Capital Gains Tax in 2025: What Florida Investors Need to Know

Why This Matters

If you’re in Florida and thinking about selling stocks, a rental property, or even your home this year, you’ll want to know how capital gains tax affects your bottom line.

Here’s the good news: Florida doesn’t have its own state income tax. That means you only deal with the federal rules. The catch? Those federal rules can get tricky, and a small mistake can cost you big at tax time.

At Square Accounting, we’ve seen far too many Floridians surprised by a tax bill they didn’t plan for. This guide is here to help you avoid that.

Short-Term vs. Long-Term: The Big Divide

Think of this as a “patience bonus.”

• Sell an investment within a year → It’s short-term and taxed like your regular income (which could be 10%–37%).

• Hold it over a year → It’s long-term and taxed at 0%, 15%, or 20%, depending on your income.

👉 Waiting just one extra day beyond 12 months could cut your tax rate in half.

Florida’s Advantage in 2025

Since Florida has no state tax, you only pay federal capital gains tax. Here’s what that looks like this year:

• Many middle-income investors fall into the 15% bracket.

• High earners may pay 20%, plus an extra 3.8% Net Investment Income Tax (NIIT) if income tops $200K (single) or $250K (married).

• Some lower-income filers may qualify for the 0% rate.

👉 Not sure where you land? That’s where we come in. Schedule a quick tax review and we’ll walk you through it in plain English.

Special Situations We See in Florida

• Selling your home? You may be able to exclude $250K ($500K for couples) from taxes if you lived there at least 2 of the last 5 years.

• Selling a rental? Be careful of depreciation recapture, which the IRS taxes at up to 25%.

• Selling art, coins, or collectibles? Those gains can be taxed at 28%.

• Selling a business? Qualified Small Business Stock (QSBS) might allow you to exclude part—or all—of your gain.

Smart Ways to Lower Your Tax Bill

Here are a few strategies our clients use:

• Tax-loss harvesting: Selling losing investments to cancel out some of your gains.

• Using retirement accounts: Gains in IRAs or 401(k)s can grow tax-deferred or tax-free.

• Timing the sale: Selling in a lower-income year could drop you into a lower bracket.

• Gifting assets: Passing investments to family members can reset cost basis and reduce taxes.

💡 Small moves like these can make a huge difference. We’ll show you how they apply to your unique situation.

What Changed for 2025

• The income brackets for the 0% and 15% rates got a little bigger thanks to inflation adjustments.

• The NIIT thresholds didn’t change, which means more people could get hit with that 3.8% surtax as incomes rise.

• Florida itself? Still no state tax—one of the reasons so many investors are moving here.

The Misconceptions We Hear All the Time

• “Florida has no capital gains tax, so I don’t owe anything.” → Wrong. You still owe federal tax.

• “All capital gains are taxed at 20%.” → Nope. Most Floridians fall into the 15% bracket.

• “Selling my home will crush me in taxes.” → Not necessarily. The home sale exclusion is one of the biggest tax breaks available.

Client Story: How One Florida Investor Saved $18,000 in Taxes

Last year, one of our clients in Miami sold a rental property he had owned for 12 years. He was excited about the profit, but worried about the tax bill—especially the depreciation recapture he had heard about.

At first glance, it looked like he would owe nearly $42,000 in federal taxes. But after we carefully applied the home sale exclusion for part of his living history, harvested losses from underperforming stock in his portfolio, and timed the sale for a lower-income year, we were able to cut his tax bill by nearly $18,000.

His words after we showed him the final return?

“I thought capital gains were just a flat 20% and I’d have no way around it. You showed me I had options—and that changed everything.”

👉 This is why we always say: Don’t sell before you plan. Book a strategy call and let’s make sure you keep more of your profits.

Final Thoughts

Capital gains tax isn’t something you should figure out the week before filing your return. The way you plan your sales—especially real estate and large investments—can save you thousands.

At Square Accounting, we specialize in helping Floridians make smart, tax-efficient moves all year long.

👉 Want to know your exact 2025 tax exposure before you sell? Book a free 30-minute capital gains strategy call.
👉 Want a quick checklist you can use before you sell an investment? Download our 2025 Florida Capital Gains Guide.
👉 Prefer bite-sized tax updates? Join our newsletter for monthly tips built for Florida investors.

Let’s make sure more of your money stays where it belongs—with you.

SEO-Optimized FAQs: Capital Gains Tax in Florida (2025)

Q1. Does Florida have a capital gains tax in 2025?
No. Florida does not impose a state capital gains tax. However, Florida residents must still pay federal capital gains tax, which ranges from 0% to 20% depending on income, plus the potential 3.8% Net Investment Income Tax (NIIT) for high earners.

Q2. What is the capital gains tax rate for selling a house in Florida?
If it’s your primary residence, you may exclude up to $250,000 of gains if single or $500,000 if married filing jointly—provided you’ve lived in the home for 2 of the last 5 years. Anything above that exclusion is taxed at federal long-term capital gains rates.

Q3. How do I avoid paying capital gains tax in Florida?
You can’t completely avoid federal capital gains tax, but strategies like tax-loss harvesting, using retirement accounts, timing your sales in lower-income years, and qualifying for the home sale exclusion can reduce or even eliminate your tax bill.

Q4. Do rental property sales in Florida get taxed differently?
Yes. Rental properties are subject to depreciation recapture, which is taxed up to 25%, in addition to regular capital gains tax on appreciation. Careful planning is essential to minimize this.

Q5. What is the Net Investment Income Tax (NIIT) and does it apply in Florida?
The NIIT is a 3.8% surtax on investment income (including capital gains) for individuals earning over $200,000 or couples over $250,000. It applies to Florida residents just like any other state since it’s a federal tax.

Q6. Should I report capital gains if I reinvest the money?
Yes. Reinvesting your gains does not exempt them from taxes. You must report the sale on Schedule D (Form 1040), even if the proceeds are reinvested immediately.

👉 Still unsure about your 2025 tax exposure? Contact Square Accounting and let us run a personalized capital gains analysis before you make your next move.