Building a Custom Home in Florida

Start with the land, not the floor plan

The lot sets most of your costs before any design work begins. Before you buy one, check:

• Zoning and setbacks: how large a house the parcel allows, height limits, and whether the lot is in an HOA with architectural review.
• Flood zone and base flood elevation: in a FEMA A or V zone, the finished floor must be at or above the base flood elevation plus any local freeboard. Raising a slab or building on stem walls or pilings adds real cost.
• Soil and wetlands: a geotechnical report shows whether the soil can carry a slab or needs fill, compaction or piling. Wetlands on a lot can shrink the buildable area and trigger permits.
• Utilities: city water and sewer, or a well and septic system. Septic needs a permit and a soil evaluation; some areas restrict new conventional systems near waterways.
• Impact fees and connection fees: charged by many counties and cities on new construction. Ask the building department for the current schedule.
• Survey and title: a boundary survey and a title search on the land, the same as any purchase.

Land prices follow the same map as home prices. County values on Zillow's index range from about $166,734 in Calhoun to $962,885 in Monroe, and lots follow that spread.

How construction loans work

A regular mortgage won't pay for a house that doesn't exist yet. The common options:

• Construction-to-permanent (one-time close): a single loan that funds the build and then converts to a standard mortgage. One set of closing costs; you lock terms at the start.
• Two-time close: a short-term construction loan, then a separate mortgage when the house is finished. More flexibility, two closings and two sets of costs.
• Lot loan: to buy land now and build later. Expect a larger down payment than on a house.

During construction the lender releases money in draws as stages are completed and inspected: foundation, framing, dry-in, mechanicals, finishes. You usually pay interest only on what has been drawn. Lenders review the builder too, asking for license, insurance, financial references and a detailed budget. If you own the lot outright, its equity can often count toward the down payment.

Florida mortgage taxes apply: documentary stamp tax on the note at $0.35 per $100 and intangible tax of 0.2% of the loan amount.

Choosing and checking a builder

Florida requires contractors to hold a state certified or registered license. Look up any builder on the Florida Department of Business and Professional Regulation's license search, and confirm general liability and workers' compensation coverage. Ask for addresses of recent homes and talk to the owners.

Contract structure matters:

• Fixed price: the builder carries the risk of cost increases, usually with higher margins built in.
• Cost-plus: you pay actual costs plus a fee or percentage. Transparent, but your budget moves with material and labor prices.
• Allowances: amounts set aside for items like flooring, cabinets and fixtures. Low allowances make a bid look cheaper than it is.
• Change orders: every change after signing should be priced and signed in writing before work starts.

Florida's construction lien law

This is the part out-of-state buyers often miss. Under Florida's Construction Lien Law, subcontractors and suppliers who aren't paid by your builder can file a lien against your property, even if you already paid the builder. The protections are procedural:

• A Notice of Commencement is recorded with the county before work starts.
• Subcontractors and suppliers send you a Notice to Owner to preserve their lien rights. Keep every one.
• Before each draw, ask for lien releases from the parties who sent notices for the work being paid.
• At the end, get the contractor's final affidavit stating everyone has been paid.

A construction lender usually manages much of this through its draw process. If you pay cash, you or your attorney need to manage it. This isn't legal advice; for a custom build, having a real estate attorney review the construction contract is money well spent.

Permits, code and storm resistance

Every new house is permitted and inspected under the Florida Building Code, which includes some of the strictest wind requirements in the country. Much of the coast is in the wind-borne debris region, where windows and doors must be impact-rated or protected by approved shutters. The code sets a floor; a custom build lets you go above it with features such as a sealed roof deck, a hip roof, a higher-rated roof covering, impact glass throughout and a generator connection.

Those choices pay back in insurance. A new house with strong wind mitigation features usually gets a lower wind premium than an older resale home. Ask your insurance agent which features earn credits before you finalize plans, and order a wind mitigation inspection once the house is finished.

Florida does allow an owner-builder exemption, letting you act as your own contractor on a home for your own use after signing a disclosure statement with the building department. The law presumes you built for sale if you sell within a year of completion. It saves fees and puts every code, lien and safety obligation on you.

Timeline and the steps in order

• Budget and pre-approval: talk to a construction lender before you buy land.
• Buy the lot: with a survey, soil report, flood zone check and utility confirmation.
• Design: an architect or designer draws plans; an engineer signs off on structure and wind loads.
• Bids and contract: get at least two or three bids on the same plans.
• Permits: review times vary widely by county and city.
• Construction: commonly many months; weather, inspections and supply delays all extend it.
• Certificate of occupancy, final survey and elevation certificate: then the permanent loan closes or converts.

Insure the project during construction. Builder's risk coverage protects the house while it's going up; confirm whether you or the builder carries it.

Property tax and homestead on a new build

Florida assesses property as of January 1 each year. A house still under construction on January 1 may be assessed only for the land and partial improvements; the next year's bill reflects the finished home at full value. Budget for that jump.

If the house is your permanent residence and you live in it by January 1, you can apply for homestead by March 1 of that year. In 2026 homestead removes up to $51,411 from assessed value and caps future increases at 3% or CPI. Build it as a winter or second home and the exemption doesn't apply; the only protection is a 10% annual cap on the non-school part of the assessment. If you're weighing a custom build against an existing house, a shortlist of resale homes on comparable lots is the quickest way to price the premium for building.