Taxes Required for Residential Rental Properties

Apart from the income taxes and homeowner’s tax, there are two main types of taxes that apply to each rental real estate owner. Whether your rental property is also your place of residence or not, these tax payments have to be covered on a regular basis.

The Florida Sales Tax

For lease periods of 6 months or less, a sales tax has to be paid on each and every residential rental property in the state of Florida.

This is one of the most important taxes you need to be aware of as a landlord in Florida, and it generally amounts to 6-7% of the room rates or rental charges you ask from tenants when providing them with living and sleeping accommodations.

This tax applies to anything from multiple unit structures and single-family dwellings to condominium parcels or mobile homes, and has to be remitted and paid at the Department of Revenue.

County Tourist Development Tax

The county tourist development tax is applied to up to 6 months worth of revenue from residential rentals, and, in most Florida counties, it can be summed up to about 5% of the collected income amount.

While the sales tax is paid at the Florida Department of Revenue, remitting and covering the payment for the county tourist development tax has to be done in the county your property is located in.

Also, depending on the specifics of your rental investment, discretionary surtax, developmental tax or local option tax charges may also apply.

For additional information on these matters, the Discretionary Sales Surtax brochure (Form GT-800019) should be able to provide you with all the useful insight you may require.

Collecting and Filing Tax Payments

Although, normally, the tenant should be the one supporting tax payments, as landlord, it will be your responsibility to cover the cost if you fail to collect the amount from your tenants. Landlords are generally encouraged to discuss this matter and reach a mutually beneficial settlement with the tenant depending on the lease agreement.

Also, keep in mind that these taxes apply to residential properties. If you own a commercial property, the county tourist development tax will not be applicable and different terms will apply to the sales tax as well.

In order to avoid the substantial penalties involved with the failure to provide these tax payments, it is important to register with the applicable agency as soon as possible and continue to remit and pay the tax amounts on a regular basis within the required timeframe.