In this video, Gunster real estate lawyer Eric Coffman explains how a person buying real estate in Florida may be liable for unpaid taxes on rental income received by the property owner – and a relatively simple way buyers can protect themselves.
Watch the video now (or watch it on YouTube):
Video produced by TheLaw.TV
Property buyers beware: Florida rental income subject to sales tax
Not everyone knows this, but a Florida property owner has to pay sales tax on the rental income the owner receives.
When you're buying real estate in Florida, there's a potential pitfall.
If the seller hasn't paid that tax, then the buyer can be liable for any unpaid amounts.
There are, however, a few things that a buyer can do when the buyer is acquiring a commercial or residential real estate asset.
For example, the buyer could conduct a sales tax audit of the seller's books and records – but that can be pretty expensive and time consuming.
A better approach is for the seller to provide what's called a Certificate of Compliance from the Florida Department of Revenue, showing that all taxes have been paid.
It's a pretty simple approach and can save a buyer from some potentially large and unexpected liabilities.
