How Much Tax Do I Pay When Selling Bare Land in Florida

When you sell bare land in Florida, the tax you'll pay depends on several factors, including how long you owned the property and your overall income. Florida itself has no state income tax, which is good news, but you'll still owe federal capital gains tax on any profit from the sale.

If you owned the land for more than one year, you'll pay long-term capital gains tax at rates of 0%, 15%, or 20%, depending on your taxable income. For 2024, single filers with income under $44,625 pay 0%, while those earning between $44,625 and $492,300 pay 15%. If you held the property for less than a year, short-term gains are taxed as ordinary income at your regular tax rate.

Your actual tax liability is calculated on the profit—the difference between your sale price and your adjusted cost basis (original purchase price plus improvements, minus any depreciation). If you inherited the land, you typically receive a stepped-up basis equal to the property's fair market value at the time of inheritance, which can significantly reduce your tax burden when you sell inherited land.

Additional considerations include the Net Investment Income Tax (3.8% for high earners) and potential recapture of depreciation if the land was used in a business. Selling costs like title fees, attorney fees, and commissions can be deducted from your gain.

If you're facing a substantial tax bill from selling vacant land, some property owners explore alternatives like owner financing arrangements, which can spread the gain over multiple years, or working with cash land buyers who can close quickly to meet specific timing needs. A qualified tax professional familiar with Florida real estate transactions can provide personalized guidance based on your specific situation, help you understand available deductions, and potentially identify strategies to minimize your tax liability legally.

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