What are the Tax Rules for Florida Vacation Homes?

Owning a vacation home can be an investment that creates a new source of income for you and your family. But there are tax rules that home investors need to consider when owning vacation homes in Kissimmee, FL. 

Understanding tax rules helps you comply with state laws and avoid costly legal issues down the line. Knowing when and how to pay your taxes can help you get the most out of your home investment. 

Owning a Florida Vacation Home

Popular short-term rental platforms like Airbnb and VRBO make it easy for homeowners to reach more people looking for properties that have the features and amenities they want. 

But like all other forms of income, there are tax liabilities to consider when earning income from a vacation rental property. In the state of Florida, short-term rental income is subject to taxation.

Failing to pay taxes on income generated from your vacation rental can lead to penalties in the form of interest and fines. Florida tax authorities require short-term rental homeowners to collect taxes and submit them to the state’s tax authorities. 

Collecting and Paying Income and Lodging Taxes

Short-term rental homeowners must pay a percentage of the booking cost for all rental guests. This lodging tax can be included as part of the payment that guests pay when booking their stay. Homeowners must also pay a tax on income that’s considered taxable by the state of Florida, including income from your short-term rental property. 

Home investors need to register with the Florida Department of Revenue before they collect taxes on their short-term rental properties. This action can be completed online, where you will receive registration and sales tax certificates along with detailed instructions for filing lodging taxes.  

Determining Tax Requirements for Your Florida Vacation Home

Your home’s location determines your tax jurisdiction as well as your home’s tax rates and the taxes you need to submit. It’s important to note that tax rates can change over time, so you need to stay current with tax requirements. This is especially important when collecting taxes from guests so that they are charged the correct tax rate. 

Security deposits and other refundable fees aren’t subject to taxation unless homeowners keep those deposits. Expenses related to maintenance, repairs, advertising, and mortgage interest may impact the amount of tax you’ll need to pay.  

The short-term rental industry has become a major source of tax revenue for Florida. As a holiday homeowner, it’s your responsibility to comply with local tax regulations to avoid fines and other penalties. 

Team Donovan helps home investors buy and sell vacation homes in Kissimmee FL. Investors can use those homes to attract the growing number of travelers who prefer short-term rental homes over hotels and resorts. 

To learn how you can profit from the short-term rental market, contact us at (407) 705-2616 and schedule a free consultation today.

Image by Nattanan Kanchanaprat from Pixabay Posted by Team Donovan on

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