Florida has no personal income tax, so there is no Florida capital gains tax on real estate: a Florida investor who sells a rental or commercial building owes only federal tax on the gain. That federal bill is still large, often about a quarter of the profit once depreciation recapture and the 3.8% surtax are counted, and a 1031 exchange Florida investors complete on time defers all of it. What an exchange cannot defer is Florida's documentary stamp tax on the deed, which runs 70 cents per $100 of price in most counties.
Reviewed by Jon Hilley, CEO & Founder of 1031 Specialists. Last reviewed September 29, 2026.
| State tax on real estate gains | None. Florida does not impose a personal income tax. |
|---|---|
| Long-term capital gains treatment | Federal only: 0/15/20%, up to 25% on depreciation recapture, plus 3.8% NIIT |
| Nonresident withholding at closing | No state withholding. Foreign sellers face federal FIRPTA withholding of 15%. |
| Withholding form | None at the state level (federal Form 8288-B certificate for FIRPTA relief) |
| Transfer or conveyance tax (a 1031 does not defer it) | Documentary stamp tax on deeds: $0.70 per $100 ($0.60 in Miami-Dade, plus a $0.45 surtax on property other than single-family homes) |
| Clawback on out-of-state replacement property | None from Florida. Gain deferred from a prior state (for example California) can still follow you. |
| Conforms to Section 1031 | No state income tax, so there is nothing to conform; the federal rules alone apply |
| Property tax note | Non-homestead assessments are capped at 10% a year, then reset to market value the year after a purchase |
Table of contents
- How much is capital gains tax on real estate in Florida?
- Florida tax on a $300,000 gain: worked example
- Does Florida withhold tax from nonresident sellers?
- Florida documentary stamp tax and other closing taxes
- Conformity and clawback: what follows you into Florida
- Florida homestead, second homes and investment property
- Moving into or out of Florida
- Where Florida 1031 exchanges happen
- Federal 1031 rules in brief
- Common Florida 1031 exchange mistakes
- Start your Florida exchange with 1031 Specialists
- Frequently asked questions
- Sources
How much is capital gains tax on real estate in Florida?
Zero at the state level. The Florida Department of Revenue states it plainly: Florida does not impose a personal income tax, so individuals have no Florida return to file. That covers residents and nonresidents, and it covers every kind of gain, whether the property was a condo in Tampa, a strip center in Jacksonville or raw land in Ocala.
The federal tax on a Florida sale is where the money goes:
- Long-term capital gains at 0%, 15% or 20%. For 2026 the 20% rate starts above $545,500 of taxable income for single filers and $613,700 for joint filers.
- Unrecaptured Section 1250 gain, the depreciation you claimed or could have claimed, taxed at up to 25%.
- Net investment income tax of 3.8% once modified AGI passes $200,000 single or $250,000 joint.
Two Florida wrinkles are worth knowing. First, Florida-based corporations do pay Florida corporate income tax, so a C corporation selling property is in a different position from an individual, an LLC taxed as a partnership or a trust. Second, there is no county or city income tax anywhere in the state. The only state-level costs tied to a sale are the transaction taxes covered below.
If you are weighing whether to pay the tax or exchange, our capital gains vs. 1031 exchange comparison lays out the long-run math.
Florida tax on a $300,000 gain: worked example
Assumptions: a $300,000 long-term gain on a Florida investment property, $100,000 of which is unrecaptured §1250 depreciation, a married couple filing jointly who are already in the top federal bracket. Because Florida has no income tax, the state line is $0 and the whole bill is federal.
| Unrecaptured §1250 gain: 25% on $100,000 | $25,000 |
|---|---|
| Long-term capital gain: 20% on $200,000 | $40,000 |
| Net investment income tax: 3.8% on $300,000 | $11,400 |
| Federal subtotal | $76,400 |
| Florida income tax on the gain | $0 |
| Total deferred by a full 1031 exchange | $76,400 |
A full exchange keeps that $76,400 working in the next property instead of going to the IRS. The largest single piece is often the recapture line, so run your own numbers through the depreciation recapture calculator before you list. Nonresidents selling Florida property face the same federal lines, plus whatever their home state charges on the gain.
Does Florida withhold tax from nonresident sellers?
No. Florida has no state withholding on real estate closings, for any seller. A New Yorker selling a Naples condo or a Georgian selling a Panama City rental will not see a state line on the settlement statement.
Two withholding regimes can still reach a Florida sale:
- Federal FIRPTA. When the seller is a foreign person, the buyer generally must withhold 15% of the amount realized and send it to the IRS. A foreign seller doing an exchange can apply on Form 8288-B for a withholding certificate that reduces or eliminates the withholding, but the IRS generally takes up to 90 days to process a complete application, so the request has to be filed well before closing. Our guide to foreigners selling US property under FIRPTA covers the steps.
- Your home state. If you live in a state with an income tax, that state usually taxes your worldwide gain, Florida property included. Florida will not collect it at the table, but your home state expects it on your return unless you exchange.
Florida documentary stamp tax and other closing taxes
Florida makes up for its lack of an income tax partly through documentary stamp taxes, and these are due in an exchange just as in any sale. A 1031 defers income tax only.
- Deeds: $0.70 per $100 of consideration, or portion of $100, in 66 counties. On a $600,000 relinquished property that is $4,200.
- Miami-Dade: $0.60 per $100 on single-family residences, and $0.60 plus a $0.45 surtax (a combined $1.05 per $100) on everything else, including condos held as rentals, apartments and commercial buildings. A $2 million Miami-Dade apartment building carries $21,000 in deed stamps.
- Notes and mortgages on the replacement property: documentary stamp tax of $0.35 per $100 of the loan, plus the nonrecurring intangible tax of 2 mills (0.2%) on obligations secured by Florida real estate. A $1 million replacement loan costs about $3,500 plus $2,000.
By statute any party to the transaction can be liable for doc stamps, so the contract and local custom decide who pays. In most of Florida the seller pays the deed stamps; in some South Florida counties the buyer customarily does. Budget both the deed stamps on your sale and the note stamps and intangible tax on your new loan when you size the exchange, since the loan taxes come out of closing costs on the replacement side.
Conformity and clawback: what follows you into Florida
Because Florida has no personal income tax, it has no Section 1031 conformity question and no clawback rule. If you exchange Florida property into Texas or Arizona, Florida has no claim on the deferred gain.
The reverse is not true. Several states track gain that was deferred when property left them. California is the best-known example: if you exchanged California property into Florida real estate, California expects an annual information return, Form FTB 3840, and taxes the California portion of the gain when you eventually sell the Florida property in a taxable sale. Oregon, Montana and Massachusetts have their own versions. Moving to Florida does not wipe that out, so keep the old exchange records. See our California 1031 exchange page for how that tracking works.
Florida homestead, second homes and investment property
Florida's property tax system treats homesteads and everything else very differently, and it shapes both what qualifies for an exchange and what the replacement property will really cost to hold.
- A homestead does not qualify. Your primary residence is not held for investment. If you move out and rent it, the property can become exchange-eligible over time, and a sale may combine the Section 121 exclusion with a 1031. Check whether your property qualifies before you list.
- Second homes are a gray area. A Destin or Keys vacation home you use personally is not automatically investment property. The IRS safe harbor for dwelling units looks for rental at fair market rent for at least 14 days a year and personal use capped at the greater of 14 days or 10% of rented days, in each of the two years around the exchange.
- Replacement property gets reassessed. Non-homestead property benefits from a 10% annual cap on assessment increases (for non-school millage), but it is reassessed at full market value in the year after a sale. A rental you buy in 2026 will likely carry a higher tax bill in 2027 than the seller paid, so underwrite with the reset figure.
Insurance matters as well: wind and flood premiums on coastal replacement property can move a deal's cash flow more than the price does, so get quotes during the 45-day window, not after.
Moving into or out of Florida
Moving in. Florida is the most common destination for investors leaving high-tax states. Becoming a Florida resident before a taxable sale can eliminate state tax on future gains, but real estate is taxed where it sits: selling a rental in New York or New Jersey after you move still triggers that state's nonresident tax and withholding. Many investors exchange out-of-state property into Florida to consolidate holdings, which defers both the federal and the origin state's tax. See our New York page for its withholding rules and the similar regime in New Jersey.
Moving out. If you exchange Florida property into another state, there is no Florida tax to track. The new state may tax the eventual sale of the replacement property in full, including gain that built up in Florida, if you become a resident there. Investors moving to Georgia should model that before choosing where to live.
Where Florida 1031 exchanges happen
South Florida carries the most dollar volume: multifamily, retail and industrial along the I-95 corridor, and a deep condo and single-family rental market that draws out-of-state and foreign buyers. Read more on a 1031 exchange in Miami and Fort Lauderdale. Central Florida, led by Orlando, is a steady exchange market for short-term rentals near the parks, build-to-rent communities and logistics space along I-4; see our page on a 1031 exchange in Orlando.
Tampa Bay and Sarasota see heavy multifamily and medical office activity, Jacksonville is a distribution and industrial hub, and Southwest Florida and the Panhandle trade mostly in vacation rentals and small commercial buildings. Net-lease retail and Delaware statutory trust interests are common choices for sellers who want to stop managing Florida rentals.
Federal 1031 rules in brief
Name replacement property in writing within 45 days of your sale, and close on it within 180 days or by your return due date, if earlier. A qualified intermediary must hold the sale proceeds; touching the money ends the exchange. To defer everything, buy at an equal or higher price, reinvest all the cash and replace any debt you paid off. Our 1031 exchange guides go deeper, the 45-day identification validator checks your list, and the 1031 exchange calculator estimates your deferral.
Common Florida 1031 exchange mistakes
- Assuming no state tax means no reason to exchange. The federal bill on a Florida sale is the full $76,400 in our example. Skipping the exchange because Florida charges nothing leaves most of the tax in place.
- Forgetting Miami-Dade's surtax. Investors who budget the statewide 0.70% get a surprise when a Miami-Dade apartment or commercial deal carries 1.05%.
- Underwriting at the seller's property tax bill. The 10% cap resets after a sale, so the replacement's tax bill can jump the next year.
- Exchanging a vacation home without rental history. A Panhandle condo used mostly by the family may not pass as investment property.
- Starting FIRPTA paperwork too late. A foreign seller who files Form 8288-B at closing can have 15% of the price withheld while the exchange clock runs.
- Losing track of a prior state's clawback. Property that came into Florida through a California or Oregon exchange still carries a filing duty to that state.
Start your Florida exchange with 1031 Specialists
Call us before you sign the purchase agreement on your relinquished property, so the exchange agreement and assignment are in place at closing. We hold the proceeds in a segregated account, prepare the exchange documents and track your 45- and 180-day dates. Start your exchange online, book an intro call, or call (631) 438-1031.
Frequently asked questions
Is there a capital gains tax on real estate in Florida?
No. Florida does not impose a personal income tax, so there is no Florida capital gains tax on a property sale. You still owe federal tax: up to 20% on long-term gain, up to 25% on depreciation recapture and the 3.8% net investment income tax.
How can I avoid capital gains tax on real estate in Florida?
There is no Florida tax to avoid, so the goal is the federal tax. A 1031 exchange into other investment real estate defers it, and holding exchanged property until death can let heirs take a stepped-up basis. Your primary home may also qualify for the Section 121 exclusion of up to $250,000 or $500,000 of gain.
How much is the documentary stamp tax on a Florida deed?
It is $0.70 per $100 of the price in most counties. In Miami-Dade it is $0.60 per $100 for single-family homes and $1.05 per $100 for other property because of a $0.45 surtax. A 1031 exchange does not defer this tax.
Does Florida withhold tax when a nonresident sells property?
No. Florida has no state withholding at closing. Foreign sellers are still subject to federal FIRPTA withholding of 15% unless they obtain an IRS withholding certificate using Form 8288-B.
Can I do a 1031 exchange on a Florida vacation home?
Sometimes. The home must be held for investment. The IRS safe harbor looks for fair-market rental of at least 14 days a year and personal use of no more than 14 days or 10% of rental days, in each of the two years around the exchange.
Will my property taxes go up on a Florida replacement property?
Often yes. Non-homestead property has a 10% annual cap on assessment increases, but it is reassessed at full market value in the year after a sale, so the new owner usually pays more than the prior owner did.
Sources
- Florida Department of Revenue: personal income tax FAQ
- Florida Department of Revenue: documentary stamp tax brochure (GT-800014)
- Florida Statutes 201.02: tax on deeds
- Florida Statutes Chapter 199: nonrecurring intangible tax
- Palm Beach County Property Appraiser: assessment caps
- IRS: FIRPTA withholding
- IRS: About Form 8824, like-kind exchanges
Related: Georgia, Alabama, California, New York and all 50 states.
This page is general information about Florida and federal tax rules, not tax or legal advice. Confirm the details of your sale with your CPA or attorney before you act.
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