Money and taxes
Capital Gains When You Sell a Florida Home
Florida has no state income tax, so the only question is the federal one — and for most primary-residence sellers, the answer is a much smaller number than they feared.
Short answer
Do I pay capital gains tax when I sell my house in Florida?
Florida imposes no state income tax, so there is no state capital gains tax on a home sale. Federally, if the home was your primary residence for at least two of the last five years, IRC Section 121 lets you exclude up to $250,000 of gain if you file singly, or $500,000 if you file jointly. Gain above that, and gain on second homes, rentals and flips, is taxable. This is general information, not tax advice — confirm your specific numbers with a CPA.
Gain is not the same as the sale price
Sellers routinely calculate gain by subtracting what they paid from what they sold for. That overstates it. Your taxable gain is the sale price, minus selling costs, minus your adjusted basis — the original purchase price plus every capital improvement you have made since.
Adjusted basis is where most Florida sellers leave money on the table. A new roof, impact windows, a re-piped house, a pool cage, a seawall, an HVAC replacement, a kitchen remodel, a new dock: all of it raises your basis and lowers your gain. Routine maintenance and repairs do not.
| Line | Example |
|---|---|
| Sale price | $625,000 |
| Less selling costs (commission, title, doc stamps) | − $47,000 |
| Less original purchase price | − $340,000 |
| Less documented capital improvements | − $86,000 |
| Taxable gain before exclusion | $152,000 |
| Section 121 exclusion (married, filing jointly) | − up to $500,000 |
| Gain subject to federal tax | $0 |
Where sellers actually get caught
- Second homes and seasonal condos. A Venice or Englewood winter place that was never your primary residence gets no Section 121 exclusion.
- Former rentals. Depreciation you claimed — or could have claimed — is recaptured at up to 25% even when the rest of the gain is excluded.
- The two-year rule. Two of the previous five years as a primary residence, and you cannot have used the exclusion on another sale within two years.
- Long-held Florida homes. A house bought in the 1990s in Punta Gorda or Siesta Key can easily exceed the $500,000 exclusion. That is a good problem, but it is a planning problem.
- Foreign sellers. Under FIRPTA, the closing agent generally withholds 15% of the gross sale price for non-resident sellers, refundable later against actual tax owed.
- Inherited property. A stepped-up basis to fair market value at date of death usually means very little gain if you sell soon after.
If any of those describe you, the number that matters is not the offer price — it is the net after tax. It is worth an hour with a CPA before you sign anything.
Timing and structure choices that change the number
- Partial exclusion. If you sell short of two years because of a job relocation, health reason or other unforeseen circumstance, the IRS allows a prorated exclusion.
- 1031 exchange. Investment property only, never a primary residence. It defers rather than eliminates the tax, and the identification clock is 45 days from closing.
- Installment sales. Spreading the proceeds across tax years can keep you in a lower bracket.
- Document everything now. Pull permits, invoices and receipts for improvements before you list. Reconstructing a decade of basis after closing is painful.
Questions sellers actually ask
Does Florida tax my home sale profit?
No. Florida has no personal income tax, so there is no state-level capital gains tax on a home sale. You will still pay documentary stamp tax on the deed, which is a transfer tax, not an income tax.
Does my homestead exemption affect capital gains?
No. Homestead affects your property tax assessment and portability of the Save Our Homes cap. Capital gains is a separate federal calculation.
I am a Canadian owner selling a Florida condo. What changes?
FIRPTA withholding generally applies at 15% of the gross price, with reduced rates in some cases. Plan the paperwork before closing so the funds are not held up.
Do repairs count toward my basis?
Repairs generally do not; capital improvements that add value or extend the life of the property do. A new roof counts, patching three shingles does not.
Two numbers, one address.
Send the property address and we will come back with a guaranteed as-is cash offer and the price we project on the open market.