From October 1st, 2025a historic change comes into effect in the state's real estate and business market: the elimination of commercial rent tax in Florida. The measure promises to reduce costs for entrepreneurs, attract new investments and boost the local economy.

This decision is particularly significant because Florida was the only state in the United States that levied a tax on commercial real estate rentsThis was a charge that had a direct impact on shopkeepers, entrepreneurs and investors. With the end of this charge, the state is taking another step towards consolidating its image as one of the most favorable business environments in the country.

In addition to representing direct savings for those renting rooms, stores and warehouses, this change increases the competitiveness Florida, opening doors for business expansion and fostering opportunities in the commercial real estate market. This is excellent news both for those already operating in the state and for those planning to establish or expand operations in the region.

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The change in Florida's commercial rental tax officially takes effect on October 1st, 2025. As of that date, commercial real estate rents are no longer taxed by the so-called Business Rent Tax (BRT), which is currently levied on the total amount paid by the tenant.

Types of property and contracts benefiting

A elimination of tax applies to:

  • Commercial rooms for offices and consultancies;

  • Retail stores in malls, galleries and shopping centers;

  • Sheds and warehouses used for storage and logistics;

  • Self-storage units rented out for commercial purposes;

  • Industrial spaces and production;

  • Other properties used exclusively for commercial purposes.

This change represents a significant cost reduction, since the state tax, plus local taxes, amounted to around 4.5% to 6% of the rent in many cases.

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Items that are still taxed

Not all leases will be exempt. Some types of contracts are still subject to taxation in Florida, even after October 2025:

  1. Short-term residential rentals

    • Applied when the period is less than 6 months.

    • The fee varies by county and can exceed 6%plus tourist taxes (tourist development tax).

  2. Parking lots and garages

    • Rental of parking spaces or areas for parking vehicles, even if linked to a commercial property, continue to be taxed.

    • Average rate: 6% state tax + any local tax.

  3. Vehicle storage

    • Includes spaces for boats (dry storage), trailers and recreational vehicles.

    • Similar rate to parking lots.

  4. Docks and marinas

    • Rental of space for boats in marinas remains subject to tax.

    • Normally 6% and may have additional fees per city or county.

  5. Aircraft spaces

    • Hangars or areas used for private or commercial aircraft are still taxed.

    • State standard rate of 6%with local variation.

  6. Equipment linked to the property

    • If the rental agreement includes the rental of equipment integrated into the property (e.g. machinery), this part of the value can be taxed separately.

With this change, most long-term commercial contracts will be exempt, considerably reducing companies' fixed costs and making the state more attractive to new businesses.

The end of the commercial rent tax in Florida represents an immediate financial relief for companies of all sizes. For many entrepreneurs, these savings can mean the difference between just keeping their doors open and actually expanding their operations.

Reduced operating costs

With the elimination of the state tax on rent, entrepreneurs and shopkeepers will see their fixed costs fall significantly. A US$ 5,000 per month will no longer pay around US$ 300 to US$ 350 per month in taxesdepending on the county, which can generate savings of up to US$ 4,000 per year.

Possibility of business expansion

This cost reduction opens up space for companies to expand their structures, invest in branches or test new commercial points. For small businesses, which usually operate on tighter margins, the measure can make it possible to enter more strategic areas or those with a greater flow of customers.

Reinvestment of savings in marketing, stock and staff

The money saved can be reallocated to strengthen the business. Among the main possible destinations are:

  • Marketing and advertisingincrease digital presence and local campaigns.

  • Stock and products: diversify the offer to serve more customers.

  • Hiring and training staffto improve service and operations.

Experience from other states

No other US state currently levies a state tax on the rental of commercial real estate; Florida was the only one to maintain this tax. States that have not levied this tax for decades, such as Texas, Nevada and North CarolinaIn addition, the commercial real estate markets are more competitive, with higher occupancy rates and a constant attraction of companies from other states.

In particular Texas is a good example: the absence of this tax has helped cities like Austin and Dallas become hubs of innovation and receive a high volume of business migration, boosting the service sector and local commerce. With the change, Florida is likely to follow a similar path, further strengthening cities like Orlando, Miami, Tampa and Jacksonville as destinations for investment and expansion.

The end of the commercial rent tax in Florida doesn't just benefit business owners who occupy properties, real estate investors should also feel a direct positive impact. By reducing occupancy costs, the state's commercial market will become even more competitive and attractive.

Increasing Florida's attractiveness

Florida is already one of the most popular destinations in the United States for opening and expanding companies, thanks to its business-friendly climate, lack of state income tax and strategic location. With the elimination of the commercial rent tax, the state has become even more competitive with markets such as Texas and Nevada, attracting entrepreneurs from other states and even international investors.

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Higher demand for commercial real estate expected

With lower occupancy costs, it's only natural that demand for commercial real estate will increase. Entrepreneurs who previously considered it unfeasible to open a store, office or warehouse in Florida can now evaluate the possibility. This demand tends to heat up both the sales and rental markets, benefiting both owners and developers.

Potential for development and occupation

The rise in demand should lead to a reduction in vacancy rates and a potential increase in the sale and rental value of commercial real estate, especially in high-traffic areas such as Orlando, Miami, Tampa and Jacksonville.
Attentive investors can benefit from acquiring properties before the appreciation consolidates, guaranteeing greater returns in the medium and long term.

Combining a thriving economic environment, population growth and now the end of exclusive state taxation, Florida is positioning itself as one of the most promising markets for commercial real estate investment in the coming years.

The entry into force of the end of the commercial rental tax in Florida on October 1, 2025 requires some adjustments so that business owners, investors and property managers can take advantage of all the benefits without running the risk of undue charges.

Review of rental contracts

  • Analyze the clauses for passing on taxes and charges to ensure that, as of October, the amount corresponding to the state tax is removed from the charge.

  • Include contractual addenda, if necessary, to record the exemption and avoid future conflicts.

  • In contracts involving multiple types of lease (e.g. commercial space + parking), specify taxation only on the item that remains subject to tax.

Adjustments to billing and collection systems

  • Update your financial management system or ERP to remove the automatic application of the state tax rate to eligible contracts.

  • For periods covering September and October 2025, make the proportional separation: the tax only applies up to September 30th.

  • Ensure that invoices, receipts and bills correctly reflect the change to avoid problems with the Florida Department of Revenue (Florida Department of Revenue).

Clear communication between landlord and tenant

  • Officially inform tenants of the change and how it will impact the monthly fee from October.

  • If there are early or annual payments, adjust the calculations and communicate the differences transparently.

  • This communication is also an opportunity to strengthen the commercial relationship and reinforce the commitment to offering more competitive conditions.

Preparing in advance ensures not only compliance with the law, but also that the positive impact of eliminating the tax is felt immediately and fully by both parties.

To understand the real impact of the end of the commercial rent tax in Florida, it's worth putting the numbers on the tip of the pencil. Below are some simulations that show how much a business could save per year with the change.

Simulation: how much a business can save per year

Example 1 - Small retail store

  • Monthly rent: US$ 3,000

  • Tax rate: 5% (state average + local rate)

  • Before the change: US$ 150/month tax = US$ 1,800/year

  • After the change: US$ 0 tax = US$ 1,800/year savings

Example 2 - Medium-sized office

  • Monthly rent: US$ 5,000

  • Tax rate: 5,5%

  • Before the change: US$ 275/month tax = US$ 3,300/year

  • After the change: US$ 0 tax = US$ 3,300/year savings

Example 3 - Logistics shed

  • Monthly rent: US$ 12,000

  • Tax rate: 6% (in some counties)

  • Before the change: US$ 720/month tax = US$ 8,640/year

  • After the change: US$ 0 tax = US$ 8,640/year savings

Comparison before and after the change

Type of property Monthly Rent Average rate Annual Tax Before Annual Tax After Annual savings
Retail store US$ 3,000 5% US$ 1,800 US$ 0 US$ 1,800
Office US$ 5,000 5,5% US$ 3.300 US$ 0 US$ 3.300
Logistics shed US$ 12,000 6% US$ 8.640 US$ 0 US$ 8.640

This reduction is even more significant when you consider that many commercial contracts run for at least 3 to 5 years. In the case of the logistics shed above, for example, the total savings on a 5-year contract would exceed US$ 43 thousand.

With the change, entrepreneurs can use the money to invest in their own growth, and investors have an extra argument to attract and retain tenants.

The end of the commercial rent tax in Florida marks a new chapter in the state's business environment. The measure eliminates a cost that for decades was a negative differential and positions Florida as one of the most competitive places in the United States to open, expand or invest in companies.

For entrepreneurs, it means more resources available for innovation, marketing, hiring staff and strengthening the brand. For investors, it represents a commercial real estate market with greater potential for occupancy and appreciation in the medium and long term.

This is the ideal time to act: identify opportunities, negotiate contracts and position yourself before increased demand drives up prices.

O The Florida Lounge can help with the whole process, from researching the ideal commercial location to providing support for setting up the business and starting operations. Our team offers personalized advice to ensure that you make the most of the advantages of this move.

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    Sources used:

    1. Florida Department of Revenue - Tax Information Publication (TIP 25A01-04)
      Elimination of Business Rent Tax and transition rules.

    2. Holland & Knight - Publication on HB 7031
      Details of the law signed by Ron DeSantis and its impact on the market.

    3. Burr & Forman LLP - Article "Florida to Eliminate Sales Tax on Most Commercial Rent"
      Guidance on contracts and proportional billing until September 30, 2025.

    4. GrayRobinson - Real Estate and Land Use Insight
      Explanation of the scope of the exemption and cases that still remain taxed.

      Gulfshore Business - "Florida Business Rent Tax Ends"
      Economic context and estimated financial impact for companies.

    5. My News 13 - "Florida business owners will see significant rental tax relief"
      Repercussion of the measure on the local market.

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