Florida is different from most states in the USA in that there is no state income tax. If you are a homeowner who is making money from renting out your property or you recently sold your home, you have to pay taxes to the US government (federal taxes). There is also a yearly tax issued on the value of the property you own.
If you are a non-resident buyer, it will be wise to invest some money to meet with a professional Florida Accountant who is experienced in working with foreign buyers so that you have a deep understanding of the tax situation before making a real estate investment decision.
Types of Florida Real Estate taxes
Florida has three kinds of taxes related to real estate holdings. First, every property in Florida are estimated a taxable value and owner pay a yearly Florid property tax depending on this value (except schools, government entities, churches) The local municipality is in charge of the taxes paid by these bodies. Secondly, when you sell your home, there might be a capital gains tax on the profit generated from the sale. The third tax only concerns rental properties. In a situation there is net profit o the rental income, there might be Federal tax on the profit realized from renting a property. Also, there is a sales tax for short term rentals which is payable to the local government.
Florida Property Tax
In Florida, property tax goes towards public schools and infrastructure, including libraries, medical services, roads, etc. In recent times, there seems to be some misunderstanding concerning Florida property tax. The tax rate is decided by the local municipality and is similar for a property in spite of who the owner may be. However, there are chances to reduce the property value but not the tax rate. Florida Property tax becomes due from the 1st of March. However, you can go ahead to pay from the 1st of November of the tax year. For every month you pay in advance, you get a 1% discount on your total tax bill.
What Happens If You Don’t Pay Your Property Tax
In Florida, when you don’t keep up with your property tax, you may lose your home. Firstly, the tax collector will put your tax lien for sale, and if you don’t still pay the claim, the tax collector has all rights to sell your home. But before he does that, you will receive several warning notices. If you lose your house, there is a slim chance you can get it back when you pay off the delinquent taxes.
Speak to a real estate accountant and our team to explain your options to you before buying a home in Florida.