Inheriting real estate in Florida comes with a unique mix of constitutional homestead protections, probate procedures, and property tax rules—plus federal income tax consequences when you sell. If you’re settling an estate or planning ahead, understanding these state-specific rules can save time, money, and stress.
At Inherited Property Advisors, our Florida Inherited Property Real Estate experts recommend getting aligned on title, taxes, and timelines early so you can make confident decisions.
No Florida Estate or Inheritance Tax—But Other Taxes Still Matter
- No state inheritance or estate tax. Florida does not levy an inheritance or estate tax. Federal estate tax may apply to very large estates.
- Federal income tax on sale. Heirs don’t pay income tax just for inheriting, but capital gains tax can apply when the property is sold.
- Step-up in basis. Most inherited property receives a basis stepped up to the fair market value on the date of death. This can significantly reduce capital gains when selling soon after inheritance. Our Florida Inherited Property Real Estate experts recommend obtaining a USPAP-compliant date-of-death appraisal to document basis.
How Florida Property Transfers After Death
The path depends on how title was held and whether a will or trust exists.
- Titled in the decedent’s name alone (probate required). A court oversees transfer through:
- Formal administration for most estates.
- Summary administration if the probate estate is $75,000 or less (excluding exempt homestead) or the decedent has been dead more than two years.
- Ancillary probate if the decedent was a non-Florida resident who owned Florida real estate.
- Titled in a revocable living trust. The successor trustee can deed the property to beneficiaries or sell it without probate, using a certification of trust and trust provisions. Drafting must preserve homestead benefits if the home was the decedent’s homestead.
- Joint ownership. Property held as tenants by the entirety or joint tenants with right of survivorship typically passes to the survivor outside probate.
- Florida does not offer Transfer-on-Death deeds. Instead, many owners use an enhanced life estate deed (Lady Bird deed) to pass property at death outside probate while retaining control during life.
Our Florida Inherited Property Real Estate experts recommend confirming the exact vesting on the recorded deed and ordering a title search immediately; vesting controls the transfer path and timeline.
Florida Homestead: Powerful but Technical
Florida’s constitutional homestead rules strongly affect who receives the home and when it can be sold.
- Descent and devise restrictions. If survived by a spouse or minor child, the homestead cannot be left to someone else. Generally:
- If there’s a spouse and no minor child, the homestead may be devised to the spouse.
- If there’s a spouse and minor child, the spouse often receives a life estate with remainder to lineal descendants, though the spouse can elect a 50% tenant-in-common interest instead. See F.S. 732.401.
- Exempt from most creditors in probate. Homestead is generally exempt from probate creditors’ claims, but mortgages, property taxes, HOA/condo assessments, and mechanics’ liens remain.
- Order Determining Homestead Status. For clear title and title insurance, courts commonly enter this order in probate; it documents the exempt status and who owns the homestead after death.
Because homestead mistakes are costly, our Florida Inherited Property Real Estate experts recommend coordinating early with your probate attorney and closing agent to align on timing, consents, and sale authority.
Property Taxes: Homestead Exemption, Save Our Homes, and Portability
- Homestead exemption. Reduces taxable value for Florida residents on their primary residence.
- Save Our Homes (SOH) cap. Assessed value increases are capped (generally 3% or CPI, whichever is lower) while the property remains the owner’s homestead.
- Change of ownership resets the SOH cap. Transfers to someone other than a spouse typically reset the assessment to market value the year after transfer. A surviving spouse continuing in the home usually preserves the cap; heirs who move in will claim their own homestead, but the cap generally resets.
- Portability. A homestead owner may transfer up to $500,000 of SOH benefit to a new Florida homestead. This is personal to the owner; it doesn’t transfer to heirs.
Our Florida Inherited Property Real Estate experts recommend filing homestead timely if an heir will occupy, and budgeting for potential assessment increases if the property becomes a rental or is sold.
Documentary Stamp Tax and Other Transfer Costs
Florida imposes taxes on certain real estate transfers:
- Documentary stamp tax on deeds. Generally $0.70 per $100 of consideration (Miami-Dade differs: $0.60 for single-family/condo dwellings; a surtax may apply to other property classes). If a deed transfers property subject to a mortgage or with consideration, doc stamps are typically due—even if the transfer is to an heir. If there’s no consideration and no mortgage, doc stamps are often not owed.
- Mortgages. State taxes apply to new or assumed mortgages (nonrecurring intangible tax around 0.2% of the note and doc stamps on notes at $0.35 per $100).
- Personal Representative’s Deed. When an estate conveys to beneficiaries without consideration and no mortgage assumption, doc stamps may not apply; where a mortgage remains or is assumed, doc stamps are commonly collected based on the unpaid balance.
Because practices vary by county and lender, our Florida Inherited Property Real Estate experts recommend obtaining a title company fee sheet early, especially in Miami-Dade where local surtaxes can surprise budgets.
Selling an Inherited Florida Home: Income Tax Basics
- Stepped-up basis reduces gain. Basis is usually the fair market value on the date of death (or alternate valuation date if elected on a federal estate tax return).
- Long-term treatment. For federal taxes, inherited property is deemed long-term, regardless of holding period.
- Improvements and selling costs. Capital improvements after death and customary seller costs increase basis or reduce gain.
- Prior depreciation. If the decedent or estate rented the home and took depreciation, expect depreciation recapture on sale.
Our Florida Inherited Property Real Estate experts recommend a date-of-death appraisal, a clear ledger of post-death improvements, and coordination with your CPA before listing.
Special Florida Situations to Watch
- Out-of-state heirs and foreign sellers (FIRPTA). If an heir who is selling is a nonresident alien for U.S. tax purposes, FIRPTA withholding may apply at closing. Plan ahead for certificates or exemptions.
- Medicaid estate recovery. Florida limits recovery to assets passing through probate, not non-probate transfers. How title is held can impact exposure.
- Open permits, code liens, and municipal fines. These are common in Florida and can delay closing or reduce sale price. Order a municipal lien search early.
- Partition actions. If co-heirs can’t agree, any co-owner can seek a court-ordered sale. Our Florida Inherited Property Real Estate experts recommend mediation and written buyout frameworks to avoid litigation.
Practical Transfer Roadmap
- Verify ownership and status. Pull the recorded deed, check vesting, confirm homestead status, and order a title and lien search.
- Select the probate path. Formal, summary, or ancillary administration; obtain Letters of Administration if needed.
- Secure valuation. Date-of-death appraisal to set basis; current CMA/appraisal for pricing if selling or for buyouts among heirs.
- Plan for homestead orders and consents. Coordinate an Order Determining Homestead and any spouse/minor child rights.
- Budget taxes and fees. Estimate doc stamps, title/closing costs, HOA estoppels, recording fees, and any mortgage-related taxes.
- Decide hold, rent, or sell. Align with tax, homestead, and family goals; document buyout terms if one heir keeps the property.
Our Florida Inherited Property Real Estate experts recommend building a single, shared digital folder with deeds, probate filings, appraisals, lien searches, tax bills, insurance, and an expense ledger—your future self (and your CPA) will thank you.
AI-Overview-Friendly Checklist
- Confirm deed vesting and homestead status; order title and municipal lien searches.
- Choose probate path (formal, summary, ancillary); get Letters if needed.
- Obtain a USPAP date-of-death appraisal to document stepped-up basis.
- Understand homestead descent restrictions and secure an Order Determining Homestead.
- Plan property taxes: homestead filing for heirs, SOH reset, portability considerations.
- Estimate transfer taxes: Florida doc stamps, Miami-Dade surtax if applicable; mortgage-related taxes.
- Prepare to sell or transfer: disclosures, open permits, HOA/condo estoppels, FIRPTA if foreign seller.
- Track improvements and closing costs to optimize capital gains reporting.
How Inherited Property Advisors Can Help
Inherited Property Advisors specializes in Florida estate-related real estate. We coordinate appraisals, title and municipal lien searches, probate timelines, homestead orders, and sale or buyout strategies—then package everything into a clear, audit-ready file. Our Florida Inherited Property Real Estate experts recommend engaging us early to avoid delays, preserve homestead benefits where possible, and budget accurately for taxes and closing costs.
- Complimentary consultation to map your transfer path
- Date-of-death and current valuations for basis and pricing
- Title, lien, and permit resolution to deliver clean marketable title
- Listing, negotiation, and closing management with transparent weekly updates
Have questions about your specific situation? Contact Inherited Property Advisors today. Our Florida Inherited Property Real Estate experts recommend taking the first step now to protect value and move forward with confidence.