1031 exchange in
Florida.

Does Florida follow federal 1031 rules?

Florida imposes no state income tax on individuals, which makes it the single most popular 1031 replacement destination for sellers leaving New York, New Jersey, Massachusetts, and California. There is no state-level capital gains tax to defer or recognize, and no clawback. The friction lives at the closing table — documentary stamp tax of 70 cents per $100 statewide (60 cents in Miami-Dade plus a 45-cent surtax on non-single-family transfers), plus mortgage-note doc stamps and intangible tax on the loan side.

Florida capital gains tax structure

Florida has no state personal income tax. Federal 1031 treatment applies with no additional state income-tax friction on either the relinquished sale or the replacement purchase.

Florida has no personal income tax — full stop on the income side. The state generates revenue from a 6% sales tax (which does not apply to real estate transfers), a 5.5% corporate income tax (relevant if you hold through a C-corp, rare for 1031), and the documentary stamp tax. Documentary stamps run 70 cents per $100 of consideration on deeds statewide, except in Miami-Dade where the rate is 60 cents per $100 plus a 45-cent surtax on non-single-family transfers — which catches every commercial closing in the county. Mortgage-note documentary stamps add 35 cents per $100 of indebtedness, plus a 0.2% intangible tax on the loan amount. There is no inheritance or estate tax. Estimated tax payments are not applicable at the state level.

Federal tax treatment of a successful 1031 is deferral of capital gain and unrecaptured Section 1250 depreciation recapture (federally taxed at a maximum 25% when eventually recognized). Florida's state treatment sits on top of those federal rates.

Common 1031 replacement strategies in Florida

Florida is the largest single-state 1031 destination market and every product type trades. Miami and Fort Lauderdale see the most international and Northeast-money flow into Class A multifamily, condo-hotel, and trophy retail. Tampa and the I-4 corridor have been the most aggressive industrial absorption story in the Southeast since 2020 — credit-tenant logistics trading 5.0–6.0% caps on stabilized product. Orlando is hospitality plus build-to-rent multifamily plus a steady flow of medical-office acquisitions tied to the AdventHealth/Orlando Health expansion. Jacksonville is port-driven industrial (JAXPORT post-deepening) and value-add multifamily. Florida also has the unique condotel asset class — fractionalized hotel rooms with deed conveyance — which is acceptable 1031 replacement if structured as an investment but routinely fails the held-for-investment test when sponsors pitch it as personal use plus rental.

Top Florida CRE markets for 1031 buyers

Miami

The most international CRE market in the country and the highest-priced Florida metro. Class A urban multifamily (Brickell, Edgewater, Wynwood) trades 4.5–5.5% caps on stabilized product, with luxury condo and condo-hotel inventory that requires careful 1031 structuring to avoid personal-use disqualification. Miami-Dade's documentary stamp rate of $1.05 per $100 (60 cents base + 45-cent surtax on commercial) plus the property-insurance crisis means the all-in cost basis on a Miami coastal asset can run 200+ bps higher than the same product in Tampa.

Orlando

Hospitality, multifamily, and medical office anchor the Orlando 1031 market. The I-4 corridor trades 5.5–6.5% on stabilized garden-style multifamily, with build-to-rent product compressing further (5.0–5.75%) on credit-quality sponsors. Orlando's hotel inventory is the deepest in the Southeast — full-service, limited-service, and extended-stay all trade actively — but hospitality 1031 underwriting requires careful management-agreement structuring to avoid personal-property characterization issues.

Tampa

The most active industrial 1031 market in Florida and arguably one of the top five in the Southeast. Big-box logistics along I-4 and I-75 trades 5.25–6.25% for credit-tenant deals, with smaller-bay flex compressing to 6.0–7.0%. Tampa-St. Pete multifamily holds 5.5–6.5% on stabilized Class B/A- product, and the property-insurance crisis is comparatively less brutal here than in Miami because of the lower hurricane-deductible math inland.

Jacksonville

Port-driven industrial absorption (JAXPORT post-deepening), value-add multifamily, and a quietly active NNN retail market. Industrial trades 6.0–7.0% on stabilized credit-tenant single-tenant; multifamily holds 6.0–7.0% on Class B garden-style. Jacksonville is the most reasonably-priced of the major Florida metros for a 1031 buyer with a sub-$25M budget — broker depth is solid and exit timelines run faster than Tampa.

Fort Lauderdale

Marine-industrial, Class A multifamily, and credit-tenant retail trade actively. Cap rates run 50–100 bps wider than Miami for comparable product (5.0–6.0% on stabilized Class A multifamily). Broward County does not stack the Miami-Dade surtax, which is a meaningful closing-cost advantage on commercial transfers. Coastal insurance underwriting is the same nightmare as Miami; inland Plantation/Sunrise product is a more practical 1031 target.

St. Petersburg

Smaller, tighter market than Tampa across the bay, with a downtown multifamily story driven by a decade of in-migration and condo conversion activity. Class B/A- multifamily trades 5.5–6.5% on stabilized product. The St. Pete waterfront commercial inventory carries the same insurance underwriting issues as the rest of coastal Pinellas — not as severe as the Miami-Dade SFHA flood zones but a real budget line.

Local counsel, recording, and filing in Florida

Florida is a title-insurance state with active local title agents in every metro; closing customs vary materially between South Florida (attorney-driven, higher-touch) and the rest of the state (title-company-driven, more standardized). For Miami-Dade and Broward closings, retain a Florida-licensed real estate attorney for transfer-tax structuring and condominium-act compliance — those two counties have idiosyncratic recording requirements and the condotel asset class generates litigation. The Florida Bar's real-property section maintains a strong continuing-education program; most active CRE attorneys hold the Board Certified in Real Estate designation, which is a useful filter when hiring.

Recent developments in Florida

The 2023–2026 Florida property-insurance market is the dominant underwriting story for any coastal 1031 buyer. Citizens Property Insurance Corporation (the state-backed insurer of last resort) has grown to over a million policies as private carriers have pulled back; Demotech-rated carriers have failed at unprecedented rates; and reinsurance costs have made commercial coastal insurance either unobtainable or 3-5x more expensive than 2022 quotes. SB 2-A (2022) and subsequent reforms tightened plaintiff-attorney fee recovery and AOB abuse, but rate stabilization has been slow. If you're 1031-ing into a Florida coastal multifamily or hospitality asset, get a bindable insurance quote before identifying — not before closing.

Common mistakes in Florida 1031 exchanges

• Underwriting Florida insurance off a 2022 quote. Florida property insurance has repriced 200–500% on coastal commercial assets since 2022. Carriers have exited, Demotech ratings have collapsed for several writers, and Citizens depopulation programs are pushing policies back into a strained private market. If you're buying a 1031 Florida coastal multifamily or hospitality asset and your pro forma insurance line item is below $1,500-$2,000 per door, you have not gotten a current bindable quote. Get one before you identify the property — the deal can swing from 5.5% to 4.5% cap purely on insurance after closing.
• 1031-ing into a condotel without structuring for held-for-investment. Florida's condotel inventory is heavily marketed to 1031 buyers as 'investment property with personal use included.' Personal use breaks the 1031 held-for-investment test. The IRS has won cases against condotel buyers who claimed 1031 treatment but used the unit personally above the safe-harbor thresholds in Rev. Proc. 2008-16 (14 days or 10% of rented days). Structure the management agreement, document the rental program, and respect the personal-use limits — or skip the asset class.
• Forgetting Miami-Dade's documentary stamp surtax. Florida's statewide documentary stamp on deeds is 70 cents per $100. In Miami-Dade, the rate is 60 cents per $100 plus a 45-cent surtax on non-single-family transfers — for a combined $1.05 per $100 on every commercial deed. On a $10M Miami commercial upleg, that's $105,000 of pure transaction tax payable at closing, with no 1031 exemption. Out-of-state buyers used to Texas (no transfer tax) routinely under-budget Miami closings by six figures.

What to do if you're starting a Florida-source 1031

1. Engage a Qualified Intermediary before the downleg closes. Your QI cannot be a disqualified person (attorney, CPA, or real estate agent who has represented you in the last two years).
2. Confirm state conformance and any clawback or withholding filings with a Florida-licensed CPA.
3. Identify replacement property within 45 days in writing, delivered to your QI, under the Three-Property Rule or one of the alternative identification rules.
4. Close on replacement within 180 days of the downleg closing or by your federal tax-return due date (with extensions), whichever is earlier.
5. File Form 8824 with your federal return reporting the exchange. File any required Florida state forms for the year, including any clawback or withholding-exemption filings.

FAQ: 1031 exchanges in Florida

Can I 1031 into a Florida condotel and have it qualify?

Yes if structured correctly, no if you actually want to use it. A Florida condotel (a hotel-managed condominium unit with deeded ownership) qualifies as 1031 replacement only if held for investment — which means respecting the IRS personal-use safe harbor in Rev. Proc. 2008-16 (no more than 14 days personal use or 10% of rented days). Most condotel buyers hear 'investment property' from the sales pitch and then use it three weeks a year, which destroys the 1031 treatment. Structure the rental management agreement before identifying and document everything.

How is the Florida property insurance crisis affecting 1031 underwriting in 2026?

Materially. Coastal commercial premiums have repriced 200–500% since 2022, multiple Demotech-rated carriers have failed, and Citizens (the state-backed insurer of last resort) covers more than a million policies. For a 1031 buyer, the practical impact is twofold: (1) get a bindable insurance quote before identifying the replacement property, not before closing, because the deal economics can shift by 50–100 bps purely on insurance; and (2) underwrite the replacement assuming current market premium, not seller-provided historical premium. SB 2-A and subsequent reforms have helped, but rate stabilization is incomplete.

Does Florida's documentary stamp tax apply to a 1031 exchange?

Yes. Florida documentary stamps on deeds apply at the closing of every deed transfer regardless of 1031 status — there is no exchange exemption. The rate is 70 cents per $100 of consideration statewide, except in Miami-Dade where the rate is 60 cents per $100 plus a 45-cent surtax on non-single-family transfers ($1.05 per $100 combined on commercial). On a financed transaction, you also pay 35 cents per $100 mortgage doc stamps and 0.2% intangible tax on the loan amount. Budget all of it into your closing-cost model.

Can I 1031 a hurricane-damaged Florida property into clean replacement, or does the casualty trip up the exchange?

It depends on whether you're using a 1031 or invoking Section 1033 (involuntary conversion). If your Florida property was destroyed by hurricane and you received insurance proceeds, Section 1033 typically gives you 2–3 years to acquire similar replacement property without the 1031 timing constraints. If the property was damaged but is still standing and you're voluntarily selling, regular 1031 rules apply and the 45/180 clock controls. The two regimes do not stack — pick one path with a Florida CPA before closing.

Why is Florida the most popular 1031 destination state for Northeast and California sellers?

No state income tax. A New York seller trading into a Florida replacement defers federal capital gains via 1031 and never has Florida tax friction on the back end when the Florida replacement is eventually sold (assuming the seller is a Florida resident by then). A California seller faces California's clawback (FTB Form 3840) on the back end regardless, but the Florida replacement itself is income-tax-free during the hold. Add deep CRE inventory, large-metro liquidity, and warm-weather lifestyle migration, and Florida wins the gravitational pull contest.

Does Florida have non-resident real estate withholding?

No. Florida has no state income tax and no non-resident withholding regime. The closing-table friction is documentary stamp tax (70 cents per $100 statewide, $1.05 per $100 in Miami-Dade on commercial), not withholding. Out-of-state sellers do not need to file a Florida non-resident return for the gain.