Florida Rental Property Taxes: What Landlords Pay and Deduct

You bought a rental in Orlando or Tampa, and now you're staring at your first tax season. What do you actually owe? What can you write off? Florida's tax picture for landlords is different from most states—and it's mostly good news.

Florida has no state income tax. That means your rental income isn't taxed at the state level. You'll still report everything on your federal return, but you won't see a separate Florida tax bill on that income. Property tax is where Florida landlords feel the pinch—and where understanding the rules pays off.

What Property Taxes Do Florida Landlords Pay?

Rental properties in Florida are taxed as non-homestead real estate. You don't get the homestead exemption (that's for your primary residence), and your annual assessment increase is capped at 10% instead of the 3% cap that homestead owners enjoy under Save Our Homes. That 10% cap is set by Florida Statute 193.1554—and it doesn't apply to school district levies, so those can rise faster.

Effective property tax rates vary by county. In Central Florida, you're typically looking at 0.88% to 0.92% of assessed value. Orange County runs around 0.90%, Hillsborough about 0.92%, Osceola 0.91%, and Seminole 0.88%. On a $300,000 rental, that's roughly $2,640 to $2,760 per year. For deeper local breakdowns, our Orlando property tax guide walks through county-specific details. See our property tax appeals in Florida for more.

Counties can offer early payment discounts—often 4% in November, 3% in December, 2% in January, and 1% in February. Pay early and you trim the bill. The 10% cap resets when ownership changes, so if you buy a rental, it gets reassessed at just value the following January 1. After that, the cap kicks in and limits how fast your taxable value can climb each year.

What Can You Deduct on Your Federal Return?

Since Florida doesn't tax rental income, your deductions matter on Schedule E of your federal return. The IRS Publication 527 spells out what counts. Here's the short version. See our rental tax deductions checklist for more.

Mortgage interest is usually your biggest deduction. You only deduct the interest portion of your payment—not principal—and your lender sends a Form 1098 with the number. On a $250,000 loan at 7%, that's roughly $17,500 in year-one interest alone.

Property taxes you pay are fully deductible. That includes county and municipal taxes on the rental. You can't double-dip with the SALT cap on your personal return—rental property taxes go on Schedule E, separate from your itemized deductions.

Insurance for the rental—hazard, liability, flood if you carry it—is deductible. Landlord policies in Florida often run $1,200 to $2,000 a year, and every dollar counts.

Property management fees are deductible. If you pay 8–10% of rent to a manager, that's a direct expense. See our breakdown of property management costs in Orlando for typical fee structures.

Repairs and maintenance that restore the property to its prior condition are deductible in the year you pay them. Fixing a broken AC, repainting between tenants, replacing a damaged screen—all deductible. Improvements that add value (like a new roof or major renovation) get depreciated instead.

Travel to manage your rental is deductible. The IRS allows the standard mileage rate (70 cents per mile in 2025) for trips to collect rent, meet contractors, show the property, or handle maintenance. You need a log: date, miles, purpose. If you're an out-of-state landlord, those Florida trips add up—and they're all deductible with proper records.

Depreciation is the big one we'll cover in a separate post. You deduct the cost of the building (not the land) over 27.5 years. It's a paper expense—no cash leaves your pocket—but it often turns taxable rental income into a paper loss.

Advertising for tenants—listing fees, photography, yard signs—is deductible. Legal and professional fees for evictions, lease review, or tax prep count too. Commissions paid to brokers for finding tenants are deductible in the year you pay them. Keep every receipt. A $50 receipt might not feel like much, but over a decade it adds up—and the IRS expects you to have documentation if they ask.

Does the 20% Pass-Through Deduction Apply to Rentals?

Yes, if your rental qualifies as a trade or business. The Section 199A qualified business income (QBI) deduction lets you deduct up to 20% of your net rental income. The IRS explains the rules: you need "considerable, regular, and continuous" involvement. Collecting rent, handling maintenance, screening tenants, and managing the property yourself usually gets you there. Passive investors who hand everything to a manager may not qualify.

If you do qualify, $50,000 in net rental income could mean a $10,000 deduction. It's worth a conversation with your CPA.

How Do You File? Schedule E and Beyond

Rental income and expenses go on Schedule E (Form 1040). You list each property, report income, and subtract expenses. Depreciation goes on its own line. If you have multiple properties, you can aggregate or separate them depending on your situation.

If you're organized—receipts, mileage log, 1098s—filing is straightforward. Many landlords use property management software or a simple spreadsheet. The key is contemporaneous records. The IRS wants to see that you documented expenses when they happened, not reconstructed them at tax time.

What counts as rental income? Rent payments, advance rent (first and last month if you collect it upfront), lease cancellation fees, and any expenses the tenant pays that would normally be your responsibility (e.g., they fix the AC and deduct from rent—you still report the rent as income and the repair as an expense). Security deposits aren't income until you keep them for unpaid rent or damages. Then they become income in that year.

Cash vs. accrual. Most individual landlords use cash-basis accounting: you report income when you receive it and expenses when you pay them. Accrual basis matches income and expenses to when they're earned or incurred. Cash is simpler and standard for small landlords. Your lease agreement terms don't change the accounting method—but they do affect when rent is "received" (e.g., if the tenant pays on the 1st for the month, that's when it's income).

What About Short-Term Rentals?

If you're running a short-term rental (under 6 months), the tax picture changes. You'll owe Florida's 6% state sales tax plus any local tourist development tax. Long-term rentals (6 months or more) don't require sales tax collection. Your income is still exempt from Florida state income tax either way—but the sales tax obligation is separate. Most Orlando and Tampa landlords with traditional 12-month leases never touch this; it matters mainly for vacation rentals and Airbnb-style setups.

Common Mistakes Florida Landlords Make

Mixing personal and rental expenses. That Home Depot run where you bought supplies for your rental and your own house? Split it. Only the rental portion is deductible.

Forgetting about depreciation. Even if you don't take it, the IRS still reduces your basis when you sell. You'll pay depreciation recapture either way—so you might as well take the deduction while you own the property.

Skipping the mileage log. "I drove to the property a few times" won't hold up. Date, miles, purpose. Every trip.

Treating security deposits as income. They're not—until you keep them for unpaid rent or damages. Then they become income in that year.

Deducting improvements as repairs. Replacing a few broken tiles is a repair. Replacing the entire floor is an improvement—it gets depreciated, not written off in year one. When in doubt, ask your CPA. The line matters for audits.

Not tracking rental days vs. personal use. If you use the property yourself for even part of the year, you have to allocate expenses. A vacation home you rent 300 days and use 65 days gets prorated deductions. The IRS has specific rules for mixed-use properties. Keep a log of personal use days.

What If You're Renting a Former Primary Residence?

If you converted your homestead to a rental—maybe you relocated for work or inherited a house you're now renting—you lose the 3% Save Our Homes cap. The property gets reassessed at just value the year after it becomes non-homestead, and the 10% cap applies from there. Your property taxes can jump. Plan for it. Some landlords are surprised when the first non-homestead tax bill arrives. The Save Our Homes portability benefit only applies when you move from one homestead to another—it doesn't follow you to a rental. If you're considering converting your home to a rental, factor the tax increase into your numbers before you decide.

The Bottom Line

Florida's no state income tax is a real advantage for rental investors. Your federal tax bill depends on how well you track and claim deductions. Property tax is the main ongoing cost you can't avoid—but understanding homestead vs non-homestead, and knowing what you can deduct federally, puts you ahead of most accidental landlords.

If you're weighing whether a property makes sense as a rental—or you want a clear picture of expenses before you buy—we can help. Get a free rental analysis and we'll break down the numbers for your specific situation.