California Form 593 Real Estate Withholding Guide for Home Sellers

Last updated November 13, 2026. Reviewed by the Cash Home Buyers CA team. Figures come from the California Franchise Tax Board’s 2026 instructions for Form 593; sources are listed at the end. This is general information, not tax advice.

When you sell California real estate, escrow may have to withhold California income tax from your proceeds, unless you certify an exemption on Form 593 before the sale closes. The Franchise Tax Board lists exemptions that include a principal residence, a sales price of $100,000 or less, a loss or zero gain, and property in foreclosure.

This guide explains how Form 593 works and how to sell a house in California without surprises at closing.

Form 593 at a glance

Who has to withhold on a California home sale?

The FTB says the remitter, meaning the party who withholds, reports the amount withheld on Form 593. The seller or transferor completes the exemption certifications or the gain computation and gives the form to escrow before closing, and escrow sends the withholding and the form to the FTB. For an installment sale, the buyer is responsible for withholding on payments made after escrow closes unless the FTB approves an elect-out method.

If no exemption applies, the withholding is a prepayment of your California tax on the sale, not an extra tax. The FTB notes that sellers still have to file a California return, and penalties can apply if you do not file or the withholding does not cover the tax you owe.

Withholding estimate calculator

Compare the two methods on a sale. Enter your own numbers. Your own Form 593 controls.

Which sellers are exempt from withholding?

The FTB instructions list several exemptions. The most common for homeowners are these.

• Principal residence: you owned and lived in the home as your main home for at least two of the five years before the sale, under IRC section 121. If a decedent’s estate or trust sells, the decedent’s use counts.
• Sales price of $100,000 or less: withholding is not required.
• Loss or zero gain: your sale price is at or below your adjusted basis, and you complete the computation on the form to certify it.
• Property in foreclosure: listed by the FTB among the general exemptions.

See our capital gains guide for how the home sale exclusion works.

How to sell a house in California and handle Form 593

1. Check your exemption. Decide whether the principal residence, loss or another exemption applies.
2. Get Form 593 from escrow or the FTB. Complete the certifications and sign the perjury statement.
3. Give it to escrow before closing. The FTB says an exempt seller sends it to the escrow person before the close of the transaction.
4. If withholding applies, compare the 3 1/3 percent and gain methods with your tax adviser.
5. File your California return. Withholding is a prepayment, and the sale still goes on your return.

See how we buy houses across California, or call (424) 435-2326.

Form 593 FAQ

What is the California real estate withholding rate?

The general rate is 3 1/3 percent of the sales price, or an alternative calculation of the seller’s tax rate times estimated gain.

Do I need Form 593 if I am selling my main home?

Escrow will ask for it. A principal residence is an exemption you certify on the form.

When is Form 593 due?

An exempt seller sends it to escrow before closing; the remitter sends it to the FTB by the 20th of the month after escrow closes.

Is withholding an extra tax?

No. It is a prepayment toward your California tax on the sale.

Sources

• California Franchise Tax Board: 2026 Instructions for Form 593

This guide is general information, not tax advice. Confirm your situation with a tax professional or the Franchise Tax Board.