Do I need an ITIN to sell US property as a Canadian?

Why the sale itself creates the ITIN requirement

Under the Foreign Investment in Real Property Tax Act, the buyer's closing agent must withhold a percentage of the gross sale price whenever a foreign person sells US real estate, and a Canadian resident who is not a US citizen counts as a foreign person for this rule even if the property was never rented out. That withholding is reported to the IRS on Form 8288 and to you on Form 8288-A. Both forms ask for the seller's US taxpayer identification number, and if you do not have one, the closing can still happen but the paperwork behind it is incomplete until you get one.

An ITIN matters at two separate points in the sale. First, if you want to apply for reduced withholding before closing using Form 8288-B, the IRS will not process that application without an ITIN for every seller named on it. Second, even if you skip that step and let the standard withholding happen, you still need an ITIN the following spring to file the 1040-NR that reports the sale and claims back any withholding above your actual US tax liability.

How to apply for the ITIN before closing

You apply using Form W-7. Most W-7 applications must be attached to a completed US tax return, but a real estate sale falls under one of the exceptions that lets you apply without waiting for filing season, supported instead by a copy of the purchase and sale agreement or the executed contract naming you as seller. That is what makes it possible to have an ITIN in hand before closing rather than months afterward.

The other piece is identity verification. The IRS normally wants a certified copy of your passport, which historically meant mailing the original to the IRS or to a US consulate for weeks at a time. A Certifying Acceptance Agent (CAA) avoids that: a CAA reviews and certifies your passport in person or by video, forwards the certification with the W-7, and you keep your passport the whole time. For a cross-border sale on a deadline, working through a CAA is close to essential.

Timelines versus your closing date

ITIN processing generally takes several weeks once the IRS receives a complete application, longer if you apply during the busiest months of the year, so the practical rule is to start the moment you have an accepted offer, not once you are staring at a closing date. If the ITIN genuinely will not arrive in time, the sale is not derailed: closing proceeds, the closing agent withholds the standard percentage of the gross price, and you apply for the ITIN afterward so you can file the 1040-NR and recover any excess. What you lose by missing the window is only the chance to reduce the withholding at the closing table itself; the eventual refund is still available.

It also helps to tell your realtor and the closing attorney early that a Canadian seller is involved. Title companies see FIRPTA sales often enough to know the drill, but they cannot start an ITIN application for you, and a closing scheduled without anyone flagging the withholding rule tends to produce last-minute scrambling. The IRS does not publish a guaranteed turnaround, so treat any estimate you hear as a planning number rather than a promise, and build in slack around the closing date wherever the contract allows it.

Every owner on title needs a separate ITIN

If a property is owned jointly, each owner's share of the withholding is reported on a separate Form 8288-A, and each owner needs their own ITIN to have that share processed and, later, to file their own 1040-NR. This comes up most often with spouses who bought a US property together decades ago and never got around to obtaining an ITIN because the property was never rented. It also applies to siblings or other co-owners who inherited a US property and are now selling it. Plan for one W-7 package per name on the deed, not one per property, and expect the certifying agent to need original identification from each person, not just the person coordinating the sale.

What this does not affect

Getting an ITIN for the sale does not create an ongoing US filing obligation on its own, and it does not make you a US tax resident. It also has no bearing on your Canadian reporting: as a Canadian resident you still report the sale as a capital gain or loss in Canadian dollars, and you still claim a foreign tax credit for the US tax actually paid, coordinated through the same 1040-NR that the ITIN made possible. Our guide for Canadians owning US property covers how the US and Canadian filings fit together for a sale, and FIRPTA withholding explained walks through the withholding mechanics in more detail.

How we handle ITIN applications for a sale

We work as a Certifying Acceptance Agent so a client's passport never has to leave their hands, and we build the ITIN application, the Form 8288-B if it makes sense for the numbers, and the eventual 1040-NR into one coordinated timeline that starts the day a property goes under contract. For clients who did not learn about any of this until after closing, we still prepare the ITIN application and the return that claims back the excess withholding. Details on how we scope a cross-border sale are on our cross-border tax services page.

Source: IRS — Individual Taxpayer Identification Number.