FIRPTA on 30A — What Foreign Sellers and Buyers Need to Know

If a foreign person — anyone who is not a U.S. citizen or U.S. tax resident — sells a 30A or Walton County property, federal law requires the buyer (through the title company) to withhold up to 15% of the gross sales price and remit it to the IRS at closing. This is FIRPTA: the Foreign Investment in Real Property Tax Act. On a $2M Rosemary Beach or Alys Beach sale, that's $300,000 wired straight to the IRS on closing day unless a reduced rate or exemption applies.

At AquaRK Title Services, we handle FIRPTA withholding on 30A and Florida Panhandle closings every week — Canadian snowbirds in WaterSound, European investors in Alys Beach, and offshore LLCs in Rosemary Beach. Here is how FIRPTA works, when withholding is reduced, and what every buyer and seller on 30A needs to know.

1. Who counts as a "foreign person" under FIRPTA?

FIRPTA applies if the seller is:

• A nonresident alien individual (no green card, fails the IRS substantial presence test)
• A foreign corporation, foreign partnership, or foreign trust or estate
• A U.S. LLC owned 100% by foreign persons that is treated as a disregarded entity for tax purposes

A U.S.-formed LLC with U.S. members is generally not a foreign seller for FIRPTA purposes — even if the property is a vacation rental — because the entity itself is a domestic taxpayer. This is one reason many Canadian and European 30A investors title their properties through a U.S. LLC with at least one U.S. member.

2. The three FIRPTA withholding rates on 30A closings

The withholding rate depends on the buyer's intended use and the sales price:

• 15% of the gross sales price — default rate on every transaction with a foreign seller
• 10% of the gross sales price — sales price between $300,001 and $1,000,000 and the buyer signs a sworn statement that they will use the property as a personal residence at least 50% of the days it is used during each of the first two 12-month periods after closing
• 0% — sales price of $300,000 or less and the buyer signs the same residence affidavit

Because most 30A purchases run well above $1M, the 15% rate is the norm. Withholding is on the gross price — not on the seller's gain — so a foreign seller who breaks even or loses money on the sale still has the full 15% wired to the IRS until they file a U.S. tax return to recover it.

3. Reducing FIRPTA withholding with IRS Form 8288-B

A foreign seller can apply for a withholding certificate using IRS Form 8288-B before closing. The IRS calculates what the seller's actual federal tax liability will be and authorizes the title company to withhold only that amount, releasing the rest to the seller at closing.

Practical reality on 30A: the IRS currently takes 90–120 days to issue a withholding certificate. Most 30A closings cannot wait that long. The workable solution is to file Form 8288-B before closing anyway — once filed, the title company can hold the full 15% in escrow rather than remitting it to the IRS, and release it to the seller as soon as the certificate arrives. AquaRK Title Services arranges this escrow hold on every applicable 30A closing.

4. What the buyer is responsible for under FIRPTA

FIRPTA legally puts the withholding obligation on the buyer, not the seller. If the buyer fails to withhold and the seller never pays the tax, the IRS comes after the buyer for the full 15% plus interest and penalties. In practice, the title company handles withholding on the buyer's behalf — but the legal liability stays with the buyer.

This is why every 30A buyer should insist on a title company that has handled FIRPTA before. Out-of-area firms occasionally miss the foreign-seller indicator on a foreign-owned LLC or fail to remit Form 8288 within 20 days of closing, leaving the buyer exposed to IRS penalties. See our guide on title company vs. real estate attorney in Florida for why attorney-led closings reduce this risk.

5. Florida documentary stamps and FIRPTA stack on 30A sales

FIRPTA does not replace any Florida tax — it is in addition to:

• Florida deed documentary stamps: $0.70 per $100 of price (seller customarily pays in Walton County)
• Federal capital gains tax filed by the seller after closing
• Withholding for state income tax: none — Florida has no state income tax, which is one reason 30A is attractive to foreign investors

On a $2.5M WaterColor sale by a Canadian seller, that's $17,500 in Florida deed stamps + $375,000 in FIRPTA withholding wired to the IRS at closing — over $390,000 in tax-and-withholding line items the seller sees on the closing disclosure.

6. How AquaRK handles FIRPTA on every 30A closing

Our standard FIRPTA workflow on a 30A closing with a foreign seller:

• Confirm seller status with a signed FIRPTA affidavit during file-opening
• If the seller claims a U.S. LLC exemption, verify the entity's federal tax classification before relying on it
• Calculate the correct 0%, 10%, or 15% rate based on price and buyer's intended use
• If a withholding certificate is being pursued, escrow the 15% rather than remit it
• File IRS Forms 8288 and 8288-A within 20 days of closing and remit withheld funds
• Provide the seller with stamped copies of 8288-A so they can claim the credit on their U.S. return

Foreign seller or buying from one on 30A? Get this right.

FIRPTA is one of the easiest closings to get wrong and one of the most expensive when it goes wrong. AquaRK Title Services has handled foreign-seller closings throughout the 30A corridor and the Florida Panhandle since 2006 under attorney supervision. Get a written quote and a FIRPTA review at aquarktitle.com or call (850) 650-9737.