| What are the Withholding Requirements on California Real Estate Transactions?
The California Franchise Tax Board states that for "transactions occurring on or after January 1, 2007, that require withholding, "a seller of California real estate may elect an alternative to withholding 3 1/3% (.0333) of the total sales price. The seller may elect an alternative withholding amount based on the maximum tax rate for individuals, corporations, or banks and financial corporations, as applied to the gain on the sale."
Furthermore, "the seller is required to certify under penalty of perjury the alternative withholding amount to the FTB. For installment sales occurring on or after January 1, 2009, the buyer is required to withhold on each installment sale payment if the sale of California real property is structured as an installment sale."
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