How 1031 Exchange Rules Differ in Florida vs. Texas
- Laurene Rodriguez
- Nov 10, 2025
- 2 min read
A 1031 exchange allows real estate investors to defer capital gains taxes when selling one investment property and purchasing another of “like-kind.” While the IRS sets the main rules for 1031 exchanges nationwide, real estate markets and state regulations can influence how the exchange process unfolds in different places.
If you’re considering a 1031 exchange in Florida or Texas, understanding the similarities and subtle differences can help you make confident, well-timed decisions. Below, we break down what investors need to know in each state.
1031 Exchange Rules in Florida
Florida is one of the most popular states for investment property owners, especially those managing rental real estate or vacation rentals held for income.
State Taxes
Florida does not levy a state income tax, which means your 1031 exchange is generally only subject to federal IRS guidelines, not additional state-level taxation.
Timelines
The standard federal timing rules apply:
45 days to identify your replacement property
180 days to complete the purchase and close
Eligible Property Types
Florida allows exchanges for most real estate held for investment, including:
Rental homes and condos
Multi-family properties
Commercial buildings
Some vacation homes, if they are held primarily for investment, not personal use
Investors should ensure proper documentation to prove the property qualifies as investment-use.
1031 Exchange Rules in Texas
Texas also remains a top market for real estate investors, especially those acquiring rental properties, commercial real estate, and land for development.
State Taxes
Like Florida, Texas does not have a state income tax, so your exchange is guided by federal rules.
Eligible Property Types
You can typically exchange:
Residential income properties
Commercial properties (retail, office, industrial)
Raw or undeveloped land
Market Timing Considerations
Texas markets such as Dallas, Austin, and Houston can move quickly. Because the 45-day identification window is fixed, investors in Texas often benefit from working with a Qualified Intermediary early to avoid rushed or disqualified property picks.
Key Takeaways for Real Estate Investors
Factor | Florida | Texas |
State Income Tax | None | None |
1031 Timelines | Federal Rules Apply | Federal Rules Apply |
Qualifying Properties | Rental, commercial, certain vacation homes | Rental, commercial, land |
Practical Differences | Seasonal markets, strong vacation rental activity | Fast-moving metro markets require proactive planning |
Bottom Line:
Both states follow the same federal IRS 1031 exchange guidelines. The biggest difference lies in local market dynamics, available property types, and timing strategies.
Working with a Qualified Intermediary (QI) ensures compliance, keeps your funds secure, and helps keep your exchange on track.
Get Support for Your 1031 Exchange
Whether you’re exchanging property in Florida, Texas, or another state, the right guidance makes the process smooth and stress-free.
Ready to move forward? Get started with Sunwest and ensure your 1031 exchange is handled securely and correctly from start to finish.
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