Taxes on Selling a House in Florida: Capital Gains, the $250,000 Exclusion and Doc Stamps

Florida has no state income tax on individuals, so selling a house here triggers two taxes: federal capital gains tax on any profit, and the documentary stamp tax on the deed, which is $0.70 for every $100 of the price. The federal bill can be $0. If the house was your main home for at least 2 of the last 5 years, the first $250,000 of gain is excluded, or $500,000 for a married couple filing jointly. Doc stamps are due on every sale.

This guide is general information, not tax advice. A Florida CPA can run your numbers, and the IRS publications cited below are the rules they use.

No. Article VII, section 5 of the Florida Constitution bars the state from taxing the income of natural persons who are residents or citizens, so there is no Florida return for the gain. The federal return still applies. You report the sale on Form 8949 and Schedule D, and if the title company sends you a Form 1099-S, the date of sale in box 1 is the date the IRS uses.

It takes two tests, both measured over the 5 years ending on the date of sale. The ownership test: you owned the home for at least 24 months. The use test: you lived in it as your main home for at least 24 months. The two years do not have to be consecutive, and the ownership and use periods can fall in different stretches. For a married couple filing jointly, either spouse can meet the ownership test but both must meet the use test.

You generally cannot use the exclusion if you excluded the gain on another home in the two years before this sale. IRS Publication 523, Selling Your Home, lists the exceptions and the partial exclusion rules. A rental, a vacation home or an inherited house you never lived in does not meet the use test.

If you owned the home for more than one year, the gain is long-term. Most long-term gain is taxed at 0%, 15% or 20% depending on your total taxable income, and the 15% rate covers most sellers. The income thresholds change each year, so check IRS Topic 409 for the current table. A house held one year or less is taxed as short-term gain, at ordinary rates.

Gain is the amount realized minus your basis. The amount realized is the sale price minus your selling expenses. Your basis is what you paid for the house plus the cost of improvements that add value, such as a new roof. IRS Publication 523 treats taxes and fees you pay as the seller as selling expenses, so the deed stamp tax you pay at closing reduces the gain.

Doc stamps are a state tax on the deed. Under section 201.02 of the Florida Statutes the rate is 70 cents on each $100 of the price, so a $400,000 sale carries $2,800. In Miami-Dade County the rate is 60 cents per $100, and the county surtax of 45 cents does not apply to a deed that transfers only a single-family dwelling. By custom the seller pays, though the contract can say otherwise. Every line of the seller's bill is broken out in our guide to [Florida seller closing costs](/blog/florida-seller-closing-costs-cash-sale-vs-listing).

Assume a single owner bought the house for $210,000, spent $20,000 on a roof, and has lived in it for 9 years. Behind on payments, they sell for $400,000 with $7,000 in selling expenses, which includes $2,800 in doc stamps. The amount realized is $393,000 and the basis is $230,000, so the gain is $163,000. That is under the $250,000 exclusion, so no federal tax is due on the gain. The $2,800 in doc stamps is still due at closing. These figures are an illustration, not a quote.

The tax outcome of a foreclosure is different. IRS Publication 523 says that if your home is foreclosed on, you may have ordinary income, gain or loss, and it points to Publication 4681 for the rules. A sale before the foreclosure sale date avoids that question, and the [Florida foreclosure timeline](/blog/florida-foreclosure-timeline) shows how long you have.

Your basis in an inherited home is its fair market value on the date of the decedent's death, not what the decedent paid. If no estate tax return was required, the IRS says your basis is the appraised value at the date of death used for state inheritance or transmission tax purposes. Suppose that value was $380,000 and the heir sells for $395,000 with $12,000 in selling expenses. The amount realized is $383,000, so the gain is $3,000.

The heir never lived there, so the $250,000 exclusion does not apply, but the stepped-up basis leaves little gain to tax. Keep the date-of-death appraisal with your records. The full walkthrough, including probate, is in our guide to [selling an inherited house in Florida](/blog/how-to-sell-an-inherited-house-in-florida), and the [inherited house page](/sell-house/inherited-house) explains how a cash sale works for an estate.

The tax follows the price, your basis and how long you lived there, not the type of buyer. A cash offer is usually lower than a retail price, which lowers the gain, but a lower price is never a reason to sell for less: compare what you net after every cost, taxes included. How the sale works step by step is on our [how it works](/how-it-works) page.