1031 Exchanges in Florida: Rules, Taxes, Insurance, and the Long Arc

A Shop 1031 research page. Reviewed 2026-06-03. Every claim sourced; sources collected at the foot of the page.

Florida is a transfer-tax state, not an income-tax state. The distinction matters because most of the popular framing around a Florida 1031 starts at the absence of income tax and ends there, which is accurate as far as it goes and incomplete as a basis for closing-cost modeling. Florida has no personal income tax under Article VII, Section 5 of the Florida Constitution, which removes the state-level deferral question entirely. It also imposes documentary stamp tax on deeds, documentary stamp tax on the financing instrument, a separate one-time intangible tax on mortgage indebtedness, a constitutional cap on non-homestead assessed value (10 percent annually, school millage excepted) that runs alongside the homestead Save Our Homes cap, and a property insurance market in the middle of the largest depopulation of Citizens Property Insurance in twenty years following Hurricane Helene and Milton losses. Each of these is independently sourceable. Together they form the actual calculus a Florida exchanger should run.

This page is the working guide. The federal §1031 floor, the absence of a state income tax, the documentary stamp and intangible tax stack that shows up at every Florida closing, the Save Our Homes versus 10 percent non-homestead cap distinction, the Citizens depopulation context, the post-Helene-and-Milton commercial insurance picture, the demographic story from the 2025 Census release, and the unique considerations a Florida exchanger should clear before identifying replacement.

§1. 1031 mechanics in Florida

The federal floor applies in Florida the same way it applies in every other state. Internal Revenue Code §1031 permits the deferral of gain on the sale of real property held for productive use in a trade, business, or investment, provided the proceeds are reinvested into like-kind real property of equal or greater value through a Qualified Intermediary. Identification of replacement must occur within forty-five days of the relinquished closing; the replacement must close within one hundred eighty days of the same event. The authorities are 26 U.S.C. §1031 and the implementing regulations at 26 C.F.R. §1.1031(k)-1, with operating guidance in IRS Publication 544. ^{1 2 3}

Florida imposes no personal income tax and no individual capital gains tax. The constitutional prohibition is Article VII, Section 5 of the Florida Constitution. There is no state-level §1031 conformity question because there is no state income tax for the federal deferral to interact with. A Florida resident exchanging Florida real property for Florida replacement does the federal §1031 work and is finished with the state on the gain. Corporate income tax does apply to C corporations at a 5.5 percent rate under Chapter 220 of the Florida Statutes, but pass-through entities and individuals owe no state tax on the exchange gain. ⁴

The transactional cost in Florida is concentrated in the documentary stamp tax stack. Florida Statute §201.02 imposes a documentary stamp tax on deeds at $0.70 per $100 of consideration (or fraction thereof), payable at recording, in every county other than Miami-Dade. In Miami-Dade County, the rate is $0.60 per $100 on single-family residences and $0.60 per $100 plus a $0.45 per $100 surtax on any other property type, including investment real estate. On a $5,000,000 Florida commercial acquisition outside Miami-Dade, the deed doc stamp is $35,000; in Miami-Dade, the same acquisition produces a doc stamp of $52,500 (the $0.60 base plus the $0.45 surtax). The doc stamp is paid by the seller by custom in most Florida counties, by the buyer in some, and is negotiable in commercial contracts. ^{5 6}

Florida Statute §201.08 imposes a separate documentary stamp tax on the financing instrument at $0.35 per $100 of indebtedness, payable at recording. On the same $5,000,000 acquisition with $3,500,000 of new debt, the mortgage doc stamp is $12,250. Florida Statute §199.133 imposes a one-time nonrecurring intangible tax of $2.00 per $1,000 of secured indebtedness, payable at recording. On the same $3,500,000 mortgage, the intangible tax is $7,000. The two financing taxes are stacked, not alternative. Together with the deed doc stamp, the closing-cost overlay on a $5,000,000 financed Florida acquisition outside Miami-Dade runs roughly $54,250 in transfer and recording taxes before recording fees and title insurance. The economics belong in the offer price, not the closing statement. ^{7 8}

Florida imposes no state-level registration or bonding regime on Qualified Intermediaries. The federal §1031 rules apply. The buyer should confirm independently that the QI carries fidelity bonding and errors-and-omissions coverage proportionate to the transaction size; no Florida regulatory floor exists.

Closings in Florida are commonly handled by title companies and title-insurance underwriters operating under the supervision of Florida-licensed attorneys. Florida permits the title-and-escrow model and also permits attorney-supervised closings, with the latter common in the larger commercial transactions and the South Florida coastal markets. The Florida Real Estate Commission regulates licensed brokers; closing mechanics are not subject to a single statutory framework. ⁹

§2. Property tax in Florida

Florida has an effective property tax rate of approximately 0.79 percent on owner-occupied housing, placing it near the median among U.S. states. The structural mechanics are governed by the Florida Constitution, principally Article VII, Sections 4 and 6, and by Chapter 193 of the Florida Statutes (assessment and appraisal procedures). Florida property is reappraised annually to fair market value as of January 1 by the county property appraiser. The 1 percent base-rate cap that operates in California has no Florida analog. ¹⁰

The Save Our Homes amendment caps annual increases in assessed value at 3 percent or the Consumer Price Index, whichever is lower, for homesteaded property. The cap is codified at Florida Statute §193.155. For tax year 2025, the applicable Save Our Homes cap was 2.9 percent (CPI-driven). The cap resets to fair market value on a change of ownership, which means an exchanger acquiring Florida residential property that previously qualified for Save Our Homes will face a step-up to full market value at acquisition, with the cap then applying prospectively only if the new owner files for homestead. For investment property, Save Our Homes does not apply at all. ¹¹

The 10 percent non-homestead cap, approved as Amendment 1 in January 2008 and made permanent by voters in November 2018, limits annual increases in assessed value at 10 percent for non-homestead real property, including investment real estate. The cap is codified at Florida Statute §193.1554. There are two material exceptions. First, the cap does not apply to school district millage; the school district portion of the property tax bill (typically 35 to 45 percent of the total in Florida) is computed on the unadjusted just value. Second, the cap resets on a change of ownership or a qualifying change of use, which means an exchanger acquiring Florida non-homestead property will face a reset to full just value at acquisition. The cap is applied automatically without an application. For the exchanger, the cap operates as a brake on appreciation taxation during the hold period for the non-school portion of the tax bill, but is not relevant for closing-year math. ¹²

The administrative remedy is the Value Adjustment Board (VAB) under Chapter 194 of the Florida Statutes, which hears appeals of the county property appraiser’s just-value determination. The deadline for filing is typically 25 days after the TRIM (Truth in Millage) notice in August, and the process is active enough that institutional Florida commercial property owners routinely budget for VAB representation as a line item.

Harlow’s note on unit economics. On a $5,000,000 Florida commercial acquisition at the state-average effective rate, year-one property tax runs roughly $40,000. The school district portion compounds at market reappraisal each year; the non-school portion is capped at 10 percent annual growth on the assessed value under the non-homestead cap. Model the hold-period line as two streams: the school portion (uncapped, market-reappraised) and the non-school portion (10 percent annual cap until ownership change). VAB protest recovery in a typical year runs 5 to 10 percent on the protested base. The two-stream structure is the most commonly missed cross-state-replacement underwriting detail in Florida.

§3. Property insurance in Florida

The Florida property insurance market has undergone the largest structural reset in the country over the past four years, and the reset accelerated in 2025 following Hurricane Helene and Milton losses. Citizens Property Insurance Corporation, the state’s insurer of last resort, was the largest residential insurer in Florida from 2022 through mid-2025. As of November 2025, Citizens was no longer the largest residential insurer, having transferred more than 546,000 policies to private carriers through the depopulation program during 2025 alone. Citizens expected to end 2025 with roughly 400,000 to 430,000 policies in force, the lowest level in over twenty years. The September 2025 policy-in-force count was 768,926; the October 2025 depopulation transferred roughly 199,000 policies in a single month. ^{13 14}

The depopulation program operates under Florida Statute §627.3511 and Office of Insurance Regulation rules. Private insurers assume batches of Citizens policies, with policyholders receiving offers if the new premium is within 20 percent of the current Citizens rate. The macro effect is a private market that has re-entered the state with material reinsurance support, lower exposure concentration at Citizens, and ongoing premium movement. The micro effect for an exchanger acquiring Florida residential or small commercial property is that the carrier mix at acquisition may be meaningfully different from the carrier set at the OM publication date, and a current insurance quote should be obtained before identification. ¹⁵

For Florida commercial property specifically, the market relies on a combination of admitted carriers, excess and surplus lines, and specialty wind, flood, and named-storm carriers. The post-Helene and Milton 2024 loss experience has tightened deductibles, raised attachment points on named-storm coverage (now typically 2 to 5 percent of insured value for coastal properties), and increased the use of separate flood policies above the NFIP $500,000 commercial flood cap. The National Flood Insurance Program operates under FEMA Risk Rating 2.0, which has materially repriced coastal Florida flood premiums on a per-property basis since the 2021 rollout. An exchanger acquiring Florida coastal commercial property should obtain a binding quote covering wind, named storm, and flood before identification. ^{16 17}

Harlow’s note on unit economics. For a $5,000,000 Florida inland commercial property underwritten today, expect property-insurance expense in the range of 0.6 to 1.2 percent of insured value, or roughly $30,000 to $60,000 annually. For coastal Florida property (south Florida, the Tampa Bay area, the Panhandle, the Treasure Coast), the range can run materially higher (1.0 to 2.5 percent of insured value), and the underwriting risk is the named-storm deductible structure on top of the per-occurrence cap. Separate flood policies on commercial property above the NFIP cap are commonly an additional 0.1 to 0.3 percent of insured value. Bind from a quote, not a national-average assumption.

§4. Demographic trends

Florida’s population stood at approximately 23.0 million as of 2025 Census estimates, with positive net migration on both international and domestic axes. Net international migration into Florida was approximately 178,700 in 2025; net domestic migration was approximately 22,500. Florida was the second-most popular state for inbound moves nationwide, behind Texas, with the highest absolute concentration of inbound migration into the Miami-Dade, Tampa Bay, Jacksonville-Duval, and Central Florida MSAs. ^{18 19}

The metropolitan distribution is asymmetric. Miami-Dade County added 64,211 residents in 2025, the largest absolute county-level gain in Florida. Jacksonville crossed the one-million-population threshold in 2024, overtaking Miami as Florida’s largest city by population (Miami-Dade County remains the largest county). Port St. Lucie ranked as the fastest-growing city in the United States in 2025 per Census Bureau city-level estimates. Tampa, Orlando, and Jacksonville all posted positive growth at the city level, with Jacksonville adding 8,319 residents and Orlando adding 1,233 in the year ending July 1, 2025. ²⁰

Median household income in Florida was approximately $73,000 in 2024 per Federal Reserve-published Census American Community Survey estimates, with significant geographic concentration in the wealthy coastal submarkets (Palm Beach, Naples, Sarasota, Coral Gables, Bal Harbour) at multiples of the state median and significant clusters below the state median in rural North Florida and parts of the I-4 corridor. The Bureau of Economic Analysis reports Florida personal-income growth among the highest in the South, with the demographic composition skewing older than the national average. ^{21 22}

The major Florida metropolitan markets relevant to 1031 exchangers are Miami-Fort Lauderdale-West Palm Beach (approximately 6.2 million population), Tampa-St. Petersburg-Clearwater (approximately 3.3 million), Orlando-Kissimmee-Sanford (approximately 2.8 million), Jacksonville (approximately 1.7 million), and the smaller but rapidly growing Cape Coral-Fort Myers, Sarasota-Bradenton, and Lakeland markets. Each carries a distinct asset-class profile. South Florida concentrates institutional multifamily, office, and hospitality with the deepest international buyer pool in the country; Tampa Bay carries the broadest cap-rate range across multifamily and industrial; Orlando is the deepest hospitality market in the state; Jacksonville is the largest Florida industrial absorption corridor; the Southwest Florida markets carry the highest insurance overhead and the longest hurricane-recovery cycle.

§5. Unique legal and financial considerations

Several Florida-specific considerations sit outside the headline tax and insurance pictures, and each is worth surfacing before an exchanger identifies Florida replacement.

The first is the closing-cost reset that occurs when an exchanger acquires Florida property previously held by a homesteaded owner. The Save Our Homes assessment cap and any portability of accumulated SOH benefit do not transfer to the new owner. The just value resets at acquisition for the entire bill, not just the school district portion. The exchanger’s pro forma should reflect the reset, not the seller’s prior cap-protected number, and the reset is one of the most material gaps between a Florida seller’s pro forma and the buyer’s true year-one operating expense.

The second is the special tax district structure. Community Development Districts (CDDs) under Chapter 190 of the Florida Statutes, Municipal Service Taxing Units (MSTUs), and other special-purpose taxing authorities can layer materially on top of the county and school district millage. CDD assessments in particular are common in master-planned communities and in newer industrial parks in central Florida, and can add hundreds of dollars per door per year on multifamily and meaningful per-square-foot bond service on industrial. The TRIM notice discloses the special-district detail in August; due diligence should pull the trim and the special-district disclosure document before identification. ²³

The third is the absence of a residential commercial-property seller disclosure mandate. Florida common law (Johnson v. Davis, 480 So. 2d 625, Fla. 1985) imposes a duty on the seller of a residence to disclose facts materially affecting value that are not readily observable, but the doctrine does not extend in the same form to commercial property. Buyer-side due diligence carries the full weight. Environmental Phase I and II protocols under ASTM E1527-21 are standard for Florida commercial acquisitions, with particular attention to coastal saltwater intrusion, sinkhole disclosure, and prior-use contamination from agriculture (citrus, sugar, row crop) where applicable.

The fourth is the homestead vs. non-homestead cap distinction for an exchanger considering Florida residence. Florida homestead protection includes a constitutional creditor protection under Article X, Section 4 of the Florida Constitution, in addition to the Save Our Homes assessment cap. An exchanger contemplating relocation to Florida and homesteading should run the residence question with Florida-licensed counsel, as the asset-protection benefit interacts with §1031 deferral planning in non-obvious ways.

The fifth is the documentary stamp tax surtax in Miami-Dade County. The $0.45 per $100 surtax on non-single-family-residence property is the single largest local-option closing cost differential in the state and meaningfully affects the disposition-side economics on any Miami-Dade commercial transaction. Modeling the disposition without the surtax in Miami-Dade is a recurring source of avoidable surprise.

§6. Closing summary and the work ahead

The Florida 1031 exchanger is operating in a market with a clear set of distinguishing features. The federal floor applies; there is no state income tax and therefore no state-level deferral question; the documentary stamp tax on deeds, the separate documentary stamp tax on mortgages, and the nonrecurring intangible tax on mortgages stack at every financed closing; Save Our Homes caps homestead assessments at 3 percent or CPI but does not apply to investment property; the 10 percent non-homestead cap applies to investment property but excludes the school millage portion of the bill; the insurance market is in the largest depopulation of Citizens in two decades, with private-market re-entry ongoing and post-Helene-and-Milton pricing still settling; demographic growth remains positive on both international and domestic axes with Miami-Dade leading and Jacksonville surpassing Miami as the largest city; commercial property transactions sit outside the residential disclosure regime; CDD and special-district assessments can layer materially on the headline millage; the Miami-Dade documentary stamp surtax adds 75 percent to the deed transfer cost for non-single-family property. None of these is a reason to avoid a Florida exchange. Each is a reason to underwrite one carefully. The jurisdiction-specific factors above are starting-point context. A state-experienced CRE professional will translate them into deal-specific judgment.

This is the question Shop 1031 was built to compress. Every Florida offering memorandum on the platform is normalized to a single schema, underwritten at re-let to the buyer’s specific equity, debt, and DSCR floor, and ranked by Dark Shell Score. The buyer searches a pre-cleared field rather than reading offering memoranda to disqualify them. For a market with Florida’s specific overlay, that compression is decisive because the variables that move outcomes (doc stamp and intangible tax stack, the assessment reset at acquisition, the non-homestead cap school-millage carve-out, named-storm deductible structure, CDD disclosure) are knowable in advance and frequently missed in conventional buy-side workflows.

This page is the working map. The actual exchange is run by people. A Florida-licensed real estate attorney, a Florida-licensed CPA familiar with §1031, a Qualified Intermediary, and a CRE professional who knows this market and these properties. Shop 1031 is the analytics layer that triages which deals deserve your time. The professionals do the work.

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Shop 1031 is an independent analytics platform. We are not a brokerage, a law firm, a tax advisor, a lender, or a Qualified Intermediary. Every 1031 exchange should be reviewed by a state-licensed real estate attorney, a CPA familiar with IRC §1031, and a QI. Brokerage and advisory services, when used, are provided by independently licensed third parties under separate engagement. This page is research, not advice. The Florida-specific surfaces discussed (documentary stamp and intangible tax stack at recording, the just-value reset at acquisition and Save Our Homes non-portability, the 10 percent non-homestead cap and its school-millage exception, named-storm and flood binding on coastal property, Citizens depopulation and post-Helene-and-Milton private-market repricing, CDD and special-district disclosure) each carry material risk if mishandled and should be addressed with a Florida-licensed attorney, a Florida-licensed CPA, and a Qualified Intermediary before identification, not after.

Federal authority: 26 U.S.C. §1031; 26 C.F.R. §1.1031(k)-1; IRS Pub. 544.

Florida authority: Fla. Const. Art. VII §§ 4, 5, 6; Fla. Const. Art. X §4; Fla. Stat. §§ 201.02 (deed doc stamp), 201.08 (mortgage doc stamp), 199.133 (intangible tax), 193.155 (Save Our Homes), 193.1554 (10% non-homestead cap), Ch. 190 (CDDs), Ch. 194 (VAB), Ch. 220 (corporate income tax), Ch. 627 (insurance rates), §627.3511 (Citizens depopulation).

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