How Much Tax Do You Pay When You Sell a House in Florida?

Selling a home involves various financial considerations beyond the sale price. Understanding potential tax implications is an important part of the process for sellers. These considerations range from federal income taxes on profit to specific state-level taxes and adjustments made during closing. Navigating these aspects helps ensure a smoother transaction and allows sellers to anticipate their net proceeds accurately.

Federal Capital Gains Taxation on Home Sales

When you sell your home, any profit is considered a capital gain for federal tax purposes. This gain is calculated by subtracting your adjusted basis and selling expenses from the selling price. Your adjusted basis includes the original purchase price plus capital improvements like additions or a new roof. Depreciation claimed on the property, if used for business or rental purposes, reduces your basis.

The primary residence exclusion allows a certain amount of capital gain from the sale of a main home to be excluded from taxable income. To qualify, you must meet both an ownership test and a use test. You must have owned and used the home as your main residence for at least two of the five years leading up to the sale.

The exclusion amount is up to $250,000 for single filers and $500,000 for those married filing jointly. This exclusion can be claimed once every two years. If your capital gain exceeds these amounts, the excess portion is subject to capital gains tax rates.

Capital gains are categorized as short-term or long-term, depending on how long you owned the property. If owned for one year or less, gain is short-term and taxed at ordinary income rates, which can range from 10% to 37% for 2025. For assets held longer than one year, gain is long-term capital gain, taxed at preferential rates of 0%, 15%, or 20%, depending on your taxable income.

For instance, in 2025, the 0% long-term capital gains rate applies to taxable income up to $43,350 for single filers. The 15% rate applies to taxable income between $43,351 and $492,300, and the 20% rate applies to taxable income exceeding $492,300. An additional 3.8% Net Investment Income Tax (NIIT) may also apply to higher-income earners, impacting both short-term and long-term capital gains if their modified adjusted gross income exceeds certain thresholds, such as $200,000 for single filers or $250,000 for married couples filing jointly.

Maintain thorough records of your home’s original purchase price, closing costs, and all capital improvements. These records help establish your adjusted basis, which can reduce the amount of taxable gain when you sell. For example, if you bought a home for $300,000 and spent $50,000 on qualifying improvements, your adjusted basis would be $350,000. If you then sell the home for $600,000, your capital gain before any exclusion would be $250,000.

If you are a single filer and meet the ownership and use tests, this entire $250,000 gain would be excluded from your taxable income. However, if your gain was $300,000, the first $250,000 would be excluded, and the remaining $50,000 would be subject to capital gains tax. This federal tax applies uniformly across the United States, including Florida.

Florida Documentary Stamp Tax on Deeds

The Florida Documentary Stamp Tax is a state tax levied on documents that transfer an interest in real property, such as deeds. This tax is paid by the seller at closing. Its purpose is to generate revenue for the state and is a standard part of real estate transactions in Florida.

The tax rate for deeds in most Florida counties is $0.70 for each $100, or portion thereof, of the total consideration. For instance, if a home sells for $400,000, the documentary stamp tax would be $2,800. This tax is based on the full purchase price or fair market value of the property, including any liabilities like assumed mortgages.

In Miami-Dade County, there is a slightly different rate structure. For single-family residences, the rate is $0.60 per $100 of consideration. For other types of property in Miami-Dade, an additional surtax of $0.45 per $100 applies, making the total $1.05 per $100. The total consideration includes the money paid and the discharge of any obligations, such as an existing mortgage.

This tax is collected by the title company or closing agent at the time the deed is recorded. While the seller pays this tax, the responsibility for payment rests on all parties to the document. If one party is exempt, a non-exempt party must pay it. This is a direct state tax that is distinct from federal capital gains taxes.

Property Tax Prorations at Closing

Property taxes are an ongoing annual obligation for property owners, not a specific tax on selling a home. In Florida, property taxes are paid in arrears, meaning the tax bill for a given year is issued towards the end of that year. When a home is sold, these annual property taxes are prorated between the buyer and the seller at closing to ensure each party pays for the period they owned the home.

The proration process divides the annual tax bill based on the number of days each party will own the property during the tax year (January 1st to December 31st). For example, if a closing occurs on June 30th, the seller is responsible for property taxes from January 1st to June 30th, and the buyer from July 1st through December 31st. The seller provides a credit to the buyer at closing for their portion of the taxes.

This credit impacts the seller’s net proceeds from the sale. If the annual tax bill has not yet been issued, the proration is based on an estimate using the previous year’s tax amount. Buyers and sellers sign a re-proration agreement, allowing for an adjustment if the actual tax bill, once issued, differs significantly from the estimate.

Homestead exemptions can affect property tax assessments, reducing the taxable value for qualifying homeowners. While these exemptions lower the seller’s property tax liability during their ownership, they do not transfer to the new buyer automatically. New buyers must apply for their own exemptions, and the property’s assessed value may increase significantly for the new owner.

Withholding for Non-Resident Sellers

The Foreign Investment in Real Property Tax Act (FIRPTA) is a federal law ensuring foreign persons pay U.S. income tax on the sale of U.S. real property interests. When a foreign person sells U.S. real estate, FIRPTA requires the buyer, or their agent, to withhold a portion of the gross sale price and remit it to the Internal Revenue Service (IRS). This withholding acts as a prepayment of the foreign seller’s potential U.S. tax liability.

A “foreign person” for FIRPTA purposes includes non-resident alien individuals, foreign corporations, foreign partnerships, foreign trusts, and foreign estates. The withholding rate is 15% of the gross sales price, regardless of whether the seller realizes a gain or loss on the sale. This amount is withheld at closing by the buyer or the closing agent and then submitted to the IRS.

There are specific exceptions or conditions under which the withholding may be reduced or not required. For instance, if the buyer acquires the property for use as a residence and the sale price is $300,000 or less, FIRPTA withholding may not be necessary, provided the buyer or a family member plans to reside at the property for at least 50% of the time during each of the first two 12-month periods after the transfer. Another exception applies if the seller provides a certification stating they are not a foreign person.

Foreign sellers can also apply for a withholding certificate from the IRS to reduce or eliminate the withholding amount if they can demonstrate that their actual tax liability will be less than the standard 15%. The responsibility for withholding and remitting these funds falls on the buyer, not the title company or real estate agent, although these professionals facilitate the process. This is a federal requirement that applies nationwide, including real estate transactions in Florida.