liability companies, limited liability partnerships, and unincorporated organizations.

Withholding Rate
The rate of withholding is three (3%) percent of either–
  • the sales price; or
  • the seller's gain.*

*In order to apply the withholding to the gain, the seller must complete Georgia Department of Revenue form IT-AFF2 (Affidavit of Seller's Gain) attesting to the amount of the taxable gain.

Exemptions to Withholding

The are exemptions to the withholding requirement. No withholding is required—
  • If the property qualifies as a principal residence under the Internal Revenue Code, the exemption from withholding applies for the gain that is excluded from Federal AGI under the Internal Revenue Code.
  • In transactions where the purchase price is less than $20,000.
  • If the purchase price exceeds $20,000, the tax liability is less than $600, and the seller signs an affidavit certifying the gain, the buyer will not be required to withhold.
  • If the seller is a mortgagor conveying the mortgaged property to a mortgagee in a foreclosure or in a transfer in lieu of foreclosure with no additional consideration.
  • If the seller or buyer is an agency of the United States or the State of Georgia, or a private mortgage insurance company.
  • If the seller is an entity which files a composite return and remits the tax on the gain on behalf of its members, then the buyer is not required to withhold.
  • Where the seller or buyer is the Federal National Mortgage Association, the Government National Mortgage Association, or the Federal Home Loan Mortgage Corporation.
  • If the Seller is a tax exempt organization and the income from the sale is not subject to federal or state income tax.
  • If the seller is an insurance company which pays tax on its premium income to Georgia.
  • If the transaction is a like kind exchange and all of the income from the sale is not subject to federal or state income tax.
Questions? Speak with a Real Estate Lawyer
CHRIS PAHL
Attorney at Law
Georgia Title & Escrow Co LLC
3575 Piedmont Road
Building 15, Piedmont Center
Suite 120
Atlanta, GA 30305
678.448.4148 Tel

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