1031 Exchange & DST Investing in Tampa, FL
Tampa Bay is a diversified market spanning finance, healthcare, defense, and logistics, with strong population growth and downtown redevelopment. Because Florida has no state income tax, a 1031 exchange faces no state-level capital-gains tax, and DSTs are available to accredited investors nationwide.
State tax treatment of a 1031 exchange
Capital-gains treatment is set at the state level, and Florida imposes no personal income tax. As a result there is no state capital-gains tax on a real estate sale and no state nonresident withholding, so a 1031 exchange in Tampa defers only federal tax on the gain. See our Florida state page for details.
Market snapshot
Tampa Bay has diversified well beyond its traditional tourism roots into a broad economy spanning financial and back-office services, healthcare, defense at MacDill Air Force Base, and logistics served by the Port of Tampa and the I-4 corridor connecting to Central Florida. Downtown Tampa's Water Street redevelopment and the growth of the Westshore business district have expanded office and mixed-use inventory, while multifamily and industrial are the leading investment asset classes across submarkets including St. Petersburg, Brandon, and the fast-growing Pasco County suburbs.
The metro ranks among the national leaders in population growth, and that in-migration has driven an active apartment construction pipeline. As new supply delivered, rent growth moderated and cap rates widened from cycle lows, though Tampa multifamily has often outperformed many Sun Belt peers on absorption. Industrial demand has stayed firm on the strength of Central Florida distribution needs. For 1031 investors, Tampa's diversified white-collar employment, defense and healthcare anchors, demographic momentum, and no state income tax are why replacement capital continues to target the metro.
Why 1031 & DST investors look here
- Diversified economy across finance, healthcare, defense, and logistics
- Among the nation's leaders in population growth, supporting multifamily demand
- No state income tax and active downtown and Westshore redevelopment
Replacement-property options
An investor selling in Tampa can defer gain by exchanging into DST interests, and the replacement property need not be in Florida; like-kind treatment applies to real estate anywhere in the United States. Delaware Statutory Trusts allow accredited investors to reinvest proceeds into professionally managed, institutionally sized assets, and a 721 UPREIT contribution or Qualified Opportunity Zone investment may suit some objectives. Suitability depends on individual circumstances and should be reviewed with qualified tax and financial professionals.
Frequently asked questions
Is Tampa a good market for a 1031 replacement?
Tampa offers a diversified economy, strong population growth, and multifamily that has often outperformed Sun Belt peers, though recent supply has moderated rent growth. Whether it suits a given exchange depends on your objectives and risk tolerance.
Does Florida tax a 1031 exchange?
Florida has no state income tax, so there is no state-level capital-gains tax on a property sale and no state withholding. A 1031 exchange in Tampa defers only federal tax on the gain.
Can I exchange Tampa property for out-of-state DSTs?
Yes. Like-kind real estate can be located anywhere in the United States, so Tampa sale proceeds can be exchanged into DSTs holding property in other states.
Gerald F. “Jerry” Baker, III — Founder & Managing Principal, Baker 1031 Investments · FINRA Series 22 / 63 · SIE. Read full bio →
State tax treatment is general and changes frequently; this page is educational and is not tax, legal, or investment advice. Confirm current state and local rules with your own CPA and attorney. Securities offered through Aurora Securities, member FINRA/SIPC. Real estate investments involve risk, including possible loss of principal.