{"id":10313,"date":"2025-08-21T12:40:54","date_gmt":"2025-08-21T16:40:54","guid":{"rendered":"https:\/\/www.lee-associates.com\/southflorida\/?p=10313"},"modified":"2025-08-21T12:40:54","modified_gmt":"2025-08-21T16:40:54","slug":"tenants-get-break-from-soaring-south-florida-costs-with-rent-tax-repeal","status":"publish","type":"post","link":"https:\/\/www.lee-associates.com\/southflorida\/2025\/08\/21\/tenants-get-break-from-soaring-south-florida-costs-with-rent-tax-repeal\/","title":{"rendered":"Tenants Get Break From Soaring South Florida Costs With Rent Tax Repeal"},"content":{"rendered":"
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BisNow Discusses Market Response to Rent Tax Repeal with Lee & Associates South Florida Principal, Bert Checa<\/h3><\/div><\/div>
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'Tenants Get Break From Soaring South Florida Costs With Rent Tax Repeal'<\/h1>\n
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By Chloe Gallivan<\/a>\u00a0\u2013\u00a0<\/span> BisNow<\/div>\n
August 20th, 2025<\/div>\n

 <\/p>\n

Companies leasing office, retail and industrial space in South Florida have endured some of the fastest-rising commercial rents in the nation, but starting in October, their real estate costs will actually go down.<\/p>\n

The state passed a law this summer that repeals its 2% annual tax on commercial rents, which takes effect Oct. 1. In Miami, where office rents have\u00a0climbed more than 50%<\/a>\u00a0since 2020, the legislation is a welcome, albeit mild, breath of relief for businesses, brokers told\u00a0Bisnow<\/em>.<\/p>\n

Gov.\u00a0Ron DeSantis\u00a0in June signed into law the\u00a0$1.3B bill<\/a>\u00a0entirely eliminating state and local taxes on business rents. House Bill 7031 also added tax holidays for hunting, fishing and camping equipment between September and December and expanded item exemptions for things like batteries and fire safety equipment.<\/p>\n

Florida is the only state to have a dedicated commercial lease tax, and CRE professionals have been pushing for years for its repeal.<\/p>\n

The state introduced the tax in 1969 at 6% and began gradually reducing it in 2017 until dropping it to 2% by last June. The tax applied not only to base rent but also to additional rent charges passed through to tenants. This made fees like common area maintenance, utilities, insurance and property management fees subject to the tax,\u00a0according to Holland & Knight.<\/p>\n

On top of that, most counties also tacked on a local levy of 1% to 1.5% on commercial leases, which is also being removed by the state law, brokers said.<\/p>\n

The savings from the tax aren\u2019t seen as big enough to change the math for companies on space decisions, but the bigger the square footage in a deal, the bigger the savings.<\/p>\n

...<\/p>\n

Miami\u2019s\u00a0office market activity has slowed<\/a>\u00a0from its wave of migration during the pandemic.\u00a0But its average rent\u00a0still increased by\u00a0nearly\u00a010% year-over-year\u00a0to $63.34 per SF, according to a\u00a0second-quarter report. It is now one of the five priciest office markets in the U.S., which would have been unthinkable before the pandemic.<\/p>\n

\"Bert<\/a>Many leases already include an automatic 3% annual rent increase, but this year both landlords and tenants can use the tax repeal to help offset the bump, Lee & Associates South Florida principal Bert Checa<\/strong><\/a> said.<\/p>\n

\u201cI'm coming to the tenants from the landlord side with the great news that we're still going to have the same cost per month as we had last year, because the annual increase on rent is offset by the reduction renewal of the sales tax,\u201d Checa said. \u201cThen I'm going back to the landlord and I'm saying, \u2018We've got to increase the 3%, and the tenant doesn't even feel it because they got the reduction from the sales tax.\u2019\u201d<\/p>\n

Landlords, who are ultimately responsible for paying the tax, typically pass it on to their tenants. But they were still liable for calculating the costs and forking over the funds to the state.<\/p>\n

The repeal also removes that extra layer for brokers and landlords, especially when dealing with tenants that weren\u2019t aware of the tax.<\/p>\n

...<\/p>\n

The tax was sometimes a factor in the negotiation for clients who were expecting to pay a base rent, instead of base rent plus tax, Checa said. Now, it\u2019s one less thing brokers have to worry about.<\/p>\n

\u201cConversations sometimes get started on the wrong foot, because you started off with the question about, \u2018Why is there sales tax on rent?\u2019\u201d Checa said.<\/p>\n

READ MORE...<\/a><\/p>\n<\/div>\n<\/div><\/div><\/div><\/div>

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About Lee & Associates South Florida<\/strong><\/h3>\n

Lee & Associates South Florida is a fully vertical commercial real estate brokerage firm focused on industrial, office, retail, multifamily, investment and land sectors. Our dedicated team of professionals is led by Matthew Rotolante, CCIM, SIOR a 4th generation South Florida native in a family that has owned and operated commercial property here since 1928. Lee & Associates is the largest agent owned brokerage in the nation with Senior Agent\u2019s ability to earn profit share resulting in the highest splits while still receiving full resources, support and leads from our national network. Our collaborative and cheerful culture allows for open communications throughout the company, fostering the sharing of information and best practices to better enable client decision making.\u00a0 The Lee & Associates\u2019 robust national network that sold and leased over $120 Billion in the last 5 years offers clients a cross-market platform of expertise and deal opportunities across all asset specialties and representation roles. For the latest news from Lee & Associates South Florida, visit leesouthflorida.com<\/a>\u00a0or follow us on\u00a0Facebook<\/a>,\u00a0LinkedIn<\/a>,\u00a0Twitter<\/a>\u00a0and\u00a0Instagram<\/a>, our company local news<\/a>.<\/p>\n

About Lee & Associates<\/strong><\/h3>\n

Lee & Associates is a commercial real estate brokerage sales, leasing and management firm. Established in 1979, Lee & Associates has grown its service platform to include over 75 offices\u00a0in the United States and Canada. Lee & Associates is the largest agent owned commercial real estate brokerage where agents get the greatest return for their efforts and hence are more committed and better enabled to provide superior results for their customers. \u00a0For the latest news from Lee & Associates, visit\u00a0lee-associates.com<\/a>\u00a0or follow us on\u00a0Facebook<\/a>,\u00a0LinkedIn<\/a>,\u00a0Twitter<\/a>\u00a0and\u00a0Link<\/a>, our company blog.<\/p>\n<\/div>\n<\/div><\/div><\/div><\/div>

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\n\t\t\t\n\t\t\t\"Lee\n\t\t\t<\/a><\/div>\n\n<\/div><\/div><\/div><\/div><\/div><\/div>","protected":false},"excerpt":{"rendered":"

‘Tenants Get Break From Soaring South Florida Costs With Rent Tax Repeal’ By Chloe Gallivan\u00a0\u2013\u00a0 BisNow August 20th, 2025   Companies leasing office, retail and industrial space in South Florida have endured some of the fastest-rising commercial rents in the nation, but starting in October, their real estate costs will actually go down. The state passed a law this summer that repeals its 2% annual tax on commercial rents, which takes effect Oct. 1. In…<\/p>\n","protected":false},"author":76,"featured_media":10314,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1,105,1811,107,1820,106],"tags":[1845],"class_list":["post-10313","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","category-industrial","category-medical","category-office","category-restaurant","category-retail","tag-bert-checa"],"yoast_head":"\nTenants Get Break From Soaring South Florida Costs With Rent Tax Repeal - Lee & Associates South Florida<\/title>\n<meta name=\"description\" content=\"BisNow Discusses Market Response to Rent Tax Repeal with Lee & Associates South Florida Principal, Bert Checa\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.lee-associates.com\/southflorida\/2025\/08\/21\/tenants-get-break-from-soaring-south-florida-costs-with-rent-tax-repeal\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Tenants Get Break From Soaring South Florida Costs With Rent Tax Repeal\" \/>\n<meta property=\"og:description\" content=\"BisNow Discusses Market Response to Rent Tax Repeal with Lee & Associates South Florida Principal, Bert Checa\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.lee-associates.com\/southflorida\/2025\/08\/21\/tenants-get-break-from-soaring-south-florida-costs-with-rent-tax-repeal\/\" \/>\n<meta property=\"og:site_name\" content=\"Lee & Associates South Florida\" \/>\n<meta property=\"article:published_time\" content=\"2025-08-21T16:40:54+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.lee-associates.com\/southflorida\/wp-content\/uploads\/sites\/62\/2025\/08\/PR-Banner-Bisnow_Bert-Checa.png\" \/>\n\t<meta property=\"og:image:width\" content=\"1250\" \/>\n\t<meta property=\"og:image:height\" content=\"521\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"ssabatier\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"ssabatier\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.lee-associates.com\\\/southflorida\\\/2025\\\/08\\\/21\\\/tenants-get-break-from-soaring-south-florida-costs-with-rent-tax-repeal\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.lee-associates.com\\\/southflorida\\\/2025\\\/08\\\/21\\\/tenants-get-break-from-soaring-south-florida-costs-with-rent-tax-repeal\\\/\"},\"author\":{\"name\":\"ssabatier\",\"@id\":\"https:\\\/\\\/www.lee-associates.com\\\/southflorida\\\/#\\\/schema\\\/person\\\/d5447dfddeb31f214f5f2eb84c74068a\"},\"headline\":\"Tenants Get Break From Soaring South Florida Costs With Rent Tax Repeal\",\"datePublished\":\"2025-08-21T16:40:54+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.lee-associates.com\\\/southflorida\\\/2025\\\/08\\\/21\\\/tenants-get-break-from-soaring-south-florida-costs-with-rent-tax-repeal\\\/\"},\"wordCount\":911,\"image\":{\"@id\":\"https:\\\/\\\/www.lee-associates.com\\\/southflorida\\\/2025\\\/08\\\/21\\\/tenants-get-break-from-soaring-south-florida-costs-with-rent-tax-repeal\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.lee-associates.com\\\/southflorida\\\/wp-content\\\/uploads\\\/sites\\\/62\\\/2025\\\/08\\\/PR-Banner-Bisnow_Bert-Checa.png\",\"keywords\":[\"Bert Checa\"],\"articleSection\":[\"All News\",\"Industrial\",\"Medical\",\"Office\",\"Restaurant\",\"Retail\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.lee-associates.com\\\/southflorida\\\/2025\\\/08\\\/21\\\/tenants-get-break-from-soaring-south-florida-costs-with-rent-tax-repeal\\\/\",\"url\":\"https:\\\/\\\/www.lee-associates.com\\\/southflorida\\\/2025\\\/08\\\/21\\\/tenants-get-break-from-soaring-south-florida-costs-with-rent-tax-repeal\\\/\",\"name\":\"Tenants Get Break From Soaring South Florida Costs With Rent Tax Repeal - 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