9 Real Estate Tax Tips For Out Of State Florida Investors

Florida Property Tax For Investors What You Actually Pay

Florida property taxes are mainly based on a property’s assessed value and the local millage rate set by counties, cities, and special districts. If you are buying in places like Miami-Dade, Hillsborough (Tampa), Orange (Orlando), Duval (Jacksonville), or Lee (Fort Myers), expect the total rate and exemptions to vary by location.

Here is the simple version:

• Assessed Value is what the property appraiser says your home is worth for tax purposes

• Taxable Value is assessed value minus exemptions (if any apply)

• Millage Rate is the tax rate used to calculate the bill

• Your annual bill is generally Taxable Value x Millage Rate

Investor note: most out of state investors do not qualify for Florida’s biggest owner occupant tax break, which leads us to the next tip.

1 Know The Homestead Exemption And Why It Usually Does Not Apply

Florida’s Homestead Exemption can reduce taxable value for a primary residence, and it can also trigger a cap on annual assessed value increases. It is one of the biggest reasons full-time Florida homeowners love their tax bill.

But if you are an out of state investor buying a rental, a second home, or a short-term rental, you usually cannot claim it.

What this means for you:

• You will likely pay taxes based on a higher taxable value than an owner occupant

• Your assessed value can rise faster over time without the same cap protections

If you are relocating and plan to make Florida your primary residence, a screened local Realtor can help you line up timing and documents so you do this correctly.

2 Expect A “Reset” After Purchase In Many Cases

A common surprise for new buyers is that prior tax bills are not a reliable predictor of your future bill. When a property sells, the assessed value often updates closer to current market value.

Translation: last year’s taxes might look low because they were based on an older assessment.

Before you buy, ask for a realistic projection based on:

• Recent sales comps in the neighborhood

• Estimated assessed value after purchase

• Whether any exemptions will apply to your situation

This matters a lot in fast-moving areas like Naples, Sarasota, St. Petersburg, and parts of Palm Beach County.

3 Understand The Difference Between Property Taxes And Income Taxes

Property tax is only one piece. If you rent the property, you also need to think about income taxes.

Two quick points that save headaches:

• Florida has no state income tax, which is great

• You may still owe federal income tax and possibly state income tax in your home state, depending on where you live and how your state treats out of state rental income

This is where a tax pro can be worth it. Your Realtor helps you buy well. Your CPA helps you keep more of what you earn.

4 Know When Short Term Rentals Create Extra Taxes

If you are buying near the beach, the springs, or tourist hubs, you may be planning a short-term rental. Think Destin, 30A, Panama City Beach, Clearwater, or Orlando.

Short-term rentals can involve extra taxes such as:

• Tourist development taxes

• Local lodging taxes

• Platform collection rules that vary by county and city

Also, some communities restrict short-term rentals through HOA rules or local ordinances. You want to know this before you close, not after your first “why was my listing removed” moment.

5 Do Not Ignore Special Assessments And Local District Fees

In Florida, your total tax and fee picture may include charges beyond the base county property tax.

Common examples:

• Community development district fees (CDD) in newer planned communities

• Stormwater, waste, and special district assessments

• Bond related assessments tied to local infrastructure

These can show up on the same bill, and they can materially change cash flow, especially for newer communities around Orlando, Lakewood Ranch, and parts of the Panhandle.