Taxes on Selling a House in Florida: A Guide for Home Sellers

Learn about the key taxes involved when selling a home in Florida, including capital gains, documentary stamp tax, and property taxes—plus how to avoid costly mistakes.

Florida is known for its warm weather, growing economy, and tax-friendly status. While there’s no state income tax here, that doesn’t mean selling a home is completely tax-free. If you’re a Florida homeowner preparing to sell, understanding what taxes and costs to expect can help you protect your profits and stay compliant.

Let’s break down the most important tax considerations — and how to prepare for them with confidence.

This post is for educational purposes and is not intended to be construed as financial or tax advice. Xcellence encourages you to reach out to an advisor.

What Taxes Do You Pay When Selling a Home in Florida?

Even without state income tax, Florida sellers still need to account for:

• Capital Gains Tax (Federal Only)

• Documentary Stamp Tax (Transfer Tax)

• Prorated Property Taxes

We’ll cover each in more detail below.

Capital Gains Tax

When you sell a home in Florida for more than what you originally paid, the profit you make—referred to as a capital gain—may be subject to federal capital gains tax. This tax applies to the net gain from the sale of a capital asset like real estate.

A major advantage for sellers in Florida is that the state does not impose a state income tax, which means there’s no state-level capital gains tax to worry about. All capital gains taxation in Florida falls under federal guidelines only—a financial relief whether you’re a full-time Florida resident or an out-of-state homeowner selling a vacation or second home in the Sunshine State.

The amount you may owe in capital gains tax depends on several factors, such as:

• How long you owned the property

• Your income bracket at the time of sale

• Whether the home was your primary residence

• Any applicable deductions or exemptions

At the federal level, capital gains are classified as either:

• Short-term capital gains, if the asset was held for one year or less. These gains are taxed at your ordinary income tax rate, which is typically higher.

• Long-term capital gains, if the asset was held for more than one year. These gains benefit from reduced tax rates depending on your income.

Understanding the difference between short-term and long-term gains is crucial, as the timing of your sale can significantly influence how much tax you’ll owe.

The following table outlines the long-term capital gains tax rates for the year 2025. Single filers with taxable income of $48,350 or less may qualify for the 0% capital gains rate. For married couples filing jointly, the threshold is $96,700 or less.

In many cases, if the home served as your primary residence, you may qualify for a capital gains tax exclusion, which can reduce or even eliminate the amount of tax owed. These exemptions are especially valuable and will be covered in more detail shortly.

Capital Gains Exclusion

One of the most valuable tax benefits available to Florida home sellers is the capital gains tax exclusion, a federal provision that allows qualifying homeowners to exclude a portion of their profit from taxation when selling their primary residence.

This exclusion is designed to ease the tax burden on everyday homeowners, particularly those selling the homes they’ve lived in for several years. If eligible, individuals can exclude up to $250,000 of capital gains, and married couples filing jointly can exclude up to $500,000.

To qualify for the full capital gains tax exclusion, the IRS requires that specific conditions be met, as outlined in IRS Publication 523:

• Primary residence: The property must have been your main home—the place where you lived most of the time.

• Ownership requirement: You must have owned the home for at least two years during the five-year period before the sale.

• Use requirement: You must have lived in the home for at least two years within that same five-year window. These two years don’t need to be consecutive.

• No recent exclusions: You must not have claimed the exclusion on another home in the past two years.

• No like-kind exchange: The home must not have been acquired through a 1031 exchange in the last five years.

• Not subject to expatriate tax: Individuals who have renounced U.S. citizenship or terminated residency in the U.S. and are subject to expatriation tax are not eligible for the exclusion.

If you meet all of the above requirements, you can typically exclude the full amount of gains up to the legal limit. This significantly reduces or even eliminates your capital gains tax obligation.

However, if you don’t meet every condition, you may still qualify for a partial exclusion. This is often granted in cases involving major life changes, such as:

• A change in your place of employment

• Serious health issues

• Unforeseen circumstances (e.g., divorce, natural disasters, or multiple births from a single pregnancy)

In these situations, the IRS allows for a prorated exclusion based on the time you did meet the criteria. Always consult with a tax advisor to determine your specific eligibility and ensure you’re maximizing your available deductions.

Documentary Stamp Tax

In Florida, the sale of real estate is subject to a documentary stamp tax, commonly referred to as a transfer tax. This tax is applied to the sale price of the property and is typically the responsibility of the seller to pay.

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

For example, if you sell a home for $500,000 in Florida:

• Statewide: The tax would be calculated as $500,000 ÷ 100 × $0.70 = $3,500.

• Miami-Dade County: The tax would be $500,000 ÷ 100 × $0.60 = $3,000.

It’s important to note that if the property in Miami-Dade is anything other than a single-family residence, the tax rate will be $0.60 per $100, plus an additional $0.45 surtax per $100.

The documentary stamp tax ensures that the sale is officially documented and recorded, facilitating a legal transfer of ownership.

Property Taxes

Even if you’re selling your home, you are still responsible for property taxes up until the closing date. In Florida, property taxes are paid in arrears, meaning they’re assessed at the end of the year. Property taxes for a given year aren’t assessed until November of that year.

The timing of your sale can impact whether you owe property taxes at closing. If you’ve already paid the taxes for the year, you may be eligible for a prorated refund. On the other hand, if you haven’t yet paid, you will owe for the portion of the year you owned the home, and the amount will be prorated accordingly.

Florida ranks 25th in the U.S. in terms of property tax rates, with an average effective property tax rate of around 0.82%. However, tax rates can vary depending on the county. For example, the annual property tax on a home valued at $300,000 might be approximately $2,460.

If the property is your primary residence, you may qualify for exemptions that can lower your taxable value by up to $50,000. These exemptions can also limit annual tax increases to no more than 3% per year. Additionally, exemptions are available for specific groups, such as active-duty military, veterans, and senior citizens.

Common Tax Mistakes to Avoid

1. Selling too early: If you sell before the 2-year ownership/residence threshold, you could lose out on the capital gains exclusion.

2. Lack of receipts: Improvements like kitchen remodels or roof replacements can reduce your taxable gain — but only if documented.

3. Incorrect assumptions about tax exemptions: Always consult a tax advisor to understand how your specific sale is treated.

Other Costs to Expect When Selling in Florida

Here’s a breakdown of the key costs you should expect:

• Title Fees: These include the cost of title insurance and a title search. Title insurance protects you from potential issues with the property’s title, such as undiscovered claims or illegal deeds. Title insurance fees typically range from 0.5% to 1% of the sale price. A title search, which costs between $100 and $250, verifies the seller’s ownership and ensures there are no legal claims or judgments against the property. This fee can be paid by either the buyer or the seller.
• Settlement Fees: These fees usually amount to about 1% of the home’s sale price and cover the services of the title company, escrow company, or attorney handling the closing. These are often called escrow fees, and they cover the closing paperwork, as well as the distribution of funds to the relevant parties. Typically, the buyer and seller split these costs.
• Agent Commissions: Traditionally, real estate agent commissions have ranged from 3% to 6% of the sale price, split between the buyer’s and seller’s agents. In the past, sellers usually covered both agents’ commissions. However, a recent ruling from the National Association of Realtors (NAR) has shifted this practice, allowing buyers to negotiate their agent’s fees directly. Despite this change, many sellers still choose to cover the buyer’s agent’s commission in order to attract more offers and speed up the sale. If you cover both the buyer’s and listing agent’s fees, expect to pay around 6% of the sale price. If you only cover the listing agent’s commission, your cost will be closer to 3%.

How to Prepare for a Tax-Efficient Sale

Tax obligations following the sale of your home need not be daunting. By taking a few proactive steps, you can ensure a smooth and informed experience when selling your property in Florida:

• • Evaluate Your Home’s Value: Gain a clear understanding of your home’s market value to better project potential capital gains and assess the taxes you may owe.

  • Organize Essential Documents: Being prepared with the right documentation is key. Consult with your tax advisor to ensure you have all necessary federal and state forms required for your Florida sale, and inquire about available tax exemptions or breaks that could benefit your specific situation.

  • Partner with a Skilled Agent: Collaborating with an experienced Florida real estate agent is invaluable. A knowledgeable professional will guide you seamlessly through the selling process, help you grasp the tax implications, and work to optimize your financial outcome, ensuring you retain maximum profit.

Xcellence makes it easy to connect with top-tier real estate agents in your Florida market, carefully evaluating their track record, market expertise, and ability to maximize your sale price. By partnering with a professional, you ensure you get the highest possible return on your sale, backed by expert guidance throughout the process. Find your expert agent today with Xcellence.

At Xcellence Title, we take it a step further. Our skilled team not only ensures your closing documents are accurate, but also provides clear explanations of your tax responsibilities and ensures all necessary forms are properly filed. Combining in-depth real estate knowledge with cutting-edge technology, we offer transparent, tax-smart closings from start to finish, so you can move forward with confidence. Get in touch with Xcellence Title now to ensure a smooth, tax-efficient closing.