Do You Pay Sales Tax on a House in Florida?

Purchasing a house in Florida does not incur sales tax. While sales tax is not applied to the sale of real property, other taxes and fees are associated with real estate transactions in the state.

Understanding Florida Sales Tax

Florida’s sales tax applies to the sale of tangible personal property, certain services, and rentals. The state sales tax rate is 6%, with additional county surtaxes varying by location.

Real estate, including land and permanent structures, is exempt from sales tax under Florida law. It is not classified as tangible personal property, which is subject to sales tax collected by the seller.

Key Taxes on Florida Real Estate Transactions

While sales tax does not apply to real estate purchases, several other taxes are part of the transaction. These include documentary stamp tax, intangible tax on mortgages, and property taxes.

Documentary Stamp Tax

Documentary stamp tax is an excise tax levied on documents involved in real estate transactions, such as deeds and mortgages. This tax applies to documents that transfer an interest in Florida real property. The tax rate for deeds, which transfer ownership, is $0.70 per $100 of the total consideration paid for the transfer in most Florida counties.

This tax is calculated based on the consideration, which can include money paid or any mortgage or lien encumbering the property. Documentary stamp tax is also due on mortgages filed or recorded in Florida, at a rate of $0.35 per $100 of the indebtedness. Sellers are responsible for the tax on the deed, while buyers financing a purchase cover the tax on the mortgage.

Intangible Tax on Mortgages

The intangible tax is imposed on obligations secured by a mortgage or lien on Florida real property. This tax applies to new mortgages and is a one-time payment. The tax rate is 2 mills, meaning it is calculated by multiplying the amount of the obligation secured by the Florida real property by 0.002, or $2 for every $1,000 of the mortgage’s value.

Lenders pass this cost to the borrower as part of closing costs. This tax is paid when the mortgage is filed or recorded in Florida.

Property Taxes

Property taxes are an ongoing obligation for homeowners in Florida. These taxes are assessed annually by county property appraisers based on the market value of the property as of January 1st each year. The rates are set at the local level and vary by county, funding local services such as schools and roads.

Property taxes are paid annually and are often prorated between the buyer and seller at closing. This proration ensures each party pays for the portion of the year they owned the property. Exemptions, such as homestead exemptions, can reduce the taxable value of a property.

Specific Scenarios and Related Costs

Certain scenarios related to real estate in Florida can involve sales tax or other related costs, which might cause confusion. Understanding these nuances helps clarify when sales tax might apply or when other expenses are involved.

Mobile Homes

Sales tax can apply to the sale of mobile homes in Florida, depending on their classification. New mobile homes are subject to a state sales tax rate of 3%, plus any applicable county discretionary sales surtax. For used mobile homes classified as tangible personal property, the state sales tax rate is 6% along with any surtax. If a mobile home is permanently affixed to land and classified as real property by the property appraiser, it is generally subject to property taxes rather than sales tax on its sale.

New Construction and Materials

The sale of a newly constructed home itself is not subject to sales tax in Florida. However, the builder constructing the home typically pays sales tax on the materials used in the construction process. This cost is usually incorporated into the overall price of the home. Therefore, while the home buyer does not directly pay sales tax on the purchase, the underlying cost of materials included sales tax paid by the builder.

Commercial Property

The general rules regarding sales tax on the sale of real property apply to commercial real estate transactions, meaning the sale itself is not subject to sales tax. However, sales tax does apply to commercial leases in Florida. The state sales tax rate on commercial leases has been subject to reductions, with a scheduled permanent repeal of the state sales tax and local surtaxes on commercial lease payments effective October 1, 2025. Prior to this repeal, the state sales tax rate was 2% as of June 1, 2024, in addition to any applicable local surtaxes.

Services Related to Real Estate

While the sale of real property is not taxed, sales tax may apply to certain services associated with a real estate transaction. Florida generally taxes the sale of tangible personal property and some services. For example, sales tax may apply to specific cleaning or repair services performed before a sale, or survey fees if a tangible product is delivered. Most professional services, such as legal or accounting fees, are typically not subject to sales tax in Florida.

General Closing Costs

Beyond taxes, numerous other closing costs are part of a real estate transaction in Florida. These are not sales taxes but represent various fees and expenses incurred during the closing process. Common closing costs include title insurance, attorney fees, and recording fees for the deed and mortgage. These costs vary based on the transaction and location, and buyers should budget for them as part of the overall purchase.