Can an Undocumented Immigrant Legally Sell a Home in Michigan?

One of the most common questions is whether an undocumented immigrant can legally sell a home. The answer is yes! Under U.S. law, immigration status does not impact property ownership or the ability to sell a home. If your name is on the property deed, you have full legal rights to sell the home.

Do You Need a Social Security Number to Sell Your Home?

No, a Social Security Number (SSN) is not required to sell a home. However, if you don’t have one, you will need an Individual Taxpayer Identification Number (ITIN) for tax purposes.

Steps to Selling a Home as an Undocumented Immigrant

Hire a real estate agent – You can legally work with a licensed Michigan real estate agent to list and sell your property.
List your home on the market – Follow standard home-selling procedures, including setting a price, staging the home, and attracting buyers.
Close the sale – Once a buyer is found, you can sign all legal documents and receive your payment, even if you are outside the U.S.

Tax Implications for Undocumented Immigrants Selling a Home

One of the biggest challenges undocumented immigrants face when selling a home is dealing with tax obligations. Since the IRS classifies undocumented immigrants as foreign sellers, there are additional tax rules to be aware of.

Capital Gains Taxes for Undocumented Home Sellers

When you sell a home for more than you originally paid for it, the profit is subject to capital gains tax. The rules differ based on residency status:

U.S. residents can avoid capital gains tax if they have lived in the home for at least 2 out of the last 5 years.
Non-residents (including undocumented immigrants) do not qualify for this exemption.

Types of Capital Gains Taxes:

Short-Term Capital Gains Tax (if the home was owned for less than a year) – Taxed as regular income.
Long-Term Capital Gains Tax (if owned for more than a year) – Taxed at 15-20% depending on income.

Foreign Investment in Real Property Tax Act (FIRPTA) Withholding

Under the Foreign Investment in Real Property Tax Act (FIRPTA), buyers must withhold 15% of the sale price at closing if the seller is considered a foreign person.

Example FIRPTA Withholding Calculation:

Home Sale Price: $300,000
15% FIRPTA Withholding: $45,000

This means that the buyer must set aside $45,000 for the IRS at closing.

How to Reduce or Avoid FIRPTA Withholding

If you have an ITIN and file U.S. tax returns, you may qualify for an exemption. You will need to file IRS Form 8288-B to request a refund or reduction of the withholding amount. It's important to consult a tax professional or CPA to ensure you are following the correct procedures.

How to Sell Your Home If You’ve Been Deported

If you have been deported but still own a home in Michigan, you can still sell it, but extra steps are required.

Step 1: Assign a Power of Attorney

The best way to sell your home from outside the U.S. is to assign a Power of Attorney (POA) to a trusted person in Michigan. This allows them to handle the sale, sign documents, and receive payments on your behalf.

How to Get a Power of Attorney in Mexico

Visit a Notario Público (a special legal notary in Mexico)
Have the Power of Attorney notarized
Send it to Michigan for legal validation

Step 2: Listing and Selling the Home

Once your Power of Attorney is in place:

Your representative can work with a real estate agent to list and sell the property.
You should stay in touch with the real estate agent and title company to monitor the progress.

Step 3: Receiving Your Money in Mexico

After the home is sold, how do you receive your payment if you're in Mexico?

If you have a U.S. bank account, funds can be directly deposited.
If you do not have a U.S. account, you can request a wire transfer to a Mexican bank.
Some sellers use services like PayPal, Wise (formerly TransferWise), or Western Union for smaller transfers.

Important: Large wire transfers to Mexico may require reporting to Mexican tax authorities.

Risks and Challenges of Selling a Home as an Undocumented Immigrant

There are additional risks undocumented homeowners must consider when selling their property.

1. Family Disputes and Inheritance Issues

If you pass away without a will, your home may go into probate court, and your family may struggle to claim it.

Solution: Create a will or use a Lady Bird Deed to legally transfer ownership.

2. Title and Ownership Issues

If your home is only under your name, proving ownership from outside the U.S. can be difficult.

Solution: Keep digital copies of all legal documents, including property deeds and mortgage statements.

3. U.S. Bank Account Closures

Many U.S. banks close accounts for non-residents, making it harder to receive money from a sale.

Solution: Set up a U.S. bank account with online access before leaving the USA

Key Takeaways: Selling a Home as an Undocumented Immigrant

If you are an undocumented immigrant selling a home in Michigan, here’s what you need to do:

✅ Know your tax obligations – Plan for capital gains taxes and FIRPTA withholdings

✅ Plan ahead if selling from another country – Assign a Power of Attorney to handle the sale

✅ Set up a U.S. bank account before leaving – Ensure you can receive wire transfers internationally

✅ Protect your property – Create a will or Lady Bird Deed to avoid legal disputes.

Even though selling a home as an undocumented immigrant involves extra challenges, it is completely legal and can be done smoothly with the right preparation.

Need Help Selling Your Home in Michigan?

If you need professional real estate guidance, feel free to leave a comment or reach out for expert help. Selling your home shouldn’t be complicated—get the support you need to protect your investment and sell your home the right way.

📌 Have questions? Drop them in the comments below!