Does Florida have a capital gains tax?
No. Article VII, section 5 of the Florida Constitution prohibits a state tax on the income of natural persons who are residents or citizens, beyond amounts creditable against a federal tax. Capital gains are income, so Florida residents pay no state tax on them. The taxes that apply when you sell a Florida home are:
- Federal capital gains tax, reported on your IRS return for the year of the sale.
- Florida documentary stamp tax on the deed, 70 cents per $100 of the price, usually paid by the seller at closing. See the doc stamps guide.
- Prorated property tax for the part of the year you owned the home, settled on the closing statement. See the property tax guide.
If you moved to Florida recently, your former state may still claim tax on a gain from property located there, or on a sale that happened before you changed residency. That is a question for a tax adviser in that state.
Federal capital gains tax rates for 2026
How the gain is taxed depends on how long you owned the property and your total taxable income. The IRS explains the rules in Topic 409, and the 2026 thresholds come from Revenue Procedure 2025-32.
Long-term gains: owned more than one year
Long-term gains are taxed at 0%, 15% or 20%. The rate depends on where the gain falls when it is stacked on top of your other taxable income.
| Filing status (2026) | 0% rate up to | 15% rate up to | 20% rate above |
|---|---|---|---|
| Single | $49,450 | $545,500 | $545,500 |
| Married filing jointly | $98,900 | $613,700 | $613,700 |
| Head of household | $66,200 | $579,600 | $579,600 |
| Married filing separately | $49,450 | $306,850 | $306,850 |
Short-term gains: owned one year or less
A short-term gain is taxed as ordinary income at your regular bracket, from 10% to 37%. For a single filer in 2026, the 22% bracket covers taxable income from $50,400 to $105,700 and the 24% bracket from $105,700 to $201,775. A quick resale therefore costs far more than the same gain held a little longer.
The 3.8% net investment income tax
Under IRS Topic 559, a 3.8% net investment income tax applies to the lesser of your net investment income or the amount by which your modified adjusted gross income exceeds $200,000 (single or head of household), $250,000 (married filing jointly) or $125,000 (married filing separately). The taxable part of a home sale gain counts; the excluded part does not.
Depreciation on a rental: up to 25%
If you claimed depreciation on the property, for example as a rental, the part of the gain equal to that depreciation (unrecaptured section 1250 gain) is taxed at a maximum 25% rate, according to Topic 409, and it cannot be excluded as home sale gain.
The $250,000 and $500,000 home sale exclusion
Section 121 of the Internal Revenue Code lets you exclude up to $250,000 of gain on the sale of your main home, or $500,000 if you file jointly with your spouse. The IRS sets out the tests in Topic 701 and Publication 523.
The ownership test
You, or your spouse, owned the home for at least 24 months of the 5 years ending on the date of sale.
The use test
You lived in the home as your main residence for at least 24 months of the same 5 years. For the $500,000 exclusion, both spouses must meet the use test. The 24 months do not have to be continuous, and the ownership and use periods can be different 2-year spans within the 5 years.
The once-every-two-years rule
You generally cannot use the exclusion if you excluded gain on another home sale in the 2 years before this one.
Partial exclusion for work, health or unforeseeable events
If you fail the 2-year tests because the main reason for the sale was a change of workplace, a health issue or an unforeseeable event, Publication 523 allows a reduced exclusion. As a simple illustration, a single owner who lived in the home for 12 of the required 24 months before a qualifying job move could exclude about 12 ÷ 24 × $250,000 = $125,000. Publication 523 has the worksheet for the exact figure.
Periods when it wasn't your home
Publication 523 notes that, with exceptions, time after 2008 when the property was not your main residence is nonqualified use, and the gain allocated to that time can't be excluded. Converting a long-held rental into your home for 2 years before selling does not make the whole gain tax-free.
How to calculate your gain on a Florida home
Gain is the amount realized minus your adjusted basis (Publication 523).
Amount realized
The sale price minus selling expenses, such as real estate commission, the seller's doc stamps, title charges the seller pays and legal fees. Seller closing costs lower the gain dollar for dollar. The commission guide and the seller net proceeds calculator help you estimate them.
Adjusted basis
What you paid, plus certain purchase closing costs, plus the cost of improvements that add value or extend the home's life, such as a new roof, an addition or impact windows, minus items such as depreciation claimed and certain casualty loss deductions. Routine repairs and maintenance do not count. Keep receipts for every improvement: in a state where roofs and hurricane protection are major expenses, they can add tens of thousands to your basis.
Worked example: a married couple under the exclusion
| Line | Math | Amount |
|---|---|---|
| Sale price | $700,000 | |
| Selling costs | $42,000 commission + $4,900 deed stamps ($700,000 ÷ 100 × $0.70) | −$46,900 |
| Amount realized | $700,000 − $46,900 | $653,100 |
| Adjusted basis | $250,000 purchase + $30,000 new roof and windows | $280,000 |
| Gain | $653,100 − $280,000 | $373,100 |
| Exclusion (joint) | Up to $500,000 | −$373,100 |
| Taxable gain | $0 |
Worked example: the same sale by a single owner
A single owner with the same numbers excludes $250,000 and owes tax on $373,100 − $250,000 = $123,100. If her taxable income before the sale is $80,000, she has already used the 0% band ($49,450), so the whole gain sits in the 15% band: $123,100 × 15% = $18,465. If her modified adjusted gross income was $95,000 before the sale, the gain lifts it to $218,100, which is $18,100 over the $200,000 threshold, adding $18,100 × 3.8% = $687.80. Her total federal tax on the sale is about $19,152.80.
How much capital gains tax on $100,000 or $300,000?
These are illustrations using 2026 federal rules, not advice for your return. Each assumes a single filer and a property held more than one year.
$100,000 gain on a second home or rental
With $40,000 of other taxable income, the first $49,450 − $40,000 = $9,450 of gain is taxed at 0%, and the remaining $90,550 at 15% = $13,582.50. Total income stays under $200,000, so no 3.8% surtax. If the property was your main home for 2 of the last 5 years, the $100,000 is within the $250,000 exclusion and the tax is $0.
$300,000 gain on your main home
A single owner excludes $250,000 and is taxed on $50,000. At 15%, that is $7,500. A married couple filing jointly who both meet the tests owes $0.
$300,000 gain on an investment property
With $60,000 of other taxable income, the gain runs from $60,000 to $360,000 of taxable income, all inside the 15% band: $300,000 × 15% = $45,000. If modified adjusted gross income reaches $375,000, the surtax applies to the $175,000 above $200,000: $175,000 × 3.8% = $6,650. Total: $51,650, before any depreciation recapture at up to 25%.
$60,000 gain on a flip sold within a year
A short-term gain is ordinary income. For a single filer with $70,000 of other taxable income in 2026, tax on $70,000 is $10,112 and on $130,000 is $23,798, so the gain adds $13,686. Held for more than a year, the same gain would cost $60,000 × 15% = $9,000.
How to reduce or avoid capital gains tax on a Florida home
Meet the 2-out-of-5-year tests
If you are close to 24 months of ownership and use, waiting to close can be worth thousands. The dates that count are the closing dates, not the contract date.
Document every improvement
Each dollar of qualifying improvements raises your basis and cuts the gain. Permits, invoices and your purchase closing statement are the evidence.
Count every selling expense
Commission, deed stamps, title charges you pay as seller and attorney fees all reduce the amount realized.
Time the sale for a lower-income year
Because the 0% and 15% bands depend on total taxable income, selling in a year with less other income, such as the first year of retirement, can put more of the gain in a lower band.
Investment property: a 1031 exchange
A like-kind exchange can defer the gain on business or investment property, though not on a personal residence. Publication 523 explains how section 121 and section 1031 interact when a property was both a home and a rental. Use a qualified intermediary and a tax adviser, because the deadlines are strict.
Reporting the sale and foreign sellers
Form 1099-S
The closing agent may issue Form 1099-S. If you receive one, the IRS says you must report the sale even if the whole gain is excluded. Taxable sales go on Form 8949 and Schedule D, and you may need to make estimated tax payments for the quarter of the sale.
FIRPTA withholding for foreign sellers
When the seller is a foreign person, the buyer or settlement agent must generally withhold 15% of the amount realized under FIRPTA and send it to the IRS. On a $500,000 sale that is $75,000 held back at closing. The IRS describes reduced withholding when the buyer will use the home as a residence and the price is between $300,000 and $1 million, and an exception at $300,000 or less. The seller claims any excess back on a US tax return.
Inherited property
Publication 523 says an heir's basis is generally the fair market value on the date of death (or an alternate valuation date chosen by the estate), which often removes most of the gain. The inherited property guide covers the Florida side of that sale.
Common questions
How long do you have to own a house in Florida to avoid capital gains?+
To use the federal home sale exclusion, you must have owned the home and lived in it as your main residence for at least 24 months of the 5 years before the sale. That lets you exclude up to $250,000 of gain, or $500,000 for a married couple filing jointly. Florida adds no state capital gains tax, whatever the holding period.
How much capital gains tax on $300,000?+
On your main home, a single filer who meets the 2-year tests excludes $250,000 and pays 15% on $50,000, or $7,500; a married couple filing jointly pays nothing. On an investment property, a single filer with $60,000 of other taxable income pays about $45,000 at 15%, plus up to 3.8% net investment income tax on income over $200,000.
How do I avoid capital gains tax on the sale of my primary residence?+
Meet the ownership and use tests, 24 months each within the 5 years before the sale, and don't have used the exclusion in the prior 2 years. Keep records of improvements to raise your basis, and subtract selling costs such as commission and deed stamps. Gains above $250,000, or $500,000 jointly, are taxed at federal rates only, because Florida has no income tax.
How much capital gains tax do I pay on $100,000?+
If the property was your main home and you meet the 2-out-of-5-year tests, nothing: $100,000 is within the $250,000 exclusion. On a second home or rental held more than a year, a single filer with $40,000 of other taxable income in 2026 pays 0% on the first $9,450 and 15% on the rest, about $13,583.
Does Florida tax the sale of a house?+
Florida has no state income or capital gains tax on individuals, under Article VII, section 5 of the state constitution. The state does charge documentary stamp tax on the deed, 70 cents per $100 of the price ($0.60 in Miami-Dade), which the seller usually pays at closing. Property tax is prorated between buyer and seller on the closing statement.
Do I pay capital gains if I buy another house?+
Buying another home does not by itself defer federal tax on a gain from your main residence. The relief for a home is the $250,000/$500,000 exclusion. A 1031 exchange can defer gain only on investment or business property. In Florida, portability lets you carry your Save Our Homes property tax benefit to the next home, which is a separate, state property tax benefit.
Sources
- Florida Constitution: Article VII, section 5, estate, inheritance and income taxes
- IRS: Topic no. 409, capital gains and losses
- IRS: Topic no. 701, sale of your home
- IRS: Publication 523, Selling Your Home
- IRS: Revenue Procedure 2025-32, 2026 inflation-adjusted items
- IRS: Topic no. 559, net investment income tax
- IRS: FIRPTA withholding
- Florida Department of Revenue: Documentary stamp tax