Withholding Tax on Sale or Transfer of Real Property and Associated Tangible Personal Property by Nonresidents

  1. Law
  2. Georgia Code
  3. Revenue and Taxation
  4. Income Taxes
  5. Current Income Tax Payment
  6. Withholding Tax on Sale or Transfer of Real Property and Associated Tangible Personal Property by Nonresidents

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  1. As used in this Code section, the term "nonresident of Georgia" shall include individuals, trusts, partnerships, corporations, and unincorporated organizations.Any seller or transferor who meets all of the following conditions and who provides the buyer or transferee with an affidavit signed under oath swearing or affirming that the following conditions are met will be deemed a resident for purposes of this Code section:
    1. The seller or transferor has filed Georgia income tax returns or appropriate extensions have been received for the two income tax years immediately preceding the year of sale;
    2. The seller or transferor is in business in Georgia and will continue substantially the same business in Georgia after the sale or the seller or transferor has real property remaining in the state at the time of closing of equal or greater value than the withholding tax liability as measured by the 100 percent property tax assessment of such remaining property;
    3. The seller or transferor will report the sale on a Georgia income tax return for the current year and file it by its due date; and
    4. If the seller or transferor is a corporation or limited partnership, it is registered to do business in Georgia.
    1. Except as otherwise provided in this Code section, in the case of any sale or transfer of real property and related tangible personal property located in Georgia by a nonresident of Georgia, the buyer or transferee shall be required to withhold and remit to the commissioner on forms provided by the commissioner a withholding tax equal to 3 percent of the purchase price or consideration paid for the sale or transfer; provided, however, that if the amount required to be withheld pursuant to this subsection exceeds the net proceeds payable to the seller or transferor, the buyer or transferee shall withhold and pay over to the commissioner only the net proceeds otherwise payable to the seller or transferor.Any buyer or transferee who fails to withhold such amount shall be personally liable for the amount of such tax.
    2. The liability imposed by this subsection shall be paid upon notice and demand by the commissioner or the commissioner's delegate and shall be assessed and collected in the same manner as all other withholding taxes imposed by this article.
    3. The person or entity identified as the seller on the settlement statement shall be considered the seller for all purposes regarding this Code section, including, but not limited to, executing and delivering to the buyer or transferee all forms or other documents incident to determining the appropriate amount of tax to be withheld or the appropriate amount exempt from withholding requirements.
  3. If the seller or transferor determines that the amount required to be withheld pursuant to paragraph (1) of subsection (b) of this Code section will result in excess withholding on any gain required to be recognized from the sale, the seller or transferor may provide the buyer or transferee with an affidavit signed under oath swearing or affirming to the amount of the gain required to be recognized from the sale, and the buyer or transferee shall withhold 3 percent of the amount of the gain required to be recognized, if any, stated in the affidavit rather than as provided in paragraph (1) of subsection (b) of this Code section.If, however, the amount required to be withheld pursuant to this subsection exceeds the net proceeds payable to the seller or transferor, the buyer or transferee shall withhold and pay over to the commissioner only the net proceeds otherwise payable to the seller or transferor.
  4. Subsection (b) of this Code section shall not apply where:
    1. The real property being sold or transferred is a principal residence of the seller or transferor within the meaning of Section 1034 of the Internal Revenue Code;
    2. The seller or transferor is a mortgagor conveying the mortgaged property to a mortgagee in foreclosure or in a transfer in lieu of foreclosure with no additional consideration; or
    3. The transferor or transferee is an agency or authority of the United States of America, an agency or authority of the State of Georgia, the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, or the Government National Mortgage Association, or a private mortgage insurance company.

      The commissioner may by regulation set a purchase price amount below which no withholding is required.

    1. Unless otherwise provided, if the seller or transferor is a partnership or Subchapter "S" corporation or other unincorporated organization which certifies to the buyer or transferee that a composite return is being filed on behalf of the nonresident partners, shareholders, or members and that the partnership, Subchapter "S" corporation, or unincorporated organization remits the tax on the gain on behalf of the nonresident partners, shareholders, or members, the buyer or transferee shall not be required to withhold as provided in this Code section.Any nonresident partner, shareholder, or member who falsely certifies that a composite return is being filed on behalf of such partner, shareholder, or member shall be liable for a penalty in the amount of $500.00 or 10 percent of the amount required to be withheld, whichever is greater.
    2. The penalty imposed by this subsection shall be paid upon notice and demand by the commissioner or the commissioner's delegate and shall be assessed and collected in the same manner as the withholding tax imposed by this article.
  6. Every buyer or transferee of real property located in Georgia who is required to deduct and withhold the withholding tax imposed by subsection (b) of this Code section shall file the required return and remit payment to the department on or before the last day of the calendar month following the calendar month within which the sale or transfer giving rise to the withholding tax occurred.

(Code 1981, §48-7-128, enacted by Ga. L. 1993, p. 768, § 2; Ga. L. 2011, p. 674, § 2-1/HB 117.)

Code Commission notes.

- Pursuant to Code Section 28-9-5, in 1993, the Code Section 48-7-128 enacted by Ga. L. 1993, p. 597, § 3, was redesignated as Code Section 48-7-129, since Ga. L. 1993, p. 768, § 2, also enacted a Code Section 48-7-128.

Editor's notes.

- Ga. L. 1993, p. 768, § 3, not codified by the General Assembly, makes this Code section applicable with respect to any sale or transfer occurring on or after January 1, 1994.

Administrative Rules and Regulations.

- Returns and collections, Official Compilation of the Rules and Regulations of the State of Georgia, Department of Revenue, Income Tax Division, Chapter 560-7-8.

Law reviews.

- For note on the 1993 enactment of this Code section, see 10 Georgia St. U.L. Rev. 218 (1993).


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