Taxes and money when selling in Florida
Taxes when selling a house in Florida divide into three unrelated things people constantly merge: the federal capital gains position, Florida's county property tax and homestead rules, and withholding where the seller is foreign. This guide separates them, cites every figure to the authority it came from, and is clear about where an accountant has to take over.
Free Home Valuation
Every question in this guide ends at the same two numbers: what your property is worth and what you would keep. We will work both out from recent sales near you.
What an agent can and cannot tell you
We can tell you what your property is worth, what it will cost to sell and what you would receive at closing.
We cannot tell you what you will owe, and neither can any other agent, however confidently they answer.
Every figure on this page that comes from a tax authority is cited to that authority so you can re-check it.
Every calculation is routed to an accountant, because the inputs are facts about you rather than about the property.
That division is not caution for its own sake. Tax advice from an unqualified source is worth less than nothing.
What we provide is the valuation, the net sheet and the closing statement, which is what your accountant asks for.
The capital gains exclusion in outline
The IRS allows a qualifying seller to exclude up to $250,000 of gain on a main home, or up to $500,000 on a joint return.
Those figures come from IRS Topic 701 rather than from recollection.
Qualifying means meeting both an ownership test and a use test, each looking at 24 months within the last 5 years.
The exclusion is generally unavailable if you claimed it on another home sale in the two years before this one.
Gain is the sale price less basis and less selling costs, not simply what you paid against what you sold for.
Improvement records raise your basis and therefore reduce gain, which is why keeping them pays.
Florida's own tax picture
Florida has no state personal income tax, which is a genuine advantage and is frequently over-read.
It does not change the federal capital gains position, which applies wherever you live.
It does not remove FIRPTA withholding for a foreign seller, which is federal.
What Florida does have is property tax, billed in arrears and prorated at closing.
It also has the Save Our Homes assessment limitation and portability, administered by county property appraisers.
Those are county matters rather than income tax matters, and the two get confused constantly.
Investment property is a different conversation
The primary residence exclusion does not apply to an investment property.
Depreciation claimed during ownership is accounted for at sale, and it can apply based on what was allowable rather than only what was claimed.
That single point produces more unwelcome surprises than anything else in this cluster.
A 1031 exchange can defer gain into a replacement property, under strict deadlines and with an intermediary in place before closing.
A property that was a home for part of the period and a rental for another part has mixed treatment.
Each of those needs modelling before you list rather than discovering after you close.
Foreign sellers and withholding
FIRPTA requires withholding on a disposition of US real property by a foreign person.
The general rate is 15% of the amount realized, per IRS guidance, and the buyer is normally the withholding agent.
A full exemption can apply where the amount realized does not exceed $300,000 and the buyer will use it as a residence.
Withholding is on the amount realized rather than on gain, so a seller with little or no gain can still face it.
A withholding certificate can reduce it in defined circumstances, applied for in advance.
A US taxpayer identification number is usually needed and can take time to obtain, so it belongs on the pre-listing list.
The money that arrives after closing
Your escrow balance comes back from the lender weeks after closing rather than at the closing table.
Unused insurance premium may be refunded, but only once you cancel the policy, which is your job.
Automatic mortgage payments and recurring services keep running until somebody stops them.
None of this appears on the settlement statement, which is why it gets forgotten.
Do not count any of it toward a same-day purchase, because it is not available then.
A short list written at closing recovers money that otherwise goes unnoticed.
Where timing genuinely matters
Meeting the ownership or use test can turn on a matter of weeks.
The two-year rule on repeat use of the exclusion is a date calculation rather than a judgement.
A closing either side of a year end lands in a different tax year.
Homestead portability has a statutory window between giving up one homestead and establishing the next.
A 1031 exchange has strict identification and completion deadlines running from closing.
None of these are reasons to delay a sale by themselves, and all are worth raising before you list.
What to gather before you see an accountant
Your purchase closing statement, which establishes your starting basis.
Invoices and permits for capital improvements made during ownership.
Depreciation schedules and prior returns if the property was ever rented.
Documentation of any period of personal use, vacancy or business use.
A current valuation and a written net sheet, which we produce.
Sellers who arrive with these get a real answer. Sellers who arrive without them get an estimate.
The order that avoids expensive surprises
Get a valuation and net sheet so the likely proceeds figure is real rather than assumed.
Gather the purchase statement, improvement records and any rental documentation.
See an accountant before listing, not after accepting an offer.
Ask specifically about the exclusion tests, any rental period, and whether timing matters.
If it is an investment property, ask about recapture and whether an exchange is worth the constraint.
Then make the selling decision with the after-tax figure in front of you.
What this guide is not
It describes how these rules are structured in general terms, for planning purposes.
It is not tax advice and it cannot tell you your position, because that depends on facts we do not have.
Figures cited here were verified against the IRS at the time of writing and are named so you can re-check them.
Tax rules change, and a figure that was right when written may not be current when you read it.
Where a number mattered and our source was unclear, this guide says so rather than guessing.
Your accountant gives you the answer. We give them the property figures they need to produce it.
In This Guide
Every cost, answered separately
Capital gains tax on a home sale: the exclusion
Capital gains tax on a home sale: how the $250,000 and $500,000 exclusion works, the ownership and use tests, and what raises your basis.
Florida homestead portability when you sell and buy
Florida homestead portability lets you carry a Save Our Homes assessment benefit to a new home. How it works, the deadlines, and what to file.
1031 exchange for investment property sellers
A 1031 exchange can defer gain on an investment property sale. What the structure requires, why the deadlines are unforgiving, and who has to be involved.
FIRPTA: selling Florida property as a foreign seller
FIRPTA withholding applies when a foreign person sells US real property. The general rate, the residence exemption threshold, and who withholds.
Prorated property taxes at closing in Florida
Prorated property taxes at closing in Florida: why you owe tax you thought was paid, how the proration is calculated, and what appears on your statement.
Depreciation recapture on an investment property sale
Depreciation recapture explained for sellers: why depreciation you claimed on a rental comes back at sale, and why it applies even if you never claimed it.
Your escrow account and insurance refunds after closing
Your escrow account refund after selling a house arrives from the lender, not at closing. What comes back, roughly when, and what you have to cancel yourself.
Frequently Asked Questions
- How much capital gain can I exclude when I sell my home?
- The IRS allows up to $250,000 for a single filer and up to $500,000 on a joint return, subject to ownership and use tests of 24 months each within the last 5 years. Those figures come from IRS Topic 701. What you actually owe is an accountant's calculation.
- Does Florida tax my home sale?
- Florida has no state personal income tax, which is a real advantage. It does not change the federal capital gains position, and it does not remove FIRPTA withholding for a foreign seller. Florida's own tax at closing is the property tax proration.
- Why do I owe property tax I thought I had paid?
- Florida bills in arrears, so the bill you paid covered the previous year. At closing you are debited for the portion of the current year you owned the property. It is a standard proration rather than a second charge, and it surprises sellers consistently.
- What is homestead portability?
- It lets an owner with a Florida homestead carry accumulated Save Our Homes assessment savings to their next Florida home, reducing what that home costs to hold. It is not automatic, it must be applied for with the county property appraiser, and it has a deadline.
- What catches out investment property sellers?
- Depreciation recapture, and specifically that it can apply based on depreciation that was allowable rather than only what was claimed. An owner who never claimed depreciation can still face the consequence, which is the most common unwelcome discovery in these sales.
- Should I do a 1031 exchange?
- It can defer gain into a replacement property, but it has strict deadlines and needs a qualified intermediary in place before closing. Whether it is worth the constraint depends on the size of the deferred amount, which your accountant should model before you list.
- I am not a US citizen. What applies to me?
- FIRPTA withholding applies to a disposition by a foreign person, at a general rate of 15% of the amount realized, with the buyer normally acting as withholding agent. A full exemption can apply at $300,000 or less where the buyer will use it as a residence.
- When will I get my escrow balance back?
- From the lender, weeks after closing rather than at the closing table, because it is reconciled separately from the payoff. It does not appear on your settlement statement, which is why it gets forgotten. Note the balance from the payoff statement so you can chase it.
- When should I talk to an accountant?
- Before you list, not after you accept an offer. Several of the rules on this page turn on timing, and some decisions cannot be undone once a contract is signed. Bring a valuation, a net sheet, your purchase statement and improvement records.
- Can you just tell me what I will owe?
- No, and you should be wary of any agent who will. We give you an accurate valuation, a written net sheet showing proceeds before tax, and the closing statement at the end. Those are exactly what your accountant needs to answer it properly.
Talk It Through
Get the number before you decide anything
A written net sheet on your property answers most of what this guide raises, and it takes us a short conversation to produce. There is no cost and no obligation to list.
Buying as well as selling? Start with our buyer guide or browse homes for sale.
Keep Reading
Related seller guides
- 1031 exchange for investment property sellers
- Capital gains tax on a home sale: the exclusion
- Depreciation recapture on an investment property sale
- Your escrow account and insurance refunds after closing
- FIRPTA: selling Florida property as a foreign seller
- Florida homestead portability when you sell and buy
- Prorated property taxes at closing in Florida
- How to choose a listing agent in Belle Glade
- What it costs to sell a house in Belle Glade
- Belle Glade home sale report: prices, sale-to-list and days on market