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Florida continues to be one of the most popular states to live in. In fact, hundreds of thousands of homes are sold in the state each year. This is easy to understand due to the great weather, and the fact that there is a ton to do and see in the state.
When selling a home in Florida, there is a lot to think about. You need to ensure you set the price, know the market, and even go over things like the pros of selling a house by an owner in Florida.
But before you sell any home (or buy one for that matter), it is also a good idea to familiarize yourself with the tax implications of doing so. If not, you could be on the hook for a lot of money you weren’t expecting. While the state has no income tax, that doesn’t mean everything is tax-free.
Florida Real Estate Taxes and Their Implications
In an effort to help you out, this article is going to go over the three types of real estate taxes to keep in mind if you buy or sell a home in Florida.
All homes in Florida are assessed a value on a yearly basis, and people will be responsible for paying property taxes based on this value. You can pay the amount once a year, or there is often the option to pay monthly. This tax is paid to the city you live in, and the amount will often change each and every year.
The property taxes you pay in this state go to schools, infrastructure, libraries, roads and so much more. So while it costs you, the money is going to a great cause and is helping to build the community and move it forward.
Capital Gains Tax
This tax is specifically for people when they sell their home in Florida. Capital gains tax is essentially the tax that you pay on the profit you received from selling your home. If you sell your home for more than you paid (and you have owned the home for at least a year), you will be taxed on the difference in most cases.
The amount that you actually pay can vary a bit, but is generally around 15% for most Florida residents, but can differ if you are not a legal resident of the USA. If you are going to sell in Florida, it is a good idea to reach out to a professional or do some research to get an idea of how much you can expect to pay, and how to pay it.
Tax on Rental Properties
Florida is a tourist hotspot, and gets a ton of visitors each and every year. All of these people need somewhere to stay, so many Floridians will rent out their home or apartment as a vacation home. If you make a profit renting out your space, you may be responsible for paying a federal tax based on the amount you made.
This rule also goes for people who make income from rental properties. There are many different intricacies and nuances to these rules, and potential breaks, so make sure you have an expert in your corner who can help and ensure you are paying the right taxes, if need be.
In conclusion, we hope that this article has been able to help you learn about the taxes relating to Florida real estate.