Florida 1031 Exchange
Last reviewed: August 2026. Rules change. Verify before closing.
Florida 1031 Exchange: What It Defers, and What It Does Not
A 1031 exchange lets you sell an investment property and buy another without paying tax on the gain right away. The tax is deferred, not erased.
Florida charges no state income tax, so investors often assume an exchange matters less here. The federal bill says otherwise. Capital gains, depreciation recapture, and the net investment income tax together can take more than a quarter of your gain.
There is also one Florida tax an exchange does not touch, and most owners do not think about it until closing. We cover documentary stamp tax below.
A Florida 1031 exchange runs through a qualified intermediary. For most delayed exchanges, a qualified intermediary is the standard safe harbor used to hold the proceeds so you never receive or control them. We are attorney-owned and charge a flat $1,000.
Florida 1031 Exchange at a Glance
| Question | Florida answer |
|---|---|
| Does Florida conform to IRC 1031? | Not applicable for individuals. No personal income tax. |
| State tax on the gain | None for individuals. Corporate owners should check Florida corporate income tax. |
| Withholding at closing | None |
| Exchange exemption form | None |
| Claw-back or annual reporting | None |
| Transfer tax | Documentary stamp tax on deeds, 70 cents per $100. Miami-Dade differs. Not deferred by an exchange. |
| Identification deadline | 45 days (federal) |
| Completion deadline | Earlier of day 180 or your return due date with extensions (federal) |
| WealthBuilder flat fee | $1,000 |
What a Florida 1031 Exchange Costs
A standard delayed exchange costs a flat $1,000. You pay $750 at the sale closing and $250 at the replacement purchase closing. We take no percentage of your proceeds.
That fee covers your exchange documents and direct coordination with your title company, lender, and tax advisor. Reverse and improvement exchanges take more work, so we quote those individually.
Your funds sit in segregated accounts at an FDIC-insured institution, with deposit insurance coverage of up to $240 million per account. Every transaction requires dual authorization.
What a Florida 1031 Exchange Defers
Say you sell a Gulf coast rental for $1,000,000. You bought it for $600,000 and took $100,000 of depreciation. Your adjusted basis is $500,000, so your gain is $500,000.
| Tax | Maximum-rate illustration | Amount |
|---|---|---|
| Unrecaptured Section 1250 gain | up to $100,000 x 25% | $25,000 |
| Long-term capital gain | up to $400,000 x 20% | $80,000 |
| Net investment income tax | up to $500,000 x 3.8% | $19,000 |
| Florida income tax | none | $0 |
| Total potential tax | up to $124,000 |
This table shows a maximum-rate illustration, not a calculation of what any particular investor owes. Your rates depend on income, filing status, and basis. The net investment income tax applies based on your net investment income and modified adjusted gross income, so it may not reach the whole gain.
An exchange may defer all three federal layers. It does not defer the deed tax described next.
How Florida Taxes Your Property Sale
Individual income tax: none. Florida taxes neither income nor capital gains.
Withholding at closing: none. No exemption forms, no state certificates, no refund to wait for.
Conformity: not applicable for individuals. Florida takes no position on your exchange because it has no personal income tax to defer.
A qualifier for corporate owners. Florida does impose a corporate income and franchise tax. If you hold property through a C corporation or an entity taxed as one, Florida consequences can follow federal recognition rules. Individuals and most pass-throughs will not see this. Ask your CPA if you are unsure which describes you.
The Florida Tax an Exchange Does Not Defer
Florida charges documentary stamp tax on deeds. The rate is 70 cents per $100 of consideration in every county except Miami-Dade, which charges 60 cents per $100 plus a 45-cent surtax that does not apply to single-family dwellings.
On a $1,000,000 sale, that is roughly $7,000 in most of the state. A 1031 exchange defers income tax. It does nothing about deed stamps.
Reverse and improvement exchanges need a transfer tax review before closing. Those structures can involve an exchange accommodation titleholder taking title and later conveying it to you, which introduces additional deeds. Whether each deed carries documentary stamp tax depends on how the transaction is structured and documented, and the analysis is fact-specific.
That review belongs at the front of the deal, not after a deed is recorded. We raise it on every Florida reverse exchange we handle and coordinate it with your closing agent and tax advisor.
When Another State Is Involved
Florida's tax status makes it a destination, which means most exchanges here start somewhere else.
Selling elsewhere, buying in Florida. The selling state's rules control that closing, including any withholding and exemption forms.
Bringing deferred gain into Florida. Florida does not erase what you owe another state. Exchange out of California, Oregon, Montana, or Massachusetts and that state can still tax the deferred gain when you cash out. California requires an annual Form FTB 3840 for as long as you hold the replacement property, even after you move.
Selling in Florida, buying in a tax state. Florida takes no income tax now, but the new state's rules govern your eventual sale there.
The Federal Rules That Do Not Change
You have 45 days from the day your sale closes to identify replacement property in writing. The identification must be signed and must describe the property unambiguously.
Deliver it to your qualified intermediary or another permitted party involved in the exchange. Do not assume that sending it only to your own attorney, accountant, broker, or agent satisfies the rule. Many of those advisors are disqualified recipients because of their relationship to you.
Three rules govern how much you may identify. Under the three-property rule, you may identify up to three properties at any value. Under the 200% rule, you may identify any number of properties as long as their combined fair market value does not exceed 200% of what you sold. Under the 95% rule, you may exceed both limits only if you actually acquire at least 95% of the value you identified.
Most investors use the three-property rule. Identify more than you need, then close on the one that works.
You generally have 180 days from the sale closing to acquire replacement property. The actual deadline is the earlier of day 180 or the due date of your federal income tax return for the year of the sale, including extensions.
Filing your return early does not shorten the exchange period. Failing to extend it can. If your normal return due date arrives before day 180, file an extension before that due date. The IRS also grants limited deadline relief after presidentially declared disasters.
Florida Property That Qualifies for a 1031 Exchange
We act as qualified intermediary across Florida investment real estate. That includes multifamily and apartments, vacation and short-term rentals held for investment, retail and shopping centers. It also covers office and medical office, industrial and warehouse, self-storage, single-tenant net-lease, hospitality, mixed-use, and investment land.
Property held for investment or business use generally qualifies. Primary residences and properties bought to flip generally do not.
Short-term rentals deserve a word. A vacation property can qualify if you hold it for investment and keep your personal use inside the IRS safe harbor. Under that safe harbor the property generally must be rented at a fair market rent for at least 14 days in each of the two relevant 12-month periods, and your personal use must not exceed the greater of 14 days or 10% of the days it was rented. Heavy personal use puts the exchange at risk. Tell us how you use the property before we paper the transaction.
How to Start Your Florida 1031 Exchange
- Call 888-508-1901 before your sale closes. The exchange must exist before closing. Nobody can fix it afterward.
- We prepare your exchange agreement and coordinate with your closing team, so proceeds go straight to your segregated account.
- You identify within 45 days and close within the period described above. We track both dates with you.
- We release funds only for qualified replacement property, and we document the exchange.
Why Investors Choose WealthBuilder 1031
- Attorney-owned qualified intermediary
- Flat $1,000 standard delayed-exchange fee
- Segregated exchange accounts
- Dual authorization on every transaction
- Direct coordination with your title company, CPA, and attorney
- Deferred, reverse, improvement, and simultaneous exchanges
Florida 1031 Exchange Risks Worth Knowing
The deadlines do not bend. Florida adds no extensions.
Boot is still taxable. Cash out or unreplaced debt creates recognized gain, even with no state income tax in play.
Deed stamps are a cash cost at closing. Section 1031 does not defer documentary stamp tax. Reverse and improvement structures need advance review so the transaction does not create avoidable transfer tax exposure.
Personal use can disqualify a vacation rental. Document how the property was used.
Deferral is not forgiveness. The federal tax comes due when you sell without exchanging.
When a Florida 1031 Exchange May Not Be the Right Call
Deferring tax is not automatically the best outcome. An exchange may be wrong if the replacement property is a weaker investment than the cash, if you need the proceeds, if the gain is small relative to the friction, or if your estate plan already points toward a basis step-up.
WealthBuilder 1031 acts solely as your qualified intermediary. We do not provide tax, legal, or investment advice, and we do not sell investments or securities.
1031 Exchange Activity Across Florida
Investors run exchanges across Florida, from Miami and Fort Lauderdale to Tampa, Orlando, and Jacksonville. Replacement property commonly includes multifamily, retail, industrial, and net-lease assets, along with Delaware Statutory Trust (DST) interests for investors who want a hands-off option.
Florida's metros attract investors nationwide, and a 1031 lets owners reinvest without triggering the federal tax on the sale. Wherever you reinvest, that state's rules apply to the new property, and we coordinate them.
Frequently Asked Questions
How much does a 1031 exchange cost in Florida?
A flat $1,000 for a standard delayed exchange, $750 at the sale closing and $250 at the purchase closing.
Does Florida tax 1031 exchanges?
For individual investors, no. Florida has no personal income tax, so there is no state income tax to defer and no state exchange filing. Corporate owners should check Florida corporate income and franchise tax.
Florida has no income tax. Is an exchange still worth it?
Yes. Federal capital gains, the net investment income tax, and depreciation recapture still apply. On a large gain that can preserve six figures.
Does a 1031 exchange avoid Florida documentary stamp tax?
No. Deed stamps apply at 70 cents per $100 of consideration outside Miami-Dade. An exchange defers income tax, not transfer tax. Reverse and improvement structures can involve additional deeds, and whether each one carries documentary stamp tax is fact-specific. We review it before closing.
Can I exchange a vacation rental?
Sometimes. It must be held for investment, and personal use must stay within the safe harbor. Tell us how you use it before closing.
I am selling up north and buying in Florida. Whose rules apply?
The selling state's rules control your closing. Once you own in Florida, Florida adds no income tax, though deed stamps apply to the purchase deed.
Do I still need a qualified intermediary?
For most delayed exchanges, a qualified intermediary is the standard structure used to keep you from receiving or controlling the sale proceeds. Other regulatory safe harbors exist, but a qualified intermediary is how the large majority of delayed real estate exchanges are handled. Touch the proceeds yourself and you lose the deferral, in any state.
Sources
- IRS, Like-Kind Exchanges, Real Estate Tax Tips
- IRS, Instructions for Form 8824
- 26 CFR 1.1031(k)-1, deferred exchanges
- IRS, Revenue Procedure 2008-16, vacation home safe harbor
- Florida Department of Revenue, Documentary Stamp Tax
1031 Exchange Services Across Florida
WealthBuilder 1031 serves real estate investors throughout Florida, including Altamonte Springs, Apopka, Ave Maria, Avon Park, Babson Park, Belleview, Boca Raton, Bradenton, Clearwater, Cocoa, Coral Gables, Cutler Bay, Dania Beach, Davie, Daytona Beach, Deerfield Beach, DeLand, Doral, Fort Lauderdale, Fort Myers, Fort Pierce, Gainesville, Graceville, Greenacres, Heathrow, Hialeah, Hobe Sound, Jacksonville, Key West, Kissimmee, Lake City, Lake Wales, Lake Worth, Lakeland, Largo, Lauderdale Lakes, Lauderhill, Leesburg, Madison, Maitland, Marianna, Melbourne, Miami Beach, Miami Gardens, Miami, Miramar, Naples, New Port Richey, Niceville, North Miami, Ocala, Orange Park, Orlando, Palatka, Palm Springs, Panama City, Pembroke Pines, Pensacola, Plantation, Saint Augustine, Saint Leo, Saint Petersburg, Sanford, Sarasota, St. Petersburg, Tallahassee, Tampa, Temple Terrace, Treasure Coast, Trinity, West Palm Beach, Weston, Winter Haven, and Winter Park.
Do not see your city? We serve investors statewide. Call 888-508-1901 to start your Florida exchange.
This page does not constitute legal or tax advice. Consult your attorney and tax advisor about your specific situation.
