Page 17 - CTT-CA Real Estate Foreign Buyer & Seller Guide_English

California Withholding Requirements
Some states, such as California, require that certain sellers “prepay” the state taxes incurred on the gain of the sale by withholding of a percentage of the sale proceeds at closing. State law requires the buyer to withhold unless an exception applies. The buyer may be subject to penalties for failure to withhold.
The withholding requirements are complex, which is why it is important for the seller to consult with their CPA for tax advice. For more information please con- tact the State of California Franchise Tax Board.
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