Florida Rental Property Tax: Property, Sales, and Income

A Florida rental property tax bill comes in three parts: an annual county property tax based on assessed value, a 6 percent state sales tax plus a county tourist development tax on any rental of six months or less, and federal income tax on the net profit you report to the IRS on Schedule E. Florida has no personal income tax, but that only removes one layer. The other three apply in full, and each has its own rules, deadlines, and penalties.

Annual Property Tax on the Property Itself

Every rental property owes ad valorem tax based on a value set by the county property appraiser as of January 1 each year. The appraiser starts with “just value,” which is essentially what the property would sell for in a fair, open-market sale, then applies any caps and exemptions to arrive at the taxable value.

For non-homestead residential properties with nine or fewer dwelling units, the assessed value cannot rise by more than 10 percent in a single year.¹ The cap protects you from sudden assessment spikes in a hot market, but it caps the assessed value, not the tax bill. Millage rates set by local governments can still climb, so your actual bill can go up even in a capped year.

Two caveats matter. The 10 percent cap does not apply to the school district portion of the bill; for school levies, non-homestead property is assessed at full just value every year. And when a rental property changes hands, the assessed value resets to full market value the following January 1, with the cap starting over from that new baseline.¹ Buying from a long-time owner often means a sharply higher tax bill in year one.

No Homestead Exemption on a Rental

Florida’s homestead exemption shelters up to $50,000 of assessed value for a primary residence.² A tenant-occupied property does not qualify. If you convert your own home to a rental, you lose the exemption. Florida does allow renting your homesteaded property for up to 30 days per calendar year without forfeiture, but exceeding that limit in two consecutive years ends the exemption, and the assessed value resets to just value the following year.³

Payment Schedule and Early Discounts

County tax collectors mail bills in November. Taxes become delinquent on April 1, and tax certificates are sold on unpaid parcels by June 1.⁴ Florida rewards early payment with a sliding discount:⁵

November: 4 percent off
December: 3 percent off
January: 2 percent off
February: 1 percent off
March: full amount, still on time

On a $6,000 bill, paying in November saves $240. Payments go to the county tax collector, not the Department of Revenue.

Sales Tax on Rentals of Six Months or Less

Any time you rent living quarters for six months or less, Florida treats it as a transient rental and imposes a 6 percent state sales tax on the total amount charged.⁶ This covers apartments, houses, condominiums, mobile home parks, and timeshare resorts.

The tax applies to the total consideration, not just base rent. Mandatory cleaning fees, pet surcharges, utility add-ons, and any other charge a guest must pay as a condition of occupancy are part of the taxable amount.⁶ Breaking them out on a separate line does not make them exempt.

A tenant who signs a bona fide written lease for continuous residence longer than six months is exempt from the transient rental tax.⁶ Stacking a series of short-term renewals to reach six months will not qualify; it has to be a single written lease for the longer term.

County Tourist Development Tax on Top

Most Florida counties add a tourist development tax on short-term rentals. The statute lets counties stack several separate levies, each requiring voter approval beyond the base rate.⁷ The maximum ranges from 3 to 6 percent depending on county eligibility and approvals.⁸ Combined with the 6 percent state tax, short-term guests end up paying roughly 9 to 12 percent of gross receipts in tax. Popular tourist counties sit near the top end. Some counties collect the tourist tax themselves; others let the state collect it with the sales tax. Check your county before your first guest arrives, because applying the wrong rate is treated the same as underpaying.

Registering, Filing, and the Penalties for Missing a Deadline

Before accepting a short-term guest, register as a sales and use tax dealer with the Florida Department of Revenue. You can register online or submit a paper Florida Business Tax Application (Form DR-1).⁹ Many counties also require a separate local business tax receipt, so confirm with your county tax collector or licensing office.

Returns are filed through the Department of Revenue’s eFile and Pay portal.¹⁰ If your annual sales tax exceeds $1,000, expect monthly filing.¹¹ Filing and paying electronically on time earns a small collection allowance of 2.5 percent of the first $1,200 in tax due, capped at $30 per period.¹²

Miss a deadline and the picture changes fast. A late return or payment triggers a 10 percent penalty on the tax owed, with a $50 minimum even if no tax is due.¹² Continued underreporting adds another 10 percent for each 30-day period, up to a 50 percent cap. A floating interest rate also runs on any underpayment.¹¹ Keep per-stay records of occupancy dates, total charged, fee breakdown, county, and tax collected for at least three years.

Federal Income Tax on Rental Profit

No state income tax does not mean no income tax. All rental income gets reported to the IRS on Schedule E of Form 1040. You report gross rents, subtract allowable expenses, and arrive at net income or loss. Deductible expenses include mortgage interest, property taxes paid to the county, insurance, repairs, cleaning, advertising, management fees, legal fees, utilities you pay, and depreciation.¹³

Depreciation

Depreciation is usually the largest non-cash deduction. Residential rental property is depreciated over 27.5 years using the straight-line method under MACRS, applied to the building cost only, not the land, with a mid-month convention based on when you placed the property in service.¹⁴

Shorter-lived components get faster treatment. Appliances, carpeting, fencing, landscaping, driveways, and furniture placed in service after January 19, 2025, qualify for 100 percent bonus depreciation under the One Big Beautiful Bill Act, deductible in full the first year.¹⁵ The building structure itself does not qualify.

Passive Activity Loss Limits

Rental real estate is a passive activity under federal tax law, so rental losses generally cannot offset wages or business income. If you actively participate in managing the rental, you can deduct up to $25,000 in losses against other income. Active participation means you make the calls on tenants, rent, and repairs; you don’t have to swing the hammer yourself. The $25,000 allowance phases out starting at $100,000 of modified adjusted gross income and is gone by $150,000.¹⁶ Married filing separately while living with your spouse at any point in the year drops the allowance to zero. Unused losses carry forward.

Quarterly Estimated Payments

No one withholds tax from rent, so you may owe quarterly estimated payments. The requirement applies if you expect to owe at least $1,000 in federal tax after withholding and credits.¹⁷ For the 2026 tax year, the deadlines are:¹⁸

1st quarter: April 15, 2026
2nd quarter: June 15, 2026
3rd quarter: September 15, 2026
4th quarter: January 15, 2027

To dodge underpayment penalties, pay the smaller of 90 percent of this year’s tax or 100 percent of last year’s. If your prior-year adjusted gross income topped $150,000, the safe harbor rises to 110 percent of last year’s tax.¹⁷ If you also draw a W-2 paycheck, bumping up withholding is sometimes a cleaner way to cover the rental tax than mailing quarterly checks.

Commercial Rentals Are a Different Story

If you rent out commercial space rather than residential, Florida eliminated its sales tax on commercial rentals effective October 1, 2025. The state previously taxed rent on office space, retail space, warehouses, and self-storage under Section 212.031, and that tax no longer applies to occupancy periods beginning on or after that date.¹⁹ The repeal does not touch the transient rental tax under Section 212.03, which still applies to short-term residential rentals of six months or less.

1
The Florida Legislature. Florida Code 193.1554 – Assessment of Nonhomestead Residential Property
2
The Florida Legislature. Florida Code 196.031 – Exemption of Homesteads
3
Florida Dept. of Revenue. Can I Rent My Home to a Tenant and Keep the Homestead Exemption
4
Florida Dept. of Revenue. Taxpayers – Property Tax
5
The Florida Legislature. Florida Code 197.162 – Tax Discount Payment Periods
6
The Florida Legislature. Florida Code 212.03 – Transient Rentals Tax
7
Online Sunshine. Florida Code 125.0104 – Tourist Development Tax
8
Florida Dept. of Revenue. Local Option Taxes
9
Florida Dept. of Revenue. Account Management and Registration
10
Florida Department of Revenue. eFile and Pay Taxes, Fees, and Remittances
11
Florida Department of Revenue. Florida Sales and Use Tax
12
The Florida Legislature. Florida Code 212.12 – Dealer Collection Allowances and Penalties
13
Internal Revenue Service. Publication 527, Residential Rental Property
14
Office of the Law Revision Counsel. 26 USC 168 – Accelerated Cost Recovery System
15
Internal Revenue Service. Treasury, IRS Issue Guidance on the Additional First Year Depreciation Deduction
16
Internal Revenue Service. Publication 925, Passive Activity and At-Risk Rules
17
Internal Revenue Service. Estimated Tax for Individuals
18
Taxpayer Advocate Service. Making Estimated Tax Payments
19
Florida Dept. of Revenue. Sales Tax on Commercial Rentals Repealed Effective October 1, 2025