Will I owe taxes when I sell my Florida home?

Good news first: Florida has no state income tax and no state capital gains tax. But the federal capital gains rules still apply when you sell, and they trip up a lot of sellers — especially those who’ve owned a long time or are selling a second home.

This is general education, not tax advice. Talk to a CPA about your specific situation.

The primary-residence exclusion

If the home was your primary residence, the IRS lets most sellers exclude a large chunk of the gain from federal tax:

• $250,000 of gain if you file single
• $500,000 of gain if you’re married filing jointly

To qualify, you generally must have owned and lived in the home for at least 2 of the last 5 years before the sale. You typically can’t use the exclusion more than once every two years.

What counts as “gain”?

Gain isn’t your sale price — it’s roughly:

Sale price − selling costs − your cost basis

Your cost basis is what you paid plus major improvements (a new roof, an addition, impact windows, a pool). Keep those receipts — improvements raise your basis and lower your taxable gain. Routine repairs don’t count.

Where sellers get surprised

• Second homes and investment properties don’t get the exclusion. A vacation condo or rental is fully taxable on the gain (though a 1031 exchange may defer it for investment property).
• Long-time owners can exceed the exclusion. If you bought decades ago and the gain is above $250k/$500k, the excess is taxed as a long-term capital gain federally.
• Foreign sellers face FIRPTA withholding. If you’re not a U.S. person, the buyer generally must withhold 15% of the sale price at closing under FIRPTA, which you reconcile when you file.
• Depreciation recapture applies if you ever rented the property.

The bottom line

For most people selling a Florida home they’ve lived in for a few years, the federal exclusion wipes out the tax entirely. The people who need to plan ahead are second-home owners, investors, foreign sellers, and very-long-term owners with large gains.

Have more questions? Browse our full FAQ library or get your free Florida Home Buying Guide.