If you’re a Florida landlord, you may need to pay income tax, property tax, or sales tax. Here’s an overview of those taxes, what you might have to pay, and how you can reduce your sales tax.
Florida has no personal income tax. You do not pay income tax if you’re a sole proprietor, partnership, S-corporation, or most LLCs.
Florida does have a 5.5% income tax on C-corporations. This includes LLCs that elect to be taxed as C-corporations.
As a refresher, C-corporations are corporations that file separate income tax returns. S-corporations are corporations that pass their income through to their owner’s tax returns with the owner paying their personal income tax rate on the net profit.
If you don’t want to pay income tax as a Florida landlord, it’s pretty usually simple. Don’t be a C-corporation.
Note that if you’re not a Florida resident, you may have to pay state taxes to your home state.
Florida property taxes are determined and assessed at the county level. The average property tax rate in Florida is about 0.85%. You can see tax rates by county either summarized on the Florida CFO page or by finding the website for your county’s tax collector.
Florida has strong protections against property tax increases. Under the Florida Constitution, property taxes on any non-homestead property can’t increase by more than 10% per year. This includes both commercial and residential rental properties.