What Owning a Home in Florida Actually Did to Your 2025 Tax Bill
- Jordan Vreeland
- 10 hours ago
- 3 min read
If you bought a home in Florida in 2025, your first tax return as a homeowner looks different. Most people notice the mortgage interest deduction and stop there. That's one of at least six tax advantages available to Florida homeowners, and the combined impact is larger than most buyers expect.
If you're buying in 2026, knowing these before you close changes how you model the total cost of ownership. Here's the full list.
1. Mortgage Interest Deduction
You can deduct the interest paid on your mortgage if you itemize your federal deductions. On loans up to $750,000 (for mortgages originated after December 2017), all mortgage interest qualifies. In year one of a 30-year mortgage at 6.75%, that's roughly $26,500 in deductible interest on a $400,000 loan.
The deduction only saves you money if your total itemized deductions exceed the standard deduction ($30,000 for married couples filing jointly in 2026). For single filers on loans above $250,000, you'll likely clear it. For married couples, you usually need the mortgage interest plus property taxes plus other deductions to get past the threshold.
2. Property Tax Deduction
Property taxes are deductible as part of the SALT (state and local taxes) deduction, which is capped at $10,000 per return. Florida's property tax rates run about 1% to 1.5% of assessed value, lower than most states. On a $400,000 home assessed at full value, you're paying roughly $4,000 to $6,000 per year, and every dollar counts toward the SALT cap.
3. Florida Homestead Exemption
This isn't a federal deduction. It's a Florida benefit that reduces your property tax bill directly. If your home is your primary residence, you qualify for a $25,000 exemption on your home's assessed value, plus an additional $25,000 exemption on the value between $50,000 and $75,000 (this second exemption applies to all taxes except school district taxes).
You apply for the homestead exemption with your county property appraiser. The deadline is March 1 in the year following your purchase, meaning if you close in 2026, apply by March 1, 2027. Miss that deadline and you wait another year.
4. No Florida State Income Tax
Florida has no state income tax. That means every dollar you earn, salary, rental income, investment gains, is only taxed at the federal level. Buyers relocating from California, New York, or Illinois see the biggest difference because they're dropping a state tax bill that could run 5% to 13% of their income.
For homeowners, this matters particularly for rental income, capital gains on a home sale, and any freelance or business income earned from the property. What other states tax at the state level, Florida doesn't touch.
5. Capital Gains Exclusion When You Sell
If you've owned and lived in your home as your primary residence for at least two of the last five years, you can exclude up to $250,000 in capital gains from federal taxes when you sell ($500,000 for married couples filing jointly). This is not a deduction. It's a full exclusion.
In a market where Tampa home values have appreciated significantly over the past five years, this exclusion is worth real money, and it resets every time you meet the two-year residency requirement.
6. Mortgage Points Deduction
If you paid discount points to buy down your mortgage rate at closing, those points are generally deductible in the year you paid them (for a primary residence purchase). One point costs 1% of the loan amount. On a $400,000 loan, one point is $4,000, and it's deductible in the tax year you closed.
This is most relevant if you paid points to lock a lower rate. If your lender offered a rate reduction in exchange for upfront points, check whether you paid points on your Loan Estimate or Closing Disclosure.
What This Adds Up To for a 2026 Florida Buyer
Run the numbers on a $400,000 purchase at 6.75%, married couple filing jointly: roughly $26,500 in mortgage interest, $4,400 in property taxes, homestead exemption reducing next year's tax bill by $600 or more, no state income tax, and potential capital gains protection when you sell. Not every homeowner uses all six. But most use at least two or three without realizing there are more available.
If you're buying in 2026 and want to understand how these advantages apply to your specific numbers, we can walk through it. The calculation takes about 15 minutes.
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