Tax on Rented Property in Florida
- Ad valorem taxes are assessed on a real property’s value. These taxes must be paid by the property owner; if the property is rented out, the tax amount can be incorporated into the rental payments due on the property. Ultimate responsibility for the tax payment lies with the property owner. This tax is determined by several taxing authorities such as county, school, municipality and water districts, and rates will vary from year to year. The tax is used to provide a variety of community services such as law enforcement and public schools.
- Certain types of commercial real property are subject to sales tax for the rent paid to occupy and use the property. As of 2009, the sales tax in Florida is six percent of the total rent paid. If a tenant makes payments on behalf of a landlord for mortgage, insurance and ad valorem taxes, those payments are also considered rent and subject to sales tax. Commercial property rentals such as office/retail space, warehouses and convention rooms are all subject to sales tax.
- This sales tax is paid every time you rent a hotel room or a similar dwelling for a period of time under six months. As of 2009, the sales tax in Florida is six percent of the rental or room charges paid to occupy the space. Circumstances where a unit is rented out for longer than six months, room charges for a full-time student enrolled in a post-secondary institution and room charges paid by active duty military personnel are exempt from the tax.
- Leases of tangible personal property are subject to sales tax depending on whether they are a capital or operating lease. For a capital lease, the transaction is regarded similar to a sale of the property so sales tax is charged on the total value of the lease at the time the parties enter into the agreement. For an operating lease, tax is charged on every payment made on the lease.
