Does Florida tax the gain on a home sale?
Not for individuals. The Florida Department of Revenue says Florida does not have an income tax for individuals and therefore no capital gains tax for individuals, citing Article VII, Section 5 of the Florida Constitution. Corporations are treated differently under Florida's corporate income tax.[3]
How does the federal $250,000/$500,000 exclusion work?
To qualify, you generally must pass two tests during the 5 years ending on the sale date: you owned the home for at least 24 months (the ownership test) and lived in it as your residence for at least 24 months (the use test). The two 24-month periods don't have to be the same.
On a joint return, either spouse can meet the ownership test, but both must meet the use test. You generally can't use the exclusion if you excluded gain from the sale of another home during the 2 years before this sale.
If you don't meet the tests, IRS Publication 523 allows a partial exclusion in some cases where the main reason for the sale was a work-related move, a health issue or an unforeseeable event.[1][2]
How is the gain figured and reported?
Gain is your amount realized — the selling price minus selling expenses such as commissions, advertising and legal fees — minus your adjusted basis, which starts with what you paid and includes money spent on improvements that added value. For an inherited home, basis is generally the fair market value on the date of the decedent's death.
If you receive Form 1099-S, you must report the sale even if the gain is fully excludable, using Schedule D and Form 8949 when required. Rental or business use of the home can change the result, so talk with a CPA about your situation.[1][2]
Key takeaways
- Individuals pay no Florida state capital gains tax because Florida has no personal income tax.
- As of 2026, the federal home-sale exclusion is up to $250,000, or $500,000 on a joint return.
- You generally need 2 years of ownership and 2 years of use as your main home within the 5 years before the sale.
- Selling expenses reduce your gain and improvements add to your basis, so keep the paperwork.
- Ask a CPA to review sales involving rental use, a short ownership period or an inherited home.
Sources
- [1]IRS — Topic no. 701, Sale of your home
- [2]IRS — Publication 523, Selling Your Home
- [3]Florida Department of Revenue — FAQ: Does Florida have a capital gains tax?
Reviewed October 11, 2026. General real-estate information for Florida, not legal, tax, lending or insurance advice. Laws, rates and deadlines change — confirm property-specific facts with the agency cited, a Florida real-estate attorney, CPA or licensed insurance agent.