Know the Capital Gains Tax Rules in Florida
Capital Gains Tax in Florida Real Estate: What Home Sellers Need to Know
Thinking about selling your home in Florida? One thing you shouldn't overlook is capital gains tax—especially if your property has increased in value.
What Is Capital Gains Tax?
When you sell your home for more than what you paid for it, the profit is called a capital gain, and it may be taxable at the federal level.
Example:
Bought your home for $250,000 → Sold it for $400,000
Your capital gain = $150,000
Good News for Florida Sellers
Florida has no state income tax, which means no state capital gains tax either.
But the federal capital gains tax still applies.
Primary Residence Exemption
If the home you're selling was your primary residence, you may not owe any capital gains tax at all if:
You’ve lived in the home for at least 2 of the last 5 years, and
Your capital gain is less than $250,000 (single) or $500,000 (married filing jointly)
What If It’s an Investment Property?
If you're selling a rental or investment property, the exemption doesn’t apply. But you might look into:
1031 Exchanges (to defer tax by reinvesting in another property)
Tracking improvements and expenses to reduce your taxable gain
Final Tip
Always consult with a tax professional or CPA to understand your specific situation. But knowing the basics puts you ahead of the game.
