1031 Exchanges in Florida: the Clocks, the Rules, and the Replacement Loan
Program and regulatory figures verified July 24, 2026. Details change; confirm your scenario with us.
A 1031 exchange defers capital-gains tax when you trade one investment property for another, if you hit two unforgiving deadlines. The financing on the replacement property has to respect those clocks, and that's our department.
How a 1031 exchange works
Sell a rental, buy a rental, defer the gain. The mechanics are strict: proceeds go to a qualified intermediary, never to you; you identify replacement property in writing within 45 days of the sale closing; and you complete the replacement purchase within 180 days. Both clocks start the same day and run concurrently; the 180 is not 45 plus 180. Since the 2018 tax law, like-kind treatment applies to real property only (the IRS's own guidance is short and readable), and the exchange reports on Form 8824. Your qualified intermediary and CPA run the exchange itself; we don't practice tax. What we run is the loan that has to close inside those 180 days.
Financing the replacement property on a deadline
The 1031 timeline is where DSCR structure earns its keep. No employment verification, no tax-return analysis, no personal DTI reconstruction: the replacement property qualifies on its own rent against its own payment, which strips weeks of documentation risk out of a purchase that cannot miss its date. We pre-underwrite your candidate properties during the 45-day identification window so the one you pick is already a known quantity. LLC vesting carries through cleanly (entity mechanics here), and if the replacement is a short-term rental, STR income rules and the city's permit reality apply as usual.
The Florida angle
Two state-specific lines belong in your exchange math. First, the loan taxes: your replacement financing pays note doc stamps plus the intangible tax, about $5.50 per $1,000 borrowed, and those state costs are not part of the deferral, so budget them at the replacement closing. Second, the property-tax reset: Florida resets a purchased property's assessment to just value, so the replacement's tax line may differ from the seller's current bill, and we underwrite the ratio on the real number (the tax guide runs it). Exchanging into Florida is popular for the obvious reason, no state income tax, but the transaction costs on the loan are real and belong in the model before you identify.
No pressure, no obligation, and no salesy follow-up: a 20-minute call with our team, real numbers, and a straight answer on whether the deal pencils.
Frequently asked questions
How does a 1031 exchange work when buying a Florida rental?
Proceeds from your sale go to a qualified intermediary; you identify replacement property in writing within 45 days of closing and complete the purchase within 180 days (both clocks run concurrently). Real property only, reported on Form 8824. Your intermediary and CPA run the exchange; we close the replacement loan inside the window.
Can I use a DSCR loan on a 1031 replacement property?
Yes, and it fits the timeline: the replacement qualifies on its own rent-to-payment ratio without employment or tax-return documentation, so the loan can't be derailed by personal-income underwriting inside your 180 days. LLC vesting is preserved, and we pre-underwrite candidates during your 45-day identification window.
Does Florida add any tax on a 1031 exchange?
No exchange-specific state tax, and no state income tax at all. But the ordinary Florida loan taxes still apply at the replacement closing: note doc stamps plus the intangible tax, about $5.50 per $1,000 borrowed, are not deferred. Budget them. Your intermediary and CPA handle the federal deferral; we handle the replacement loan.
Mike Certo · NMLS #260555 · Cornerstone First Mortgage NMLS #173855 · Equal Housing Lender. Educational content, not a loan commitment and not legal, tax, or insurance advice. City and county STR rules, tax figures, and insurance requirements change; verify current requirements with the city, your association, your CPA, or a Florida real estate attorney before you buy. Loans are subject to buyer and property qualification.