What an ITIN is and how to apply for one if you’re buying property in California

It isn't required to buy, but it completely changes your loan terms and you'll need it if you rent the property out. What it is, what it's for and how to get it.

The ITIN (Individual Taxpayer Identification Number) is a nine-digit number the IRS issues to people who need to file taxes in the United States but don’t qualify for a Social Security number.

Let’s first clear up what it is not: it is not a work permit, it gives no immigration status and it does not replace a visa. It is purely a tax identifier.

Do I need it to buy?

Technically, no. You can acquire a property without an ITIN. But in practice it pays to have one, for three reasons:

1. Better loan terms. Several programs for foreign nationals ask for it, and with it you have access to a wider range of lenders.
2. Required if you rent. As soon as you earn rental income in the United States you have to report it, and for that you need an ITIN.
3. Building a history. It is the first step toward a U.S. credit history, something that will serve you in any future transaction.

How to apply

The application is filed with the IRS on form W-7, together with:

• A valid passport (the original, or a copy certified by the issuing authority)
• A U.S. tax return, or documentation supporting one of the exceptions
• Documentation explaining why you need the number

There are three routes: mailing it to the IRS, going to a Taxpayer Assistance Center by appointment, or applying through a Certifying Acceptance Agent (CAA). The last one is the route we recommend: the CAA certifies your documents and spares you from parting with your original passport.

How long it takes

The usual timeframe is 7 to 11 weeks, and it gets longer during tax season (January to April). If you know you are going to buy, start the application several months ahead: it is one of the things that most delays a purchase when it’s left for last.

Renewal

An ITIN that isn’t used on a tax return for three consecutive years expires. If you got yours some time ago and haven’t used it, check that it is still valid before applying for a loan.

The most common mistake

Leaving it until the house has already been found. Between the weeks the application takes and the weeks the loan takes, the seller gets tired of waiting. Apply while you search, not after.

If you are just starting the process, see the Mexican Buyer’s Guide and the mortgage financing page.

If your plan includes renting the property out, the ITIN goes from advisable to essential. Downtown San Diego is the area with the best rental profile in the county.

We help you coordinate the ITIN application with your buying process.