Selling Inherited Property in Florida

Selling a property you inherited is often one of the most time-sensitive and emotionally charged parts of settling a Florida estate. There are mortgage payments to keep up, property taxes coming due, and beneficiaries who may need the proceeds. But before the property can be listed or sold, certain legal steps must happen — and in Florida, homestead property comes with rules that apply nowhere else.

This guide walks through the full process, from obtaining authority to sell through closing, and addresses the tax consequences for the people who ultimately receive the proceeds.

Step One: Establish Legal Authority to Sell

Real estate owned solely by the deceased cannot be transferred without legal authority. The path to that authority depends on how the property was titled and how large the estate is.

Formal Administration: Letters of Administration

For most estates involving real estate worth more than $75,000, formal administration is required, and the personal representative must obtain Letters of Administration from the circuit court. These letters are the legal document that authorizes the personal representative to sign deeds, enter contracts, and conduct estate business — including listing the property for sale.

Getting Letters of Administration requires opening the probate case, filing the petition, and waiting for the court to appoint the personal representative. This typically takes four to six weeks from the date of filing. See our Letters of Administration guide for the complete process.

Summary Administration: Court Order

When the estate qualifies for summary administration — either because the non-exempt assets are below $75,000 or the death occurred more than two years ago — the court issues an Order of Summary Administration that identifies the beneficiaries who are entitled to receive the property. The deed can then be transferred based on that order. No personal representative is appointed.

Title Company Requirements

Title companies and closing agents will not insure a transaction involving inherited real estate without documentation of proper probate. Depending on the transaction, they may require:

• Certified copies of the Letters of Administration (or the Order of Summary Administration)
• A certified copy of the death certificate
• Proof that the creditor claims period has closed (typically 3 months after Notice to Creditors was published)
• Sometimes a court order specifically authorizing the sale, particularly if the will does not expressly grant the personal representative the power to sell real estate

Budget enough time for the title underwriter to review the probate record. This review can add several weeks to a sale timeline, especially if there are gaps in the court file or if the probate is still open.

Florida Homestead: Special Rules That Apply to No Other Property

Florida's homestead rules are unique in American law, and they directly affect whether — and how — a deceased person's home can be sold.

What Is Homestead?

The Florida homestead is the primary residence of a Florida resident on up to half an acre within a municipality, or up to 160 acres outside one. Homestead receives both a property tax exemption (the $50,000 homestead exemption on the assessed value) and a constitutional protection from most creditors.

Homestead Passes Outside Probate

Constitutional homestead that passes to a surviving spouse or lineal descendants does not go through the probate estate. It transfers automatically — the personal representative does not control it and cannot sell it without the consent of the persons who inherited it.

Restrictions on Devising Homestead

A Florida resident cannot freely leave their homestead by will if they have a surviving spouse or a minor child. Under Article X of the Florida Constitution and F.S. 732.4015:

• If survived by a spouse and no minor children: the surviving spouse receives a life estate in the homestead, with a vested remainder to the lineal descendants. Alternatively, the surviving spouse can elect to take an undivided half interest as a tenant in common (under F.S. 732.401(2)).
• If survived by a minor child (with or without a spouse): the homestead cannot be devised at all. It passes by intestate succession to the heirs.
• If survived by adult children only, no spouse: the homestead can be devised freely.

This creates a practical complication: even if the will says "I leave my house to my daughter," if there is a surviving spouse or minor child, the will's directive cannot be fully followed. The personal representative and beneficiaries must resolve this before the property can be sold.

Selling Homestead That Has Passed to Heirs

Once homestead has been distributed to the heirs who are entitled to it, those heirs own the property and can sell it like any other real estate — by signing a deed and working with a title company. The personal representative's role in homestead is limited to characterizing it correctly in the estate proceedings; the personal representative generally does not sign the deed for constitutional homestead.

If heirs are spread across multiple family members who received it as tenants in common and they cannot agree on whether to sell, a partition action may be needed (discussed below).

Timeline: What to Expect

Selling inherited property typically cannot happen quickly in Florida. Here is a realistic timeline:

For formal administration, the minimum practical timeline is about six months. Contested estates, title issues, or complex homestead situations can stretch this considerably.

When Heirs Cannot Agree: Partition Actions

When multiple people inherit a property as co-owners — a common result of intestate succession or a will that divides property among siblings — and they cannot reach agreement on whether to sell or how to divide proceeds, a partition action is available under F.S. 64.011.

A partition action is a lawsuit where one or more co-owners ask the court to force a resolution. The court can either:

• Order physical partition of the property (rarely practical for a single-family home)
• Order the property sold at a court-supervised sale with proceeds divided among co-owners

Partition actions are adversarial proceedings and typically involve attorneys on multiple sides. They are expensive and time-consuming. Families should attempt mediation before filing a partition action; many disputes that seem intractable resolve when the parties sit down with a neutral mediator.

Tax Consequences: Capital Gains on Inherited Property

The Step-Up in Basis

Inherited property receives a step-up in cost basis to its fair market value on the date of death. This is one of the most valuable tax provisions available to heirs. If the decedent bought a home for $80,000 in 1985 and it is worth $400,000 at death, the heirs' basis is $400,000 — not $80,000. If the heirs sell the property for $410,000, they owe capital gains tax only on the $10,000 of appreciation that occurred after the date of death.

For a detailed explanation of how this works, see our Step-Up in Basis guide.

Capital Gains Rate

Gains on inherited property are treated as long-term capital gains regardless of how long the heir held the property before selling. The federal long-term capital gains rate depends on the heir's taxable income — 0%, 15%, or 20% for most individuals. High-income earners may also owe the 3.8% Net Investment Income Tax on top of that.

No Florida Capital Gains Tax

Florida has no state income tax and therefore no state capital gains tax. Whatever federal capital gains tax is owed, nothing additional goes to Florida.

Calculating the Gain

To calculate capital gains:

1. Determine the fair market value at the date of death (this becomes the new basis). Use a qualified appraisal for real estate — the estate's inventory should reflect this.
2. Add any capital improvements made after inheriting the property (these increase basis).
3. Add selling costs (real estate commissions, transfer taxes, title fees) — these reduce the taxable gain.
4. Subtract the adjusted basis from the sale price.

Example: Inherited property with a step-up basis of $400,000. You make $15,000 in repairs before selling. You sell for $450,000 with $25,000 in closing costs. Taxable gain: $450,000 − $400,000 (basis) − $15,000 (improvements) − $25,000 (selling costs) = $10,000.

1031 Exchanges for Investment Property

If the inherited property was used for investment or rental purposes (not a personal residence), heirs can defer capital gains taxes by exchanging the property for a like-kind investment property in a 1031 exchange under IRC Section 1031. Strict rules apply: the replacement property must be identified within 45 days of the sale, and the exchange must close within 180 days. A qualified intermediary must hold the proceeds between transactions. This is a planning technique worth discussing with a tax advisor if the property is investment real estate.

Frequently Asked Questions

Can we sell before probate is complete?

You can enter into a contract to sell during probate, but the closing typically cannot occur until the personal representative has Letters of Administration and the title company is satisfied with the probate record. Some title companies will close before the full creditor period has expired if sufficient reserves are held in escrow.

Do we need a real estate appraisal?

Yes, and for multiple reasons. The probate inventory requires date-of-death values. The estate tax return (if required) also requires appraisal values. And the appraisal establishes the step-up basis that determines capital gains tax when you eventually sell. A qualified appraisal by a licensed Florida appraiser is the best documentation.

What if there is a mortgage?

The mortgage does not disappear at death. The estate must continue making payments during administration or risk foreclosure. When the property is sold, the mortgage is paid from the proceeds at closing just as in any other sale.

Does homestead affect capital gains tax?

No. The step-up in basis applies to homestead property the same as any other inherited real estate. Florida homestead is a creditor protection and property tax benefit; it does not create any special capital gains exemption.

Related Guides

• Step-Up in Basis: How Inherited Assets Are Taxed
• Florida Homestead Exemption
• Florida Letters of Administration
• Florida Formal Administration
• Florida Probate Timeline
• Florida Surviving Spouse Rights

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Sources:

• "Florida Statutes Article X, Section 4 — Homestead," Florida Constitution, 2024
• "Florida Statutes Section 732.401 — Descent of Homestead," Florida Legislature, 2024, https://www.flsenate.gov/Laws/Statutes/2024/732.401
• "Florida Statutes Chapter 64 — Partition," Florida Legislature, 2024, https://www.flsenate.gov/Laws/Statutes/2024/Chapter64
• "IRC Section 1031 — Exchange of Real Property Held for Productive Use," Internal Revenue Service, 2024
• "Consumer Pamphlet: Probate in Florida," The Florida Bar, 2024, https://www.floridabar.org/

This guide provides general information about selling inherited real estate in Florida. Real estate transactions and probate proceedings are complex. Consult with a Florida probate attorney and a tax advisor for advice specific to your situation.