1031 Exchange in Florida (2026)

A 1031 exchange lets you sell investment real estate and defer the federal capital-gains and depreciation-recapture tax by buying like-kind real property through a qualified intermediary: identify replacements in writing within 45 days of closing the sale and close on them within 180 days (or your tax-return due date, if sooner). Florida has no state income tax, so an exchange into Florida defers the entire bill, and the 2026 law made no changes to Section 1031. The three numbers that matter on the way out: 20% federal long-term gain, 25% on unrecaptured depreciation, 3.8% net investment income tax where it applies. The number that matters on the way in is the yield of what you buy, which is the table below.

The rules, in one table

Rule	What it says	Where investors get caught
Like-kind	Real property held for investment or business use, exchanged for real property held the same way; any real estate for any real estate	A primary residence, a flip held for sale, or a partnership interest does not qualify
45 days	Identify replacement property in writing to the intermediary by midnight on day 45 after the relinquished closing	No extensions; weekends and holidays count
180 days	Close on the replacement by day 180, or by the due date of your return including extensions, whichever is first	A sale in November needs a filed extension or the window shrinks to April 15
Identification	Up to three properties of any value; or any number if their total value is under 200% of what you sold; or any number if you close on 95% of the identified value	Identifying four properties without meeting the 200% test voids the exchange
Qualified intermediary	A third party holds the proceeds; you never touch the cash. Cannot be anyone who was your agent, broker, attorney, accountant or employee in the prior two years	Your closing agent wiring proceeds to you, even for a day, ends the exchange
Boot	Cash you keep, debt you do not replace, and non-like-kind property received are taxable in the year of the exchange	Buying cheaper or with less debt creates taxable boot even if you reinvest every dollar of cash
Related party	Both sides hold for two years after an exchange with a related party	Selling to a family member's LLC inside two years unwinds the deferral
Florida	No state income tax on the gain, ever, for a Florida resident; documentary stamp tax of $0.70 per $100 on the deed still applies (Miami-Dade $0.60, plus a $0.45 surtax on property other than a single-family residence)	Out-of-state sellers still owe their home state on the deferred gain when they eventually sell for cash, depending on that state's clawback rules

Where the yield is: Florida counties by gross cap rate

An exchange defers the tax; it does not make a bad replacement good. These are the highest gross cap rates by county on current Zillow value and rent, each linking the county's investor page and live listings. Gross means before property tax (investors get no homestead cap; the non-homestead cap is 10% a year), insurance, vacancy and management.

County	Gross cap rate	Typical value	Typical rent	Rent, 1 yr	Active listings
Hendry	8.7%	$274,141	$1,989/mo	—	43
Jackson	8.0%	$183,076	$1,218/mo	—	12
Gadsden	7.9%	$201,883	$1,325/mo	—	79
Highlands	7.8%	$233,871	$1,513/mo	+1.2%	280
Citrus	7.7%	$272,870	$1,739/mo	+1.5%	961
Saint Lucie	7.6%	$373,341	$2,377/mo	+1.6%	—
De Soto	7.6%	$252,706	$1,600/mo	—	—
Charlotte	7.5%	$299,360	$1,863/mo	-0.8%	2,847
Polk	7.4%	$298,059	$1,847/mo	+1.1%	5,679
Putnam	7.4%	$220,059	$1,363/mo	+0.6%	413
Pasco	7.3%	$331,637	$2,025/mo	-0.0%	4,599
Escambia	7.1%	$282,520	$1,678/mo	+2.7%	570

Gross cap rate is annual Zillow Observed Rent (ZORI) against the Zillow Home Value Index for the county, before tax, insurance, vacancy and management; the full ranking shows all counties with the cost stack. Data through the latest Zillow release as of 2026-09-09; listing counts from our county pages, deemed reliable but not guaranteed.

How the timeline works with a Florida purchase contract

Write the replacement contract with the exchange disclosed and the closing date inside day 180 with room to spare; Florida title work, a condo association's document delivery, and the lender's project review on a condo (a full review on every conventional condo loan since August 2026) all consume calendar days you cannot get back. Identify a backup property. Have the intermediary engaged before the relinquished closing, not after, because proceeds that touch your account end the exchange.

The cost stack an exchanger into Florida underprices

Property tax resets to your purchase price the January after you buy and is assessed without a homestead exemption; homeowners insurance depends on roof age and wind zone more than on price; and the condo reserve rules that took effect in 2025 raise association fees on older buildings. Run the replacement through the investment property calculator, which pulls the county's real millage, Citizens premium and rent.

Questions exchangers ask

Can I do a 1031 exchange into Florida from another state?

Yes. Like-kind is any real property in the United States for any other, so a rental in New Jersey can be exchanged into a Florida rental. Florida has no state income tax, but some states (California among them) track deferred gain from property sold there and tax it when you eventually cash out; ask your CPA about your origin state.

What are the 1031 deadlines?

45 calendar days from the closing of the property you sold to identify replacements in writing, and 180 calendar days (or your tax-return due date including extensions, if earlier) to close. Both run concurrently from the same day; neither can be extended except by a federal disaster declaration.

How much tax does a 1031 defer?

The federal long-term capital-gains tax (15% or 20% depending on income), the 25% maximum rate on depreciation you have taken (unrecaptured Section 1250 gain), and the 3.8% net investment income tax where it applies. For a Florida resident there is no state layer. The deferral is indefinite and the basis steps up at death under current law.

Can I 1031 into a short-term rental or a vacation home in Florida?

Into a property held for investment, yes. A property you also use personally must meet the IRS test in Rev. Proc. 2008-16: rented at fair market value at least 14 days in each of the first two years, and personal use no more than 14 days or 10% of rented days in each year. Check the local short-term rental rules before you identify; Florida cities differ.

Can I exchange one property for several, or several for one?

Yes in both directions, subject to the identification rules: three properties of any value, or any number totaling under 200% of what you sold, or any number if you close on 95% of what you identified. Consolidating scattered rentals into a single Florida asset, or trading one appreciated property for two higher-yield ones, are the two common shapes.

What is a reverse 1031 exchange?

You buy the replacement first, parked with an exchange accommodation titleholder, then sell the relinquished property within 180 days. It solves the problem of a thin market where the property you want will not wait, at higher intermediary cost. Improvement exchanges use the same parking structure to build or renovate within the 180 days.

Did the 2025 tax law change 1031?

No. Section 1031 was left intact; the same law restored 100% bonus depreciation for qualified property acquired after January 19, 2025, which pairs with a cost-segregation study on the replacement property.