Vacation Rental Income Tax in Florida: A Complete Guide for Property Owners (Updated for 2025)
Owning a vacation rental in Florida is a great way to earn extra income, but navigating taxes can be overwhelming. Between federal requirements, state sales tax, and local regulations, it's easy to miss critical details that could cost you money.
We specialize in helping vacation rental owners stay compliant, maximize deductions, and avoid costly mistakes. Whether you rent out a beachfront condo in Miami, a Disney-area home in Orlando, or a Gulf Coast getaway, this guide breaks down what you need to know about vacation rental taxes in Florida—updated for 2025.
What Counts as Taxable Vacation Rental Income?
The IRS and Florida both consider the following as taxable income:
Nightly/weekly rental fees
Cleaning, pet, and resort fees
Non-refundable deposits
Charges for amenities like pool heating, golf carts, or bikes
Example: You rent your Orlando home for $250 per night, add a $75 cleaning fee and a $30/day golf cart rental. Your taxable rental income includes all these charges.
Federal Tax Requirements for Vacation Rental Owners
1. Report All Rental Income The IRS requires you to report all income, even if the platform (Airbnb, VRBO, etc.) doesn't send a tax form.
2. Passive vs. Business Income
Schedule E (Passive): No hotel-like services
Schedule C (Business): Services like daily cleaning, concierge, or breakfast trigger self-employment taxes
3. The 14-Day Rule If you rent out your home for 14 days or less per year, the income is tax-free and does not need to be reported.
4. New 1099-K Threshold (Effective 2024) Platforms must issue a 1099-K if you earn over $600, drastically lowering the previous $20,000 threshold. Expect increased IRS reporting.
Florida Vacation Rental Taxes: State & Local
1. State Sales Tax (6%) Applies to rentals under six months.
2. Tourist Development Tax (2%–6%) Charged at the county level. Example rates:
Miami-Dade: 6%
Orange County (Orlando): 6%
Hillsborough (Tampa): 5%
3. Local Registration & Filing Some counties require separate licenses and tax filings. For example:
Register at floridarevenue.com
File county TDT through local portals
Reminder: Platforms like Airbnb may remit state tax, but not all local taxes. Always verify.
Common Local Restrictions (HOAs & Zoning)
Many Florida cities and HOAs ban or restrict short-term rentals. Miami Beach, for example, enforces strict zones and fines violators. Always check local ordinances.
Should You Create an LLC for Your Rental?
Owning your rental under an LLC provides:
Liability protection
Cleaner tax structure
Potential eligibility for Florida’s Pass-Through Entity Tax (PTET)
PTET Tip: Florida’s PTET lets LLCs and S Corps deduct state taxes at the federal level.
Tax Deductions for Vacation Rentals
Deductible Expenses:
Utilities, insurance, property management
Cleaning, landscaping, pool care
Repairs (immediate) vs. improvements (depreciated)
Depreciation over 27.5 years
Example: You earn $50,000 but spend $20,000 on deductions. You only pay tax on $30,000.
Don’t Forget Estimated Taxes
If you’ll owe $1,000+ in taxes, the IRS requires quarterly estimated payments (Form 1040-ES). Missing these can lead to penalties.
Common Mistakes to Avoid
Not reporting all income (IRS receives 1099-Ks now)
Mixing personal & business expenses
Ignoring local filing rules
Overstating deductions
Pro Tip: Keep records of income, expenses, and guest stays. Consider using accounting software or working with a pro.
Homestead Exemption Warning
Renting out a homesteaded Florida property may disqualify you from the exemption. You could face:
Back taxes
Penalties
Loss of exemption status
International Owners: Special Tax Rules
FIRPTA: 15% withholding on property sales by foreign investors
Rental Withholding: 30% unless proper IRS forms are filed
Tip: Work with an accountant familiar with U.S. tax treaties.
Legal & Legislative Updates (2025)
Florida is tightening vacation rental laws. Updates include:
Expanded state oversight and licensing
Mandatory tax collection by platforms
Local zoning updates in Orlando, Tampa, and Miami Beach
Always check the latest laws or consult a professional.
FAQs
Q: Do I have to report Airbnb income in Florida?
Yes, even if Airbnb collects some taxes for you, you must still report income and check for local tax obligations.
Q: Can I deduct the cost of furnishing my rental?
Yes, but major purchases must be depreciated over several years.
Q: How do I avoid IRS penalties?
Pay estimated taxes on time
Track all expenses
Keep personal use of the rental clearly separated
Final Thoughts: Maximize Profit, Minimize Risk
Stay on top of changing rules. Report income accurately. Deduct wisely. Keep good records.
At Square Accounting, we help vacation rental owners navigate it all—so you can focus on hosting, not headaches.
📧 client@sqaccounting.com
🌐 www.Sqaccounting.com
Florida Department of Revenue Florida vacation rental tax guide Airbnb tax collection
