Inherited Home Tax Implications for Sellers in Florida (2025 Guide)
When you inherit a Florida home, decisions arrive fast: documents, timelines, repairs, buyer certainty, and—of course—taxes. The good news is that Florida has no state income tax, and federal rules often provide a step-up in basis, which can dramatically reduce taxable gain. In this guide, you’ll learn how step-up works, which costs can increase basis, how federal capital gains and NIIT fit together, and how Florida’s documentary stamp tax (including Miami-Dade nuances) shows up on your settlement statement. Along the way, we’ll show examples, a calculator, and a clean 7-step plan so you can move from uncertainty to a predictable closing.
Editor: Local Home Buyers USA • Last updated Oct 4, 2025
Overview & Mindset: Clear Decisions Beat Perfect Timing
Inheriting a home blends emotions with logistics. Because details compound quickly, it helps to separate what you must do from what you might do. First, anchor your date-of-death value to establish basis. Next, list selling costs and adjustments you can include. Then, estimate federal capital gains exposure. Finally, account for Florida-specific items—doc stamps and property-tax proration. With that framework, you can compare a traditional listing to an as-is cash option and choose the path that protects both your net and your timeline.
Because time carries cost, your goal isn’t merely the highest price; it’s the best expected net on a schedule you can honor. That’s why, even as you aim for top value, you’ll manage inspection scope, appraisal expectations, HOA/condo estoppels, and municipal clearances. Anticipate each step, and closing turns into a checklist rather than a maze of surprises.
Step-Up in Basis: Core Concept
For most inherited real estate, federal rules provide a step-up in basis to fair market value (FMV) as of the decedent’s date of death (or the alternate valuation date if the estate elects it). Practically, this means your “cost” resets near market value on that day. Therefore, if you sell soon after inheriting—especially when markets are stable—your taxable gain may be minimal.
Document FMV the Right Way
- Retrospective appraisal (gold standard): licensed appraiser values the property as of the date of death. Keep the report with your records.
- Broker price opinion (BPO): a professional estimate from a local broker can add context; an appraisal carries more weight for tax files.
- Contemporaneous data: comparable sales around that date; include photos and condition notes to show state of the property.
Because documentation survives memory, store these items with estate papers, loan statements, HOA/condo docs, and insurance. Later, when you prepare your return, the paper trail shortens conversations and reduces friction.
Adjustments that Raise Basis (and Lower Gain)
After you establish the stepped-up basis, you can usually add certain selling expenses and qualified improvements to reduce gain. While rules have nuance, these categories are common:
Selling Costs
- Title/escrow/settlement fees
- Owner’s title policy (if seller-paid by local custom)
- Brokerage commissions
- Recording/service fees
- HOA/condo estoppel and transfer charges
- Florida documentary stamp tax on the deed
Improvements & Professional Fees
- Post-inheritance capital improvements you paid for (e.g., roof, HVAC, structural)
- Some legal/accounting fees directly tied to the sale (categorization matters)
- Repairs required for closing when they materially improve value or marketability
Because the line between “repair” and “improvement” can be fact-specific, retain invoices and label them clearly. Before filing, ask your tax professional to confirm where each item belongs. Meanwhile, keep estimates conservative; if the final return allows more, you win upside.
Federal Capital Gains & NIIT
Once you know your adjusted basis, potential gain equals sale price minus (basis + selling costs + allowed adjustments). Since inherited property is typically treated as long-term for capital-gains purposes, long-term brackets apply. Above certain incomes, the 3.8% Net Investment Income Tax (NIIT) can layer on. If you’re selling multiple assets this year, timing matters; sometimes staggering closings or deferring other transactions materially changes the after-tax result.
Primary Residence Exclusion?
Heirs often won’t qualify for the $250k/$500k exclusion because it requires ownership and use as a principal residence for two of the prior five years. If, however, you moved in and meet those tests, IRS Publication 523 explains how the exclusion may apply.
Planning for NIIT
NIIT depends on modified AGI, so large, one-time gains can nudge you over thresholds. Coordinate timing—especially if other sales or distributions are pending this year—to keep avoidable taxes from eroding your net.
Florida Items: Homestead, Doc Stamps & Property-Tax Proration
Homestead & Save Our Homes
Florida’s homestead exemption reduces property taxes for primary residences. If an heir makes the property their principal residence, apply with the county property appraiser (commonly by March 1). The Save Our Homes cap limits annual assessment increases on homesteads; portability may transfer some benefits to a new homestead if requirements are met. Deadlines vary by county, so check early.
Documentary Stamp Tax on Deeds (Key Rates)
- Most counties (non–Miami-Dade): $0.70 per $100 of consideration.
- Miami-Dade, single-family residence: $0.60 per $100 (no surtax).
- Miami-Dade, “other” property types: $0.60 + $0.45 surtax per $100 (total $1.05 per $100).
Customarily the seller pays deed doc stamps; however, the contract controls. Because “consideration” may include assumed debt, confirm payoffs and prorations with your title team early.
Property-Tax Proration
Florida property taxes are prorated to the day of closing. Typically, a decedent’s homestead exemption remains for the tax year of death, then reassessment follows. Buyers and heirs should expect future bills to change once the exemption resets or new homestead status is established.
Doc Stamp Dataset & Worked Examples
Numbers clarify decisions. Here’s a compact dataset of Florida deed doc stamp rates plus examples you can adapt. These figures also power the calculator below.
Leon County (Non–Miami-Dade) — $450,000
- Rate: $0.70 / $100
- Units: 450,000 ÷ 100 = 4,500
- Doc stamps: 4,500 × $0.70 = $3,150
Miami-Dade (SFR) — $450,000
- Rate: $0.60 / $100
- Units: 4,500
- Doc stamps: $2,700
Miami-Dade (Other) — $450,000
- Rate: $1.05 / $100 (base + surtax)
- Units: 4,500
- Doc stamps: $4,725
Hillsborough — $750,000
- Rate: $0.70 / $100
- Units: 7,500
- Doc stamps: $5,250
Method: consideration ÷ 100 × rate. Confirm current rates with the Florida Department of Revenue and your title company; negotiated splits can differ.
Probate, Title & Who Signs
Chain of title must be clean. During probate, the personal representative (PR) typically signs when authorized by the court or the will. After probate, deeds reflect the vesting outcome (e.g., to heirs or a trust). Meanwhile, your title/escrow team will coordinate lien searches, HOA/condo estoppels, and municipal checks (permits, fines). If there are multiple heirs across states, plan for notarization logistics and scheduling so the closing date stays intact.
Common Pace-Breakers
- Waiting on letters of administration or summary administration order
- Payoff statements and HOA/condo estoppels
- Open permits or code issues requiring sign-off
When a Cash Buyer Helps
If the property needs work, is tenant-occupied, or you’re remote, a vetted cash offer can compress timelines by removing financing uncertainty. Because time equals money, modeling expected value (EV) often reveals that a cleaner offer can out-net a “maybe higher” that drifts.
Timelines, Carry Costs & Expected Value
As you evaluate options, consider carry costs (taxes, insurance, utilities, HOA/condo dues) and failure risk. If a financed buyer requires repairs and delays appraisal, you could add weeks and new costs, diluting net. Conversely, if you can close quickly—even at a modest discount—you may save more in carry than the price difference. Compute EV as: headline price – likely credits – carry cost – failure probability × restart cost. Your time has value; EV keeps decisions anchored in outcomes, not hopes.
Florida Net/Gain Estimator
Use this planning tool to estimate gain and a rough net. Then, verify with your settlement statement and your tax professional.
This is an estimate, not advice. NIIT and bracket changes may apply. See IRS: Pub 523, Pub 559, Pub 544. Florida DOR: Doc stamp tax.
How-To: A 7-Step Plan for Heirs
- Assemble documents: will/trust, death certificate, letters of administration, loan statements, HOA/condo bylaws and estoppels, tax bills, insurance, utility accounts.
- Order valuation: get a retrospective appraisal for date of death; gather comps; photograph condition.
- Confirm title path: your title/escrow team traces vesting and authority; request lien, municipal, and association checks immediately.
- Choose listing vs. cash: model expected value including carry costs and failure risk; align decision with your timeline.
- Prep for closing: schedule repairs (if any), line up payoffs, clear open permits, set appraisal/inspection windows realistically.
- Review costs: verify doc stamps, title items, prorations, and credits early so the settlement statement matches expectations.
- Archive: keep the appraisal, settlement statement, invoices, and 1099-S with your tax files.
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FAQs
Do I owe Florida income tax on my gain?
No state individual income tax applies in Florida. Federal capital gains rules may apply based on your adjusted basis and sale price.
What if I sell below the date-of-death value?
If your net sale proceeds are below stepped-up basis (plus allowable costs/adjustments), you generally have no capital gain. Treatment of losses can be nuanced—speak with a tax professional.
Who typically pays the deed doc stamps?
Customarily the seller does in many counties, but contracts can allocate differently. Confirm early with your agent and title company.
Can multiple heirs sign remotely?
Yes, with proper notarization and coordination through title/escrow. Plan for scheduling lead time, especially across states or abroad.
How do homestead and Save Our Homes affect us?
Homestead can reduce taxes for a principal residence and cap assessments. After an inheritance, exemptions may change unless an eligible heir establishes homestead. County property appraisers publish deadlines and forms.
Authority Links (IRS & Florida DOR)
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We help Florida heirs and homeowners sell on their timeline—without repairs, open houses, or surprises. Our editorial team collaborates with local title professionals to keep guides practical and current. Nevertheless, this article is educational only; please seek professional advice for your specific situation.
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