California Real Estate Withholding Video Script
Real estate withholding is a prepayment of California state income tax for sellers of California real property. It is mandatory under Revenue and Taxation Code Sections 18662 and 18668.
Withholding is required on all transfers of real property.
However, there are some exclusions and exemptions to withholding. Please refer to our FTB Real Estate Withholding Guidelines Publication and our withholding forms for more information.
The law states the buyer is required to withhold. In most circumstances they will request the real estate escrow person to do the withholding on their behalf. The real estate escrow person is required to do the following:
- Notify the buyer in writing of the withholding requirements, using the specific language provided in FTB Publication 1016.
- Provide FTB 593 Booklet containing forms 593-C and 593-E to the sellers.
- Withhold when required.
- Complete FTB Forms 593 and 593-V when withholding.
- Give one copy of FTB Form 593 to the sellers.
- Send a copy of Forms 593 and 593-V to FTB with the withholding payment by the 20th day of the month following the month escrow closes.
Please be sure to use the current year forms, or the year the transaction took place. This will insure our best customer service.
The seller has a choice when calculating the withholding amounts. The current withholding rates and percentages are further explained on our website under withholding rates.
Once there, you'll find a wealth of information. Listed are frequently asked questions along with links to our forms and publications. Checking our website frequently will give you the most up-to-date information available to help you meet your withholding requirements.