Many people work in the U.S. their whole lives and then want to retire near family in their home country. The house here is old, empty, and hard to manage from far away. Selling makes sense, but a few things need planning before you board the plane.
Taxes when you sell
Capital gains exclusion for your main home
If you owned and lived in the house as your main home for at least 2 of the 5 years before the sale, up to $250,000 of gain is tax-free for one person, or up to $500,000 for a married couple filing jointly. Only gain above that is taxed.
Escrow may withhold 3⅓% for California tax
When you sell a California property, escrow typically withholds 3⅓% of the price for state tax unless you qualify for an exemption, such as the principal-residence exemption above. You sign a certification of exemption (Form 593) in escrow.
U.S. citizens and green card holders
FIRPTA withholding applies when the seller is a non-resident foreigner. If you are a U.S. citizen or permanent resident, it generally does not apply.
Every family is different. Ask a CPA before you sell, especially if the house was rented for a while or if you receive SSI or Medi-Cal (sale proceeds can affect those programs).
Prepare before you leave
- Green card: staying outside the U.S. for long periods can affect permanent resident status. Ask an immigration attorney about a re-entry permit before you go
- U.S. bank account: keep one to receive the sale proceeds, then transfer abroad under your banks' rules
- Tax filing: U.S. citizens and residents still file U.S. taxes while living abroad; foreign accounts over $10,000 may require an FBAR
- Power of attorney: if you want to leave first and sell later, give a trusted person in the U.S. a power of attorney to sell. Ask escrow which forms are accepted
Signing documents from abroad
If you have already left the country, you can still sell:
- Sign at a U.S. embassy or consulate (notary services for U.S. documents, appointment required) and send the originals to escrow
- Or use a power of attorney you set up before leaving
Sell, then stay until your flight
We can close escrow first and let you stay a short time afterward, written into the contract. That way the money is in your account before you buy tickets, and you do not need to move to a hotel.
Belongings and family altars
The family takes what it needs and moves any altar or heirlooms on its own schedule. Leave the rest and we clear it. Items in good condition can be donated to a charity or place of worship.
Questions
Can the sale proceeds be sent directly overseas?
Escrow usually wires proceeds to a U.S. bank account in the seller's name. You then transfer abroad under the banks' rules. Ask your bank about limits and paperwork first.
I am already abroad. Can my child in the U.S. sign for me?
Only with a valid power of attorney that the escrow and title companies accept. Call us and we will connect you with an escrow officer who can walk you through it.
Will selling make me lose Medicare?
Selling does not affect Medicare. But income- and asset-based programs such as SSI or Medi-Cal may be affected when you receive the proceeds. Check with the program office or a CPA first.