Florida Capital Gains Tax: 2024 Guide
When you sell your primary residence in Florida, you won’t owe state capital gains tax because Florida has no state income tax. However, you'll still be responsible for federal capital gains tax on your profit, with rates ranging from 0-20% depending on your income level.
Capital gains are profits from selling real estate or other assets like stocks and bonds. After selling your home, these gains are added to your total annual income — meaning you must pay taxes on the profit you earn from the sale.
Understanding your federal obligations as a home seller in Florida is crucial to avoid penalties when tax season rolls around. Failing to report capital gains may result in significant fines, future tax audits, or fraud charges in some cases.
» JUMP TO: Florida capital gains tax | Factors impacting tax rates | Tax on secondary homes | Next steps
Does Florida have a capital gains tax?
Florida does not charge a state income or capital gains tax, so you won’t pay capital gains to the state if you sell your home in Florida. However, the federal capital gains tax on the profits from selling a property still applies.
Federal capital gains tax rates on homes are 0%, 15%, or 20%, depending on your income level, for long-term ownership (over one year). For short-term ownership (less than one year), the tax rate matches your federal income tax rate.
For example, this is what federal capital gains tax would be if you purchased your home for $300,000 and sold it for around the $400,000 average home cost in Florida, one year later:
Income | Tax rate (%) | Example tax on $100,000 |
|---|---|---|
$44,000 and under | 0% | $0 |
$44,000 – $429,000 | 15% | $15,000 |
$492,000+ | 20% | $20,000 |
Source: irs.gov | ||
Single homeowners who sell their primary residence may also qualify for a capital gains tax exclusion on up to $250,000 in profits on their home sale. This means you would only pay taxes on any gains over $250,000.[1]
Curious about your potential tax liability when selling? Use our home sale calculator to estimate your profits and see if you might owe capital gains taxes.
Factors impacting your capital gains tax
Your income level, filing status, and the time you lived in a home also affect your capital gains taxes when selling a property.
This is how long-term capital gains tax rates break down for married couples who file either jointly or separately:
Tax rate | Married filing jointly | Married filing separately |
|---|---|---|
0% | $89,000 or less | $45,000 or less |
15% | $89,000-554,000 | $45,000-277,000 |
20% | Over $554,000 | Over $277,000 |
You may also qualify for up to a $250,000 tax exclusion ($500,000 for married filing jointly) if your home is your primary residence for two out of the last five years of ownership.[1]
This exclusion could save you thousands in taxes because capital gains tax only applies to gains of over $250,000 or $500,000.
For example, if you're single, purchased your Florida home for $160,000 in 2010, and lived in it for at least two out of the last five years, you would only owe capital gains tax if you sell the home for more than $410,000. Any amount above this threshold would be subject to long-term capital gains tax rates.
What qualifies as a primary residence?
According to the IRS, a home is your primary residence if it's the address listed on your:
- US Postal Service addre
- Voter Registration Ca
- Federal and state tax retur
- Driver’s license or car registration
And if your home is near:
- Where you wo
- Where you bank
- The residence of one or more family members
- Recreational clubs or religious organizations of which you're a member
Florida capital gains tax on secondary homes
Capital gains taxes vary when it comes to flipping houses or selling rental or vacation homes.
Non-primary residences and investment properties fall under two capital gains tax classifications: long-term and short-term assets.[1]
- Long-term assets are properties you own for over one year and follow the same 0-20% capital gains tax rate you pay when selling a primary residence.
- Short-term assets are properties you own for less than one year. Capital gains tax on these properties is the same rate as your income tax bracket (12-37%) and rises with your income level.[4]
Capital gains tax example
Here’s how capital gains tax rates differ between long-term and short-term assets if you're part of the 24% federal income tax bracket – meaning you earned over $100,525 as a single filer, or $201,050 for married couples filing jointly:
Profit on home sale | Long-term capital gains (15%) | Short-term capital gains (24%) |
|---|---|---|
$50,000 | $7,500 | $12,000 |
$75,000 | $11,250 | $18,000 |
$100,000 | $15,000 | $24,000 |
$150,000 | $22,500 | $36,000 |
$200,000 | $30,000 | $48,000 |
How to save money on short-term capital gains tax
Paying more capital gains tax from selling a short-term property will affect your profits. But you can avoid the higher rates on these assets in a handful of ways:
- Hold onto your property for over one year to transition your property into the long-term asset category.
- Convert your secondary home into your primary residence to take advantage of the tax exclusion on capital gains.
- Utilize Opportunity Zones to defer capital gains taxes by investing your gains into low-income communities via Qualified Opportunity Funds.[5]
- Reinvest your gains with the 1031 exchange by replacing your property with a similar property of the same value to defer your capital gains until the new property sells.[6]
Next steps for Florida home sellers
Consult a trusted real estate agent before selling your home to maximize your profits and avoid high capital gains taxes.
Local realtors are well-versed in the local market and will help you time your sale for the lowest rate possible. They can also assess your property to see if it meets the primary residence qualifications and guide you through options like the 1031 exchange.
Quality real estate agents often work closely with tax professionals to help clients maximize profits from their home sales. If you have more tax-specific questions, don’t hesitate to ask your agent for recommendations on which tax professional you should meet with to save on taxes.
Clever Real Estate offers a free service that matches you with top local agents from name-brand brokerages like Century 21 and Keller Williams. It also pre-negotiates low listing fees for sellers: just 1.5% instead of the usual 2.5–3% rate. Get your free agent matches today!
IRS. "Topic no. 701, Sale of your home." Updated 04/16/2024.
IRS. "Topic no. 409, Capital gains and losses." Updated 01/30/2024.
IRS. "IRS provides tax inflation adjustments for tax year 2024." Updated 11/27/2023.
IRS. "Opportunity Zones." Updated 01/30/2024.