Capital Gains Tax When Selling a House in Florida (2026): What Miami Sellers Keep

Do you pay capital gains tax when you sell a house in Florida?

Florida has no state income tax, so there is no Florida capital gains tax on a home sale. The federal capital gains tax still applies. If the house was your main home for at least two of the last five years, you can exclude up to $250,000 of gain, or $500,000 if you are married filing jointly. Gain above that is taxed at 0%, 15% or 20%, and higher earners may also owe the 3.8% net investment income tax.

By Erika Schell, P.A. | September 2026

Key takeaways

• Florida charges no state capital gains tax, but federal capital gains tax applies to any gain above your exclusion.
• The primary residence exclusion is $250,000 per person or $500,000 per married couple, and it has not changed since 1997. Many long-time Miami owners now exceed it, so capital gains tax is a real line in their net sheet.
• Your capital gains tax is calculated on the net gain: sale price minus selling costs, minus what you paid and what you spent on improvements. Good records lower the bill.

Most of my sellers in Doral, Coral Gables and Pinecrest have owned their homes for a decade or more. In that time, many Miami luxury homes have doubled in value. That is great news until someone asks, “So how much of this do I actually keep?” I trained in finance before real estate, and this is the conversation I like to have before we set a list price, not after the contract is signed.

How the capital gains tax on a home sale is calculated

The IRS taxes your gain, not the sale price. The math has four steps:

1. Amount realized = sale price minus selling costs (commissions, title, closing costs, the seller-paid documentary stamp tax, and similar).
2. Adjusted basis = what you paid for the home, plus your buying costs, plus capital improvements (a new roof, an addition, a pool, impact windows, a full kitchen remodel). Routine repairs and maintenance do not count.
3. Gain = amount realized minus adjusted basis.
4. Taxable gain = gain minus your exclusion, if you qualify.

The step people skip is the second one. Every receipt for a real improvement adds to your basis and reduces your capital gains tax. If you have owned your home for 15 years, finding the invoices for the 2014 pool and the 2019 impact windows can be worth thousands of dollars.

The $250,000 / $500,000 home sale exclusion

Under Section 121 of the tax code, you can exclude gain on the sale of your main home if you pass two tests during the five years before the sale:

• Ownership: you owned the home for at least 24 months.
• Use: you lived in it as your main home for at least 24 months.

The 24 months do not have to be continuous, and you cannot have used the exclusion on another home in the previous two years. Married couples filing jointly get up to $500,000 if at least one spouse meets the ownership test and both meet the use test.

These limits have been the same since 1997 and are not indexed for inflation. Bills in Congress, such as the More Homes on the Market Act, would raise them, but none had become law when this article was published. Plan your sale on the rules in force today.

If you have to sell before the two years are up because of a job change, a health reason or certain unforeseen events, you may qualify for a partial exclusion. That calculation is specific to your situation, so it belongs with your CPA.

2026 federal capital gains tax rates

Gain on a home you owned for more than one year is long-term and taxed at these 2026 rates, based on your total taxable income:

• 0%: up to $49,450 (single) or $98,900 (married filing jointly).
• 15%: up to $545,500 (single) or $613,700 (married filing jointly).
• 20%: above those amounts.

On top of that, the 3.8% net investment income tax applies to the gain above your exclusion if your modified adjusted gross income is over $200,000 (single) or $250,000 (married filing jointly). Those thresholds are not indexed either. A home owned for one year or less is taxed at ordinary income rates.

A worked example: selling a Coral Gables home in 2026

A married couple bought a home in Coral Gables in 2012 for $900,000. Over the years they added a pool and impact windows and remodeled the kitchen, for $150,000 in capital improvements. They sell in 2026 for $2,400,000, with about $144,000 in selling costs.

• Amount realized: $2,400,000 − $144,000 = $2,256,000
• Adjusted basis: $900,000 + $150,000 = $1,050,000
• Gain: $1,206,000
• Minus the $500,000 exclusion: taxable gain of $706,000

Depending on their other income, most of that gain is taxed at 15% or 20%, plus 3.8% NIIT. The federal capital gains tax on this sale would land roughly between $133,000 and $168,000. Without the improvement receipts, the taxable gain would be $150,000 higher, which could add around $28,000 to $36,000 of tax. These are illustrative figures, not tax advice; your CPA runs the real numbers.

Rentals, second homes and investment property

A condo you rent out or a second home you only visit does not qualify for the main-home exclusion. The whole gain is taxable, and two more rules apply:

• Depreciation recapture. Depreciation you took, or could have taken, on a rental is taxed at up to 25% when you sell.
• Nonqualified use. If you turn a former rental into your home, part of the gain may still be taxable even after you meet the two-year rule.

For investment property, a 1031 exchange can defer the capital gains tax if you reinvest in like-kind property within strict deadlines. Our 1031 exchange timeline for Miami walks through the 45- and 180-day rules.

Selling a Florida home as a foreign owner

If the seller is a foreign person for U.S. tax purposes, the buyer must generally withhold 15% of the sale price under FIRPTA at closing. That is a prepayment, not the final tax. There are exceptions and reductions: no withholding if the price is $300,000 or less and the buyer will live in the home, and 10% if the price is up to $1 million and the buyer will live in it. A withholding certificate can reduce the amount when the actual tax will be lower. Our guide to FIRPTA for Miami sellers explains the process.

Five ways Miami sellers legally reduce capital gains tax

1. Document every capital improvement. Collect permits, contracts and invoices before you list.
2. Check the calendar. If you are a few months short of two years of ownership and use, waiting can unlock the full exclusion.
3. Time the sale around your income. A year with lower income can keep more of the gain in the 15% bracket and below the NIIT threshold.
4. Use a 1031 exchange for investment property, not for your main home.
5. Think about basis before gifting. Heirs generally receive a stepped-up basis; people who receive a gift during your life keep your original basis. That difference can be large, and an estate attorney should weigh in.

Capital gains tax is only one line of your net sheet. Our breakdown of the cost to sell a luxury home in Miami covers commissions, doc stamps and title, and the sellers guide covers pricing and preparation.

If you plan to buy another primary residence in Florida, see how homestead portability can carry your tax savings to the new home.

Frequently Asked Questions

Does Florida have a state capital gains tax on home sales?

No. Florida has no personal income tax, so there is no state tax on the gain from selling a home. Federal capital gains tax still applies to any gain above your exclusion.

How much can I make on a home sale without paying capital gains tax?

If the home was your main residence for at least two of the five years before the sale, you can exclude up to $250,000 of gain as a single filer or $500,000 as a married couple filing jointly.

Do I pay capital gains tax if I buy another house?

For a primary residence, yes. The old rule that let you roll gain into a new home ended in 1997. Today you use the exclusion instead. Deferral by reinvesting is only available for investment property through a 1031 exchange.

What counts as a capital improvement for my basis?

Improvements that add value or extend the life of the home, such as a new roof, additions, a pool, impact windows and doors, or a full kitchen or bathroom remodel. Repairs and routine maintenance do not count.

Is capital gains tax withheld at closing?

Not for U.S. sellers. You report the sale on your tax return, and the title company issues Form 1099-S. Foreign sellers are different: FIRPTA usually requires withholding at closing.

See your real number before you list

Before we talk list price, I prepare a seller net sheet that estimates your selling costs and shows your gain, so you and your CPA can see what you actually keep. Reach out through the contact page or call (786) 801-4442. I work in English and Spanish.

Lea esta guía en español: ganancia de capital al vender una casa en Florida.

About Erika Schell, P.A.
Erika Schell is a Luxury Certified REALTOR® with The Keyes Company, affiliated with Forbes Global Properties, and an 8-time Top Producer at Keyes Doral serving buyers, sellers, and investors across Miami-Dade County. Florida Real Estate License #3366404. With a Master’s in Finance and more than 20 years of corporate experience, Erika brings the precision of a financial analyst to every luxury transaction. This article is general information, not tax or legal advice; confirm your situation with a CPA. Sources: IRS Topic 701, Sale of your home; IRS Topic 559, Net investment income tax; IRS, FIRPTA withholding.