Taxation & Income Tax
Non-resident foreigners (aliens) who receive rental income in Florida must
file a federal tax return (form 1040NR), and must also collect and account
for state and local taxes on rental income.
FLORIDA STATE INCOME TAX
If you receive rental income on your home, Florida state tax is due on any
net profit from your rental activities. Owners can deduct a number of
expenses from their income for tax purposes in addition to their usual
running costs, including US mortgage interest and depreciation on the cost
of the property. The cost of up to two inspection visits per year is also
allowable against tax. As a result of these allowances, most rental home
owners do not make a taxable profit on their operations and pay no US income
tax on their rental operations.
FLORIDA STATE & COUNTY TAXES
Rentals for less than 6 months are regarded as transient rentals, and are
subject to a Florida state sales tax and also a county tourist tax. The
homeowner and / or the property management company must register for these
and file a monthly return to the state and the county.
Sales and tourist taxes do not cost the owner anything - the person who
collects the rental (the owner or the management company) charges the tax to
the guest and then pays it over monthly.
The US and UK have a double taxation treaty, to make sure that no taxes are
levied twice on the same income. This means that UK resident taxpayers will
not have to pay income tax on their US rental income that is greater than
what they would pay in the UK.
We and our Orlando colleagues can introduce you to accountants and advisors
in the Orlando area who are experienced in assisting UK-resident rental
homeowners file their US tax returns