Tax Implications of Selling Your Doral or Miami Home 2026

By Elizabeth Costa — Top Real Estate Agent in Doral, Florida | The Keyes Company
15+ years of experience · 300+ closed transactions · Bilingual: English & Spanish
Exclusive Member of Forbes Global Properties · Founding Member of Luxury Portfolio International

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The largest financial transaction most people make in their lifetime is selling a home. In Miami-Dade, that transaction typically involves six distinct tax categories: federal capital gains, Florida Save Our Homes portability, potential 1031 exchange for investors, FIRPTA for foreign sellers, Florida documentary stamp tax, and property tax proration. Understanding each category at a framework level helps you have the right conversations with your CPA and attorney before you list, not after you close.

I am Elizabeth Costa, a Realtor with The Keyes Company. This guide provides an educational framework covering the six tax categories most likely to affect Miami sellers, with references to authoritative sources for each. It is not tax advice, and every situation is individual. Please treat this as a starting point for your professional consultation, not a substitute for it.

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Federal Capital Gains Tax and the Primary Residence Exclusion

The most consequential tax category for most Miami sellers is federal capital gains on the sale of a primary residence. Under IRS Publication 523 (Selling Your Home) and Section 121 of the Internal Revenue Code, individual sellers may exclude up to $250,000 of gain from federal income tax, and married couples filing jointly may exclude up to $500,000, when they sell a home that has been their primary residence.

The three requirements for the exclusion

1. Ownership test. You must have owned the home for at least two of the five years immediately preceding the sale.

2. Use test. You must have used the home as your primary residence for at least two of the five years immediately preceding the sale. The two years do not need to be continuous.

3. Frequency limitation. You cannot have claimed the exclusion on another home sale within the two years immediately preceding the sale.

Married couples filing jointly qualify for the full $500,000 exclusion if either spouse meets the ownership test and both spouses meet the use test.

Calculating gain

Gain equals sale price minus selling expenses (Realtor commissions, closing costs, seller-paid concessions) minus adjusted basis. Adjusted basis is the original purchase price plus capital improvements over the ownership period minus any depreciation taken (relevant for prior rental use).

For a Miami home purchased at $700,000, sold for $1,200,000, with $80,000 in commissions and closing costs and $50,000 in documented capital improvements over ownership, gain calculation:

• Sale price: $1,200,000
• Minus selling expenses: $80,000
• Net sale price: $1,120,000
• Minus adjusted basis ($700,000 + $50,000): $750,000
• Gain: $370,000

A married couple filing jointly could exclude the full $370,000 under the $500,000 exclusion. A single filer could exclude $250,000 and would face capital gains tax on $120,000.

Federal capital gains rates (as of 2026)

Long-term capital gains rates apply to gain on property held over one year, taxed at 0 percent, 15 percent, or 20 percent depending on income bracket. Additional net investment income tax of 3.8 percent may apply for higher-income taxpayers. State income tax on capital gains does not apply in Florida (Florida has no state income tax). Confirm current rates and thresholds with your CPA, as they change with tax legislation.

Partial exclusion for hardship

Sellers who do not meet the full two-year requirements may qualify for a partial exclusion in specific hardship circumstances: change in employment, health reasons, or unforeseen circumstances (as defined by IRS regulations). Partial exclusion is calculated proportionally to the time you owned and used the property. Discuss with your CPA if this applies.

Investment property does not qualify

The Section 121 exclusion applies to primary residences only. Investment properties (rentals) do not qualify. If you have converted your primary residence to a rental within the last five years, or vice versa, the exclusion may be reduced or unavailable. See Section 1031 discussion below for investment property options.

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Florida Homestead: Save Our Homes Portability

Florida homeowners who claim homestead exemption benefit from the Save Our Homes assessment cap, which limits annual increases in assessed value to 3 percent or the change in Consumer Price Index (whichever is lower). Over years of ownership, this creates a meaningful difference between market value and assessed value. When you sell your Florida homestead and buy another Florida homestead, portability lets you transfer some of that accumulated benefit to your new property.

How portability works

Per the Florida Department of Revenue, homeowners may port up to $500,000 of the Save Our Homes benefit (the difference between market value and assessed value on the departing homestead) to a new Florida homestead. The portable amount reduces the assessed value of your new property, resulting in lower property tax on the new property.

Two porting scenarios

Upsizing (new home market value equal to or greater than old): You may port the full Save Our Homes benefit, up to $500,000.

Downsizing (new home market value less than old): You may port a proportional share of the benefit based on the ratio of new home market value to old home market value.

Timing requirement

You must establish homestead on the new Florida property within three years of abandoning homestead on the old property. Missing the three-year window forfeits the ability to port.

Application process

To claim portability, file Form DR-501T (Transfer of Homestead Assessment Difference) with the property appraiser in the county where your new homestead is located, together with your new homestead application (Form DR-501). Deadline is generally March 1 following your acquisition of the new home.

Miami-Dade specific

The Miami-Dade County Property Appraiser publishes portability information and forms at miamidade.gov/pa. Homeowners moving within Miami-Dade or between Florida counties should confirm application procedures with the property appraiser in the county of the new homestead.

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IRS Section 1031 Like-Kind Exchange (Investment Property Only)

For investment or business property (not primary residence), IRS Section 1031 allows deferral of capital gains through a like-kind exchange. This is one of the most commonly used tax deferral strategies for Miami real estate investors selling appreciated rental or investment property.

Core requirements

Property type: Both the relinquished property (what you sell) and the replacement property (what you buy) must be held for investment or productive use in a trade or business. Primary residences do not qualify. Since the Tax Cuts and Jobs Act of 2017, personal property is excluded and only real estate qualifies.

Like-kind: Real property held for investment is generally like-kind to any other real property held for investment. A rental condo can exchange for a rental single-family home, vacant land can exchange for a rental building, and so on.

Same taxpayer: The taxpayer selling the relinquished property must be the same taxpayer acquiring the replacement property.

Equal or greater value: The replacement property must be equal to or greater in value than the relinquished property to fully defer gain. Trading down produces taxable boot on the difference.

The 45-day and 180-day rules

45-day identification window: Within 45 days of selling the relinquished property, you must identify potential replacement properties in writing to your qualified intermediary. Rules governing identification (three-property rule, 200 percent rule, or 95 percent rule) determine how many properties you may identify.

180-day closing window: You must acquire the replacement property within 180 days of selling the relinquished property (or by the due date of your tax return for the year of sale, whichever is earlier).

Both deadlines are strict. Missing either disqualifies the exchange and triggers immediate taxable gain on the relinquished property.

Qualified intermediary requirement

You cannot receive the proceeds from the relinquished property sale directly. A qualified intermediary (QI) holds the proceeds and disburses them to acquire the replacement property. Choosing a reputable, insured QI is critical. Common Florida QIs include national companies and Florida-based specialists.

Common Miami investment 1031 applications

• Selling a Doral rental single-family home and exchanging into a Coral Gables rental condo
• Selling appreciated rental property and exchanging into a portfolio of smaller rentals
• Selling multiple rentals and consolidating into a single larger investment property
• Delaware Statutory Trust (DST) fractional replacement for investors preferring passive real estate exposure

Boot and partial exchanges

If you receive cash or debt relief exceeding the value of the replacement property, the difference is "boot" and is taxable in the year of sale. Partial exchanges allow some deferral and some current-year recognition, useful when investors want to extract some cash but defer tax on the remainder.

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FIRPTA: When the Seller is a Foreign Person

The Foreign Investment in Real Property Tax Act (FIRPTA) applies when the seller of US real estate is a foreign person. Under FIRPTA, the buyer is required to withhold a percentage of the gross sale price and remit it to the IRS as prepayment of the seller's US tax liability. This is highly relevant in Miami-Dade given the large share of international-owned property.

Standard withholding rates

Per the IRS FIRPTA guidance, standard withholding is 15 percent of the gross sale price when the seller is a foreign person. Reduced withholding applies in specific situations:

• 10 percent withholding when the sale price is between $300,000 and $1,000,000 and the buyer intends to use the property as a personal residence
• 0 percent withholding when the sale price is $300,000 or less and the buyer intends to use the property as a personal residence
• Reduced withholding certificate available in defined situations where actual tax liability is less than withholding amount

Reduced withholding certificate application

Foreign sellers whose actual US tax liability on the sale will be less than the standard 15 percent withholding may apply for a reduced withholding certificate (Form 8288-B) from the IRS. The application must be filed no later than the closing date. IRS review can take 90 days or longer. Sophisticated foreign seller transactions plan for this timeline months in advance.

Definitions and considerations

"Foreign person" includes nonresident individuals, foreign corporations, foreign partnerships, foreign trusts, and foreign estates. US resident aliens (green card holders and substantial presence test satisfiers) are generally not foreign persons for FIRPTA purposes. Determining foreign status can be complex for individuals with mixed residency history.

Domestic LLCs owned by foreign persons: FIRPTA generally applies based on the underlying beneficial ownership. Foreign persons using domestic LLC structures for real estate holding should consult qualified US tax counsel to understand FIRPTA treatment on sale.

For deeper coverage of transaction dynamics with international buyers on the reverse side (US sellers selling to international buyers), see Selling Your Miami Home to International or Cash Buyers.

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Florida Documentary Stamp Tax

Florida imposes documentary stamp tax on the transfer of real estate. Per the Florida Department of Revenue documentary stamp tax page, the tax rate is $0.70 per $100 of the total consideration paid for the property (rounded up to the nearest $100). This is a flat percentage regardless of ownership tenure.

Who pays

By Florida convention, the seller pays documentary stamp tax at closing. The tax is calculated on the total consideration (typically the sale price) and appears on the closing settlement statement.

Example calculations

• $500,000 sale: 5,000 units × $0.70 = $3,500 documentary stamp tax
• $1,500,000 sale: 15,000 units × $0.70 = $10,500 documentary stamp tax
• $3,000,000 sale: 30,000 units × $0.70 = $21,000 documentary stamp tax

Documentary stamp tax on the deed is separate from documentary stamp tax on mortgages and intangible tax on notes, which typically apply to the buyer's financing. Sellers generally deal only with the deed stamps.

Exemptions and reduced rates

Specific transaction structures (some intra-family transfers, certain corporate reorganizations, transfers pursuant to court order in specific situations) may qualify for reduced or exempt treatment. Confirm with your real estate attorney or title company if you believe your transaction may qualify.

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Property Tax Proration at Closing

Florida property tax is billed annually, typically in November, for the calendar year. When a property changes hands mid-year, property tax is prorated between seller and buyer based on the number of days each owned the property.

Standard proration convention

Florida convention typically uses the prior year's tax bill as the estimate for current-year proration. This is because the current year's tax bill has not been issued at time of closing for closings between January and October. The proration credits the buyer for the seller's ownership period.

Example

If annual property tax is $12,000 and the closing occurs June 30, the seller has owned the property for 181 of 365 days. The seller credits the buyer $12,000 × (181/365) = $5,948 at closing to cover the seller's ownership period. The buyer then pays the full $12,000 tax bill when it arrives in November.

Special assessments and CDD fees

Community Development District (CDD) fees, HOA assessments, and special assessments prorate on similar principles. Miami-Dade properties in CDDs (some Doral communities) or with active special assessments require careful proration analysis. Your closing statement itemizes each proration.

Assessed value versus market value

Florida property tax is based on the assessed value (not market value). Homesteaded properties benefit from the Save Our Homes cap, keeping assessed value below market for long-term owners. When ownership changes, the assessment resets to market value on the January 1 following the sale, potentially significantly increasing the annual tax bill for the new owner. This is a buyer consideration but relevant for sellers to understand when discussing carrying costs during listing.

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Timing Considerations for Tax Optimization

Three timing considerations affect tax outcomes for Miami sellers:

Long-term versus short-term capital gains

Property held over one year qualifies for long-term capital gains rates. Property held one year or less is taxed at ordinary income rates, which are typically substantially higher. Sellers approaching the one-year threshold may benefit from delaying the sale until the property qualifies for long-term treatment. Verify holding period start date with your CPA (typically the date of acquisition, not the date of contract).

Calendar year timing

Closing in the current tax year triggers current-year tax treatment. Closing in early January defers the tax event to the following year, providing an additional 12-15 months of tax deferral in some situations. This matters most for large gains where deferring recognition provides meaningful economic benefit. Discuss with your CPA if the sale is large enough to make timing meaningful.

1031 exchange coordination

For investment property sellers pursuing 1031 exchange, timing coordination is critical. The 45-day identification window starts on the closing date, so scheduling the closing to allow adequate time for identification and 180-day acquisition is essential. Some investors coordinate multiple sales in a specific sequence to allow identification and acquisition timing to work.

Homestead abandonment and re-establishment

For homestead portability, timing the sale of your old Florida homestead and establishment of your new Florida homestead affects your ability to port the Save Our Homes benefit. Three-year window applies from abandonment to re-establishment. Sellers moving out of state and back to Florida within three years may still qualify for portability if the paperwork is handled correctly.

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Working With Your CPA and Real Estate Attorney

Tax outcomes on a Miami home sale depend on details specific to your situation. A CPA and a Florida real estate attorney working together typically deliver better outcomes than either working alone. Here is how to structure their involvement:

CPA involvement should start before you list. Your CPA can model the tax outcome of the sale at different price points and closing dates, help you decide whether to pursue 1031 exchange for investment property, confirm homestead portability eligibility, and identify tax-optimization moves (timing, structure) that need to be executed before listing.

Real estate attorney involvement should start at or before contract. Your attorney reviews the sale contract, coordinates with your title company, handles closing document preparation, and coordinates with your CPA on tax-related contract terms (proration, seller concessions, closing date).

For 1031 exchanges, add a qualified intermediary. Choose a QI before the sale of the relinquished property. QI relationship must be established before closing so proceeds are received by the QI, not by you.

For international sellers subject to FIRPTA, add international tax counsel. Standard US CPAs may not be equipped for FIRPTA planning. If you are a foreign person selling US real estate, work with a US CPA experienced in international taxpayer matters.

Communicate as a team. Give your CPA and attorney permission to communicate directly with each other and with your Realtor. Tax decisions affect contract terms, and contract terms affect tax outcomes. Coordination beats isolation.

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Related Selling Research

• When to Sell in Doral & Miami: Reading Market Signals for Timing
• Pricing Your Doral or Miami Home: CMA vs Zillow Zestimate
• Preparing Your Doral or Miami Home for Luxury Listing
• Selling Your Miami Home to International or Cash Buyers
• Global Network Reach for Selling Doral & Miami Luxury
• Free Home Valuation for Your Doral or Miami Address
• Doral & Miami Sellers Guide 2026

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Frequently Asked Questions

How much capital gains tax will I pay when I sell my Miami home?

For a primary residence, the first $250,000 of gain (single filer) or $500,000 (married filing jointly) is excluded under IRS Section 121 if you meet the ownership and use tests (two of the last five years). Gain above the exclusion is taxed at federal long-term capital gains rates (0 percent, 15 percent, or 20 percent depending on income) if the property was held over one year. Florida has no state income tax on capital gains. Additional 3.8 percent net investment income tax may apply for higher-income taxpayers. Confirm specific calculation with your CPA.

Do I qualify for the primary residence capital gains exclusion?

To qualify for the full $250,000 (single) or $500,000 (married joint) exclusion, you must have owned the home for at least two of the five years preceding the sale, used the home as your primary residence for at least two of the five years preceding the sale, and not claimed the exclusion on another home sale in the two years preceding this sale. Partial exclusion may apply if you do not meet the full requirements due to change in employment, health reasons, or unforeseen circumstances. Confirm your specific situation with your CPA.

How does Florida homestead portability work?

When you sell your Florida homestead and buy another Florida homestead within three years, you may port up to $500,000 of your Save Our Homes benefit (the difference between market value and assessed value on your old homestead) to your new homestead. If upsizing, you port the full benefit. If downsizing, you port a proportional share based on the ratio of new market value to old market value. File Form DR-501T with the property appraiser in the county of your new homestead by March 1 following acquisition of the new home.

Can I use a 1031 exchange on my primary residence?

No. IRS Section 1031 like-kind exchanges apply only to investment or business property, not to primary residences. Primary residence sales are eligible for the Section 121 exclusion (up to $250,000 single or $500,000 married joint) but not for 1031 deferral. If you have converted a primary residence to a rental within recent years, or vice versa, consult your CPA about implications.

What are the deadlines for a 1031 exchange?

Two strict deadlines: within 45 days of selling the relinquished property, you must identify potential replacement properties in writing to your qualified intermediary. Within 180 days of selling the relinquished property (or by the due date of your tax return for the year of sale, whichever is earlier), you must acquire the replacement property. Both deadlines are strict, and missing either disqualifies the exchange. Choose a qualified intermediary before selling the relinquished property.

What is FIRPTA and does it apply to me?

The Foreign Investment in Real Property Tax Act (FIRPTA) applies when the seller of US real estate is a foreign person (nonresident individuals, foreign corporations, foreign partnerships, foreign trusts, foreign estates). Under FIRPTA, the buyer must withhold typically 15 percent of the gross sale price at closing as prepayment of the seller's US tax liability. Reduced withholding rates and certificates apply in specific situations. US resident aliens (green card holders, substantial presence test satisfiers) are generally not foreign persons for FIRPTA. Consult a US CPA experienced with international taxpayers if FIRPTA applies to you.

How much is Florida documentary stamp tax when I sell my home?

Florida documentary stamp tax on the deed is $0.70 per $100 of consideration paid for the property. For a $1,000,000 sale, that is $7,000. For a $2,500,000 sale, that is $17,500. By Florida convention, the seller pays. The tax appears on the closing settlement statement. Certain intra-family and reorganization transactions may qualify for reduced or exempt treatment; verify with your real estate attorney.

How is property tax prorated between seller and buyer?

Property tax is prorated based on the number of days each party owns the property during the tax year. Florida convention typically uses the prior year's tax bill as the estimate for current-year proration (because the current-year bill often has not been issued at closing). The seller credits the buyer for the seller's ownership period days at closing. The buyer then pays the full annual tax bill when it arrives in November. Special assessments, CDD fees, and HOA fees prorate on similar principles.

Should I sell in the current tax year or the next?

Depends on your specific situation. Closing in the current year triggers current-year tax treatment. Closing in early January defers the tax event to the following year, providing 12-15 months of tax deferral for gains. This matters most for large gains where deferral provides meaningful economic benefit. It also matters for holding period considerations (crossing the one-year threshold for long-term capital gains treatment). Discuss with your CPA whether current-year or next-year timing is better for your situation.

Who do I need on my team when selling with tax considerations?

Minimum team: a Realtor (marketing and transaction management), a CPA (tax planning and reporting), and a Florida real estate attorney (contract, title, closing). For 1031 exchanges, add a qualified intermediary. For international sellers subject to FIRPTA, add international tax counsel or a US CPA experienced with foreign taxpayers. Start CPA involvement before you list so tax-optimization moves can be executed before contract. Give team members permission to communicate directly with each other and your Realtor.

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Elizabeth Costa, Realtor — FL Lic. #3234205 Top Real Estate Agent in Doral, Florida | The Keyes Company ☎ (786) 949-3971 ✉ elizabethcosta@keyes.com 📅 Schedule a private consultation 15+ years · 300+ closed transactions · Bilingual EN/ES Office: 4191 NW 107th Ave, Doral, FL 33178 Serving Doral, Miami, Coral Gables, and Pinecrest The Keyes Company: Exclusive Member of Forbes Global Properties · Founding Member of Luxury Portfolio International This guide is educational only. Consult a licensed CPA and Florida real estate attorney for advice specific to your situation.