In California, real estate withholding is required when the total sale price of properties exceeds what amount?

In California, real estate withholding is required when the total sale price of properties exceeds $300,000. This withholding requirement is part of the state's efforts to ensure that taxes due on capital gains are collected when nonresidents sell real estate in California.

When a property is sold for this amount or more, the state mandates that a percentage of the gross sale price be withheld and remitted to the California Franchise Tax Board. The withholding serves as a prepayment of the seller’s potential state tax liability, which is particularly important in situations involving nonresident sellers, as it helps secure tax revenue for the state.

In contrast, sale prices below this threshold do not trigger the withholding requirement, allowing sellers lower than $300,000 to avoid this stipulation. Understanding these thresholds is crucial for real estate professionals and clients to ensure compliance with California tax regulations.