Property Tax Advice for Florida Homebuyers & Investors

Taxes you don't pay

Personal Income Tax
Inheritance Tax
Gift Tax

Taxes you do have to pay

Annual Assessment Tax - Every year your property will be valued by a local appraiser / tax collector appointed by the county in which your property resides. Much like the council tax in the UK, a levy will be charged against the valuation for local county services.

Sales Tax - If you are renting out your property, Florida State will levy a sales tax (currently 7%) against monthly rental income. It is common practice though to charge this back to the tenant.

Tourist Tax - If you are renting out your property Florida charge a Tourist Tax on rental income, which can be in addition to any Sales Tax charged by the State. Again, it is common practice to bill the tenant for this as the money is used to maintain public services in the County. In Florida, the Tourist Tax ranges from 4%-5% depending upon the county.

Capital Gains Tax - Assessed on your US real estate, Capital Gains Tax of up to 20% may apply. As in most other countries, there are reliefs that can be set against your US Capital Gains to reduce it. For non-residents the IRS will require a form called a FIRPTA when real estate is sold. This requires the closing Realtor to withhold 10% of the final sales funds until the IRS issues an exemption certificate. When the certificate is received (generally up to 90 days later), the 10% funds will be released, minus any outstanding tax to pay.

One Final Note for Investors

Taxes paid on investments in Florida can be greatly reduced through the creative use of reliefs and also through the legal entity by which you purchase the real estate. In the United States you are able to apply for tax residency when you spend 183 days or more in the country at the residence you have purchased. In some instances this can have substantial tax advantages. If you were to buy a property in Florida for example and applied for tax residency, then you'd be able to avoid paying income tax on that property, as Florida has no personal income tax collection system!

Please note: 1st-for-florida-property.co.uk and its affiliates are not qualified to offer professional tax advice. Before you purchase your property please seek expert counsel.

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