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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.

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.

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