Avoid Tax Surprises When Selling a Vacant House in Florida

Selling a vacant house in Florida can feel like a fresh start, but if you’re not careful, it can also come with unexpected tax bills. Whether you're moving, inheriting a property, or just cleaning up your real estate portfolio, it's important to understand how selling a vacant home can affect your taxes. Let’s break it all down in simple terms so you can avoid any surprises when tax season rolls around.

Why Taxes Matter When Selling Property

When you sell any home, especially one that’s vacant, you might have to pay capital gains tax. This is a tax on the profit you make from the sale. If you’re not living in the home (meaning it’s not your primary residence), you may not get the tax breaks that homeowners usually enjoy.

What Counts as a Vacant House?

Before we get into the taxes, let’s make sure we’re clear on what “vacant” means.

A Vacant House Is Usually:

• Unoccupied: No one is living in it, not even renters.

• Unused: It’s not your second home, vacation house, or business property.

• Unmaintained: Some vacant homes are left untouched, leading to faster deterioration.

Even if you’re checking in once in a while, if no one is living there full-time, it’s still considered vacant.

Common Tax Surprises You Might Face

Here are some of the top tax-related issues people run into when they sell a vacant house in Florida:

1. Capital Gains Tax

If you sell your home for more than you bought it, the IRS may want a cut of your profits.

• Short-term capital gains (if you owned the home for less than a year) are taxed like your regular income.

• Long-term capital gains (if owned for more than a year) usually have lower tax rates, but they still add up!

You might be thinking: “But I didn’t even live there!” That’s exactly the issue—vacant homes don’t qualify for certain exclusions.

2. No Primary Residence Exclusion

If the house was your main home for at least 2 of the last 5 years, you could exclude up to $250,000 of profit from taxes (or $500,000 if married). But with vacant houses, you don’t usually get this benefit.

3. State Taxes and Costs

Florida doesn’t have a state income tax (yay!), but you may still have to pay:

• Property taxes

• Documentary stamp taxes on the deed

• Real estate commissions

• Repair and staging costs (if you’re sprucing it up to sell)

4. Depreciation Recapture (If It Was Ever a Rental)

If you rented the home out before it became vacant, you likely claimed depreciation on your taxes. When you sell, the IRS wants that depreciation back—in the form of a tax.

Tips to Avoid Tax Trouble

Don’t let all this talk of taxes get you down. There are smart ways to sell without stressing.

Get Professional Advice

• Talk to a real estate tax advisor or CPA who understands Florida laws.

• Ask about how long you’ve owned the home and whether it was ever rented.

• Get help calculating your cost basis (what you paid, plus upgrades and fees).

Keep All Your Records

• Closing statements

• Home improvement receipts

• Insurance papers

These documents help prove your real costs and may lower your tax bill.

Consider a 1031 Exchange

If you plan to reinvest the money into another property, a 1031 exchange lets you defer taxes. But the rules are strict—talk to a professional before trying this route.

Middle Insight: Work With a Trusted Buyer

Sometimes, working with a trusted home-buying company can save you from a mountain of paperwork and tax headaches. A company like Connect Home Buyers can help walk you through the selling process and even offer a cash deal. This might reduce closing costs and speed things up—two things that help keep surprises to a minimum.

When You Might Owe More Than You Expect

Sometimes, people don’t realize that the sale of a house—even one that’s been sitting empty—can bump them into a higher tax bracket. This means you could owe more on your income taxes that year just because of the sale profit.

Other common situations include:

• Inherited homes with unclear value at time of inheritance

• Divorced owners splitting property

• Multiple owners who disagree on sale timing or profits

Conclusion: Sell Smart and Stay Informed

Selling a vacant house in Florida doesn’t have to be a tax nightmare. With a little planning and the right help, you can avoid most surprises and walk away with more money in your pocket. Don’t forget to talk to a tax professional, keep good records, and consider all your options before listing.

If you're looking for a stress-free sale, consider reaching out to Connect Home Buyers. Their team understands Florida’s real estate market and can help make sure you're not caught off guard by taxes or hidden costs.

Stay informed, stay organized—and you’ll sell smart every time.