I’m excited to share some important news: starting October 1, 2025, Florida is repealing the state sales tax on commercial lease payments.
This repeal also eliminates the local surtax that used to apply to commercial rents. For years, these taxes added extra costs that other states didn’t impose, sometimes reaching as high as 5.5%. With this change, Florida is leveling the playing field and making it more affordable for businesses to lease space here.
What You and Your Clients Should Keep in Mind
- No tax on rent after October 1: Rent payments for October 2025 and beyond will no longer include sales tax, at either the state or local level.
- Timing matters: Rent owed for September 2025 (or earlier) is still taxable, even if it’s paid after October 1. On the other hand, rent for October or later is tax-free, even if it’s prepaid before the effective date.
- Some items remain taxable: Short-term residential rentals (six months or less), parking or storage fees, boat docks, and certain equipment rentals (like forklifts) included in lease agreements will continue to be subject to sales tax.
How to Get Ahead of the Change
Landlords should start planning now to update their billing systems so they stop collecting sales tax after September 30. Tenants should review their invoices carefully, especially for any rent prepaid for October or beyond, to make sure they’re not being charged tax that no longer applies.
For Realtors, this is a great opportunity to be proactive. By bringing this change to your clients’ attention, you can help them avoid last-minute surprises and show real value as a trusted advisor.
Florida’s decision to repeal the business rent tax is more than just a technical change, it’s a meaningful win for our business community. It reduces occupancy costs, improves our state’s competitiveness, and gives both landlords and tenants one less thing to worry about when negotiating leases.
If you or your clients have questions about how this repeal could affect your deals, please reach out to your trusted local real estate attorney.
