Property taxes in Florida vary by county and municipality, typically ranging from 0.83% to 1.2% of the assessed property value. Taxes are calculated based on the assessed value, which is determined by the county property appraiser.
Key Points:
Homestead Exemption: Florida residents may qualify for a $50,000 exemption on their primary residence, reducing taxable value.
Save Our Homes Cap: Limits annual property tax assessment increases to 3% for primary residences.
Non-Homestead Properties: Investment properties and second homes are subject to market-value assessments with a cap of 10% per year on increases.
When purchasing or selling real estate in Florida, a documentary stamp tax applies to the transaction. The rate is $0.70 per $100 of the sale price (except in Miami-Dade, where it’s $0.60 per $100 plus an additional surtax of 0.45% for non-homestead properties).
Example: On a $1,000,000 home purchase in Miami, the transfer tax would be around $7,000 (or $10,500 for non-homestead properties).
Although Florida has no state capital gains tax, federal capital gains taxes still apply when selling a property.
Short-Term Gains (held <1 year): Taxed as ordinary income (up to 37%).
Long-Term Gains (held >1 year): Taxed at 0%, 15%, or 20% depending on income level.
Foreign investors may also be subject to FIRPTA withholding (typically 15% of the sale price). Firpta can be avoided when properly structured with a C-corp.
If you generate rental income in Florida, you are subject to federal income tax and, in some cases, local rental taxes.
Short-Term Rentals (under 6 months): Subject to a 6% state sales tax and possible county tourist development taxes.
Long-Term Rentals: Exempt from state sales tax but taxable under federal law.
Florida does not impose a state estate tax, but non-U.S. citizens may be subject to federal estate tax (up to 40%) on U.S. assets valued over $60,000. Structuring real estate investments properly can help mitigate this.
Understanding real estate taxes in Florida is essential for making an informed investment. Whether you're a U.S. resident or an international buyer, our team at Globalty Investment can guide you through the process. Contact us today to explore tax-efficient investment strategies in Florida real estate!
