Selling a Rental Property in Florida: Tenants' Rights, Taxes and 1031 Exchanges

Selling a rental property in Florida takes more planning than selling the home you live in. You have a tenant with legal rights, a lease that may outlast your listing, and a tax bill shaped by years of depreciation. Yet with the right order of steps, most landlords sell smoothly. This guide covers whether to sell occupied or vacant, Florida's notice and showing rules, security deposits, depreciation recapture and the basics of a 1031 exchange.

Key takeaways

• A sale does not usually end a lease. In most cases the buyer takes the property subject to the tenant's lease.
• Florida law lets a landlord show the unit to buyers, and the tenant may not unreasonably refuse. For repairs, 24 hours of notice is the legal standard.
• To end a month-to-month tenancy, you must give at least 30 days of notice before the end of a monthly period.
• At closing, security deposits and an accounting must go to the new owner.
• Depreciation is taxed at sale at up to 25%. A 1031 exchange can defer the gain, but you must identify a new property within 45 days and close within 180 days.

Selling a rental property in Florida: occupied or vacant?

Your first big choice is whether to sell with the tenant in place or wait until the home is empty. Each option fits a different buyer.

An occupied home appeals to investors. They get rent from day one, and they can see the lease and payment history. As a result, a good tenant with a fair lease can be a selling point. However, owner-occupant buyers usually need the home empty by closing, so an occupied sale can shrink your buyer pool.

A vacant home is easier to show, stage and repair. It also opens the door to buyers who plan to live there, who often pay more. On the other hand, you carry the mortgage, taxes, insurance and utilities with no rent while it sits on the market.

How the lease shapes your timeline

Start by reading the lease. A fixed-term lease generally stays in force after a sale unless the lease itself says otherwise. So if your tenant has eight months left, a buyer who wants to move in must wait, or you must negotiate an early move-out with the tenant.

A month-to-month tenancy is more flexible. Under section 83.57, you can end it with at least 30 days of written notice before the end of a monthly period. For a week-to-week tenancy, the notice is 7 days.

Showing the home with a tenant in place

Florida law allows showings, but the tenant still has rights. Under section 83.53, the tenant may not unreasonably refuse to let you show the unit to buyers. For repairs, the statute treats at least 24 hours of notice as reasonable, with entry between 7:30 a.m. and 8:00 p.m. Many landlords follow that same standard for showings.

In practice, cooperation matters more than the statute. A tenant who feels ignored can make showings hard. So try these steps:

• Tell the tenant about the sale early and in writing.
• Set showing windows that fit their schedule.
• Offer a small rent credit or cleaning help in return for flexibility.
• Keep showings short, and make sure the agent locks up.

Some landlords also offer a cash-for-keys deal, in which the tenant agrees to move out early in return for a payment. Put any such deal in a signed written agreement. For the tenant's side of the process, see our guide to tenant rights when a landlord sells.

Security deposits at closing

When you sell, the deposit moves with the property. Under section 83.49(7), you must transfer all security deposits, plus any interest owed, to the new owner along with an itemized accounting. Once you have written confirmation of the transfer, you are released from holding the money.

Your closing agent can handle this on the settlement statement. Also, give the buyer copies of the lease, any addenda and the rent ledger. Clean records make the sale easier for everyone.

Taxes when selling a rental property in Florida

Florida has no state personal income tax, but federal tax still applies. Your gain is generally the sale price minus selling costs and your adjusted basis. Your adjusted basis is what you paid, plus improvements, minus the depreciation you took.

Depreciation recapture

Each year you owned the rental, you could deduct depreciation on the building. That lowered your tax then, but it lowers your basis too. When you sell, the IRS taxes that part of the gain, called unrecaptured section 1250 gain, at a maximum rate of 25%, according to IRS Topic 409. The rest of a long-term gain is taxed at 0%, 15% or 20%, depending on your income.

Did you ever live in the home?

If the rental was once your main home, part of the gain may qualify for the home sale exclusion. Under IRS Publication 523, you must have owned and lived in the home for at least 2 of the 5 years before the sale. Even then, depreciation taken after May 6, 1997 is not excluded. Our post on taxes when you sell a house in Florida covers the exclusion in more depth.

1031 exchange basics

A 1031 exchange lets you defer the gain by buying another investment property. It only works for real property held for business or investment, not for your personal home. The IRS fact sheet on like-kind exchanges lists two strict deadlines:

1. 45 days to identify. From the day you sell, you have 45 days to identify possible replacement properties in writing.
2. 180 days to close. You must receive the replacement property within 180 days of the sale, or by your tax return due date with extensions, whichever is earlier.

These deadlines cannot be extended for hardship, except in presidentially declared disasters. Also, you generally cannot touch the sale cash yourself. Most investors use a qualified intermediary who holds the funds. You report the exchange on Form 8824.

Also watch for what tax pros call boot. If you take cash out of the deal, or take on less debt on the new property than you paid off on the old one, that part is generally taxable. So match the value and the loan amount closely if you want to defer as much gain as possible.

Plan an exchange before you list, not after closing. In fact, many investors line up their intermediary and a short list of replacement homes while the first property is still on the market.

How to prepare when selling a rental property in Florida

Rentals often show more wear than owner-occupied homes. A little prep can go a long way. Consider these steps:

• Fix safety issues and anything a buyer's inspector or insurer would flag.
• Repaint and deep clean once the unit is empty, if you sell vacant.
• Gather the lease, rent roll, deposit records, permits and HOA approvals.
• Review your insurance, since a vacant home may need a different policy.
• Get a net-proceeds estimate that includes taxes, payoff and closing costs.

If the home is in a condo or HOA community, ask the association early about its sale approval steps and fees. Some associations need time to review a buyer, and that can affect your closing date. Then share the rules with buyers up front, so an investor knows what leasing limits apply before making an offer.

Local market context

Market speed affects how long you carry an empty unit. In August 2026, Palm Beach County single-family homes went under contract in a median of 40 days, while condos and townhouses took 69 days, according to Miami Realtors. Condo supply stood at 6.7 months, compared with 3.5 months for single-family homes. So a condo rental may take longer to sell, which can favor selling with a tenant in place. Demand also differs by city, from West Palm Beach to Port St. Lucie, so ask for local comps.

Frequently asked questions

Can I sell a rental property in Florida with a tenant living there?

Yes. The lease generally stays in force after the sale, and the buyer takes over as landlord. Investors often like buying a home with a good tenant in place.

How much notice do I give a tenant before a showing?

Florida law says a tenant may not unreasonably refuse access for showings. For repairs, 24 hours of notice is the legal standard, and many landlords use it for showings too.

What happens to the security deposit when selling a rental property in Florida?

You must transfer it, plus any interest owed, to the new owner with an itemized accounting. Written confirmation of the transfer releases you from holding it.

How can I avoid taxes when selling a rental property in Florida?

You usually cannot avoid them entirely, but a 1031 exchange can defer the gain if you buy another investment property and meet the 45 and 180 day deadlines. A CPA can review your options.

Should I sell my rental vacant or occupied?

Vacant homes often draw more buyers and higher prices, but you lose rent while you wait. Occupied homes suit investors. The right choice depends on your lease, your market and your costs.

Sources

• Florida Statutes, s. 83.53 landlord access
• Florida Statutes, s. 83.57 ending a tenancy
• Florida Statutes, s. 83.49 security deposits
• IRS, Topic 409: Capital gains and losses
• IRS, Publication 523: Selling Your Home
• IRS, Like-kind exchanges under IRC section 1031
• IRS, Instructions for Form 8824
• Miami Realtors, Palm Beach County August 2026 market report

This article is general information, not legal, tax or financial advice. Landlord-tenant and tax rules are detailed, so consult a real estate attorney and a CPA about your own sale.

Ready to sell your rental? Request a personalized seller net-proceeds sheet from Pure Equity. We will estimate your sale price, closing costs and timeline for an occupied or vacant sale. If you plan to buy a replacement property, our agents can help you search for it too. Request your net sheet.