Taxes on Selling a House in Florida: What to Expect

Capital gains tax

You’ve likely heard the term “capital gains tax,” but what is it?

When you sell your home for more than its adjusted cost basis, the profit is known as a capital gain. To calculate it, combine your original purchase price with the cost of eligible capital improvements, then subtract that total and any qualifying selling expenses from the sale price. The amount left over is your capital gain, but whether you owe taxes on it depends on your individual circumstances.

Suppose you purchased a Florida home for $220,000 a few years back, put $35,000 into qualifying upgrades, and eventually sold it today for $390,000. Once you account for the improvements and $25,000 in selling costs, your profit comes to $110,000. Whether you owe taxes on that profit depends on factors such as how long you owned the home and whether it was your primary residence.

The good news for Florida home sellers is that while you may owe federal capital gains tax on your profit, you won’t have to pay state capital gains tax. Florida has no individual income tax, so any taxable gain from selling your home is subject to federal tax rules only.

“That’s a huge benefit,” explains Abby Nelson, a top-rated Orlando area real estate agent with more than 20 years of experience. “It just falls into the federal capital gains tax implications, but there’s no state-level capital gains tax here in Florida.”

This benefit applies even if you live out of state and own a summer or vacation home in Florida.

Federal capital gains tax

At the federal level, capital gains are classified as either “short-term” or “long-term”:

• Capital gains are considered short-term when an asset is sold within a year of its purchase. Those gains are lumped into your regular income and taxed according to your tax bracket.
• Capital gains are considered long-term when earned from the sale of an asset after at least a full year of ownership. For a home sale, those gains are taxed at a variable rate, depending on your income.

2026 short-term capital gains tax brackets

2026 long-term capital gains tax brackets

Most Florida homeowners can take advantage of the capital gains tax exclusion, a tax break for home sellers who meet certain conditions. This is a statutory exclusion on profits from the sale of your family home. The maximum amount of capital gain that can be excluded is $250,000 for single filers or $500,000 for a married couple filing jointly.

Capital gains tax exclusion example: The sale of your Florida home resulted in a gain of $300,000. A single taxpayer who qualified for the capital gains exclusion would be able to exclude $250,000 of that gain, and would only have to pay taxes on the leftover profit of $50,000.

If the same taxpayer were married, the couple would be able to exclude up to $500,000 of the gain. In this case, you would end up paying no taxes on the sale.

If you or your property are unable to check all of the IRS criteria boxes, you may still qualify for a partial exclusion of gain. This can happen if the main reason for your home sale is a change in workplace location, a health issue, or an unforeseeable event, such as a loved one’s death.

Transfer tax

Aside from capital gains tax, the sale of real estate in Florida triggers a documentary stamp tax, also known as transfer tax. This tax is calculated based on the property’s sale price and is typically paid by the seller.

The Florida documentary stamp tax rate is $0.70 per $100 of the sale price. However, in Miami-Dade County, the rate is lower, at $0.60 per $100.

For example, if you sold a $390,000 home in Florida, here are the equations you would use to estimate your documentary stamp tax:

• Statewide: $390,000 divided by 100 x $0.70 = $2,730
• Miami-Dade County: $390,000 divided by 100 x $0.60 = $2,340

If your Miami-Dade property is anything other than a single-family residence, the tax rate would be $0.60 plus a $0.45 surtax per $100. This tax ensures that the transaction is officially recorded and documented.

Property taxes

Florida’s average effective property tax rate is 0.78%. For a home with an assessed value of $390,000, that works out to roughly $3,042 in annual property taxes. But keep in mind that your actual tax bill may be higher or lower depending on the county where your property is located.

“For property taxes, if it is someone’s primary residence, then there are exemptions that one can qualify for,” says Nelson. “They can reduce their tax burden or value of about $50,000, and it also caps it from increasing at only three percent per year.”

Nelson adds that these property tax exemptions are available for active duty military and veterans, senior citizens, surviving spouses of a first responder who died in the line of duty, and more.

Property taxes are based on the property’s assessed value as of January 1 each year. County property appraisers determine the assessed value, taking applicable exemptions and assessment limits into account. Tax collectors generally mail property tax bills in October or November, and payments are due by March 31 of the following year.

The timing of your sale will determine if you owe property tax when you close the deal. If you’ve already paid for the year, you may receive a prorated refund. If you haven’t paid yet, the property tax will be prorated at closing, and you’ll only be responsible for the portion of the year that you owned the home.

Inheritance tax

Inheriting a house in Florida doesn’t automatically mean you’ll face a tax bill. The state doesn’t collect inheritance tax, but you’ll still want to review the property’s financial obligations before putting it on the market, including any unpaid taxes, remaining loan payments, or liens.

You may also benefit from a tax break when you sell an inherited home. In most cases, inherited property receives a stepped-up tax basis, meaning the IRS generally uses the home’s fair market value at the previous owner’s date of death as your starting point for calculating capital gains. This can reduce the taxable profit compared with using what the original owner paid for the property.

The timing of your sale affects your tax bill. If you sell the property for roughly what it was worth when you inherited it, your taxable capital gain may be small after eligible selling expenses and other adjustments. If the home’s value has risen significantly, you could owe federal capital gains tax on some of that increase.

»Learn more: Want to know exactly how much you’ll walk away with from your home sale? Use our Florida Closing Cost Calculator to get a personalized estimate of your selling expenses and see your potential proceeds after closing.

House-selling tax mistakes to avoid

To avoid capital gains tax surprises, Nelson advises sellers to make certain they know their ownership dates. “I’ve seen people [who] will sell their home just shy of that two-year mark, which can have big implications. If you sell on day 360 in that second year of ownership, then for capital gains reasons, you haven’t hit a full year of ownership, so it’s taxed at a higher amount.”

Nelson says another pitfall to avoid is not having sufficient records about fixes and improvements you’ve done to your property.

“Let’s just say you’re a single person and you exceed $250,000 in gains, but you’ve done a lot of work to the property. You can [increase] your basis, the amount your home is worth for tax purposes, if you have all the receipts and information that you can provide to your accountant for the work that you’ve done to the property,” Nelson says.

She provides this example: “So if you bought a house for $200,000 and sell it for $500,000, there’s a $300,000 gain. Ignoring all closing costs and things like that aside, if you put $60,000 into it to renovate the house, make sure that your accountant has that documented information. That way, it drops it back down ($500,000 − ($200,000 + $60,000) = $240,000), and you might not have any capital gains implications.”

Other selling expenses to anticipate in Florida

When selling a house in Florida, there are several additional expenses to consider beyond taxes. These costs can impact your net proceeds. Here’s what you can expect:

Title fees: These consist of title insurance and a title search, which involves verifying that the seller is the rightful owner and that there are no outstanding claims or judgments. Title insurance protects against any issues with the home’s title, such as illegal deeds, undiscovered wills, or forgeries. These fees can range between 0.5% and 1% of the sale value.

In Florida, the seller customarily pays for the owner’s title insurance policy in most counties, while the buyer typically pays for the lender’s title insurance policy if they take out a mortgage. However, local customs vary by county: buyers generally pay for the owner’s policy in Miami-Dade, Broward, Collier, and Sarasota counties. These arrangements are negotiable and can be changed in the purchase contract.

Settlement fees: Typically amounting to about 1% of the home sale, these fees include the services provided by the title company, escrow company, or attorney facilitating the transaction’s closing. This lump sum, often referred to as escrow fees, covers the closing paperwork and distributes funds to the appropriate parties. The cost is usually split between the buyer and seller.

Agent commissions: For years, real estate agent commissions have typically ranged from 3% to 6% of a home’s sale price, divided between the buyer’s and seller’s agents. Traditionally, sellers covered both agents’ fees. However, the 2024 landmark settlement by the National Association of Realtors (NAR) has shifted this dynamic. Buyers are now encouraged to negotiate fees directly with their agents.

Despite this change, many sellers still opt to cover the buyer’s agent’s fee to attract offers and expedite the sale. If you choose to cover both the buyer’s and listing agents’ commissions, expect to pay around 6% of the sale price. If you only cover the listing agent’s fee, your cost will be about 3%.

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Ways to prepare for real estate taxes

Taxes after a home sale don’t need to be a surprise or intimidating. These simple steps can help you prepare for what’s to come when selling a home in Florida:

• Know your home’s value: Use an online automated valuation model (AVM) tool like HomeLight’s free Home Value Estimator. Having a ballpark idea of what your home might be worth can help you calculate potential capital gains from the sale.
• Save the right documents: Know what tax documents you will need when purchasing or selling a home. Consult with your tax advisor about the federal and state documents required to file in Florida and any available tax breaks for your selling situation.
• Find a top agent: Working with an experienced Florida real estate agent can make selling your home a lot easier. They can walk you through the process, help you understand any taxes you might owe, and offer advice on how to get the most out of your sale.

HomeLight helps you find top-rated real estate agents in your Florida market by evaluating factors like sale-to-list-price ratios and local pricing trends, so you can maximize your profit when you sell.

Nelson shares these parting insights for Florida home sellers: “Hire a professional. That way, you’ll have the right guidance to avoid any pitfalls or issues [with] timing.”

Header Image Source: (Joshua Case / Unsplash)

Editor’s note: This post is for educational purposes only. Reach out to an advisor for professional guidance on your specific situation.