South Florida’s real estate market has seen unprecedented growth, and Plantation is no exception. Whether you’re a homeowner, investor, or landlord, understanding how this boom affects your taxes is critical. In this guide, we’ll explore tax strategies to help you navigate the real estate market and maximize your financial outcomes.

1. Property Tax Deductions for Homeowners
Homeowners in Plantation can deduct property taxes up to $10,000 on their federal tax returns. Florida’s Homestead Exemption offers additional relief by reducing your property’s taxable value.

  • Pro Tip: If you recently bought a home, verify your eligibility for the exemption. Applications are typically due by March 1st each year.

2. Capital Gains Taxes on Home Sales
Thinking of selling your home? If it’s your primary residence, you may qualify for the IRS’s capital gains exclusion of up to $250,000 ($500,000 for married couples) in profit.

  • Example: A Plantation homeowner purchased their home for $300,000 in 2015 and sold it for $550,000 in 2023. Since the profit was $250,000, they avoided capital gains taxes entirely.

3. Tax Benefits for Rental Property Owners
If you own rental property in Plantation, you can deduct expenses like mortgage interest, property management fees, repairs, and depreciation. These deductions significantly reduce your taxable income.

  • Pro Tip: Keep detailed records of expenses to ensure you claim every eligible deduction.

4. Leverage 1031 Exchanges to Defer Taxes
For investors, a 1031 exchange allows you to defer taxes on property sales if you reinvest in another “like-kind” property.

  • Example: An investor sold a Plantation condo and used the proceeds to purchase a rental property in Fort Lauderdale, deferring $40,000 in capital gains taxes.

FAQs

  1. Can I claim both the Homestead Exemption and rental property deductions?
    No, the Homestead Exemption only applies to your primary residence.
  2. How does the SALT cap affect South Florida homeowners?
    The $10,000 cap on state and local tax deductions includes property taxes, impacting high-value homeowners.
  3. What records should I keep for rental properties?
    Maintain receipts, invoices, and records of repairs, mortgage payments, and depreciation schedules.

Navigating the tax implications of South Florida’s real estate boom requires careful planning. Whether you’re a homeowner or investor, Polaris Tax & Accounting in Plantation can help you maximize your benefits. Learn more about our Plantation office and schedule your consultation today!