Florida has enacted significant new real estate legislation, including comprehensive condominium reforms aimed at enhancing transparency and affordability, and the complete elimination of the state’s long-standing commercial lease sales tax. These changes are set to profoundly impact property owners, businesses, and the overall real estate market across the state.
Landmark Tax Relief for Businesses
In a move hailed as a major victory for Florida businesses, Governor Ron DeSantis signed House Bill 7031, which completely eliminates the state’s Business Rent Tax (BRT). This tax, in place since 1969, had been gradually reduced over the years, but its full repeal marks a significant milestone.
- Key Takeaways:
- The BRT’s elimination takes effect on October 1, 2025.
- It is expected to save commercial tenants approximately $2.5 billion annually.
- Florida was the only state to impose a statewide sales tax on commercial leases.
- The repeal includes both the state sales tax rate and any discretionary sales surtax levied by counties.
This tax relief is anticipated to provide businesses with more capital for expansion, hiring, equipment purchases, and employee benefits, enhancing Florida’s competitiveness in attracting and retaining businesses.
Comprehensive Condominium Reforms
New legislation (HB 913) addresses concerns arising from previous condominium reforms, focusing on affordability and transparency for unit owners.
- Key Changes:
- Extended Deadlines: The deadline for Structural Integrity Reserve Studies (SIRS) is extended to December 31, 2025. The application of both milestone inspections and SIRS studies is narrowed to buildings with three habitable stories or more, rather than just three stories or more.
- Financial Flexibility: Condo associations gain flexibility in meeting reserve requirements and can use lines of credit to satisfy reserve obligations with majority owner approval.
- Increased Transparency: Associations are now required to post approved Board of Directors meeting minutes for the preceding 12 months on their websites. Buyers’ right to cancel a contract is extended to seven days after receiving governing documents.
These reforms aim to mitigate the financial burden on condo owners while maintaining safety standards and improving access to critical information for prospective buyers.
Broader Real Estate Impacts and Additional Measures
The legislative session also introduced several other laws impacting Florida’s real estate sector:
- Affordable Housing: Allocation of $385 million for state and local affordable housing programs, including down-payment and closing cost assistance.
- Home Fortification: An additional $280 million boost to the My Safe Florida Home Program, assisting homeowners in fortifying properties against storms.
- Squatter Protections: New laws make it easier for property owners, including vacation rental owners and commercial landlords, to remove unlawful occupants.
- Flood Risk Disclosure: Landlords are now required to provide flood risk disclosures to tenants for leases of one year or longer.
While these changes are largely seen as beneficial for property owners and businesses, some lawmakers have expressed concerns that they may not fully address the state’s ongoing housing affordability and property insurance challenges.
Sources
- Florida Eliminates Burdensome Business Rent Tax, | Florida Realtors.
- Realtor-Supported Condo Bill Becomes Law, | Florida Realtors.
- Florida eliminates business rent tax on commercial leases, Gulfshore Business.
- New Florida real estate laws hailed as ‘major victory’ for property owners, MPA Mag.
- Florida Realtors-Backed Laws Take Effect Today, | Florida Realtors.