Florida’s Commercial Lease Tax Repealed: Landlords and Tenants Both Win

On October 1, 2025, Florida is NO LONGER the only state in the country with sales tax on commercial rent!

Thanks to HB 7031, both landlords and tenants stand to benefit from a simpler, cheaper, and more competitive leasing environment.

For high-growth markets like Tampa Bay, this change supports continued economic expansion and makes deal-making easier on both sides of the table.

Why It’s a Win for Landlords

• Lower Gross Numbers = Higher Demand
  Without the 4.5% rent tax, advertised lease rates drop without cutting NOI. That makes properties more competitive.

• Smoother Renewals and Lease-Up
  Tenants focused on total occupancy costs now see cleaner numbers, which helps with retention and absorption.

• Simplified Accounting
  No more DR-15 filings or remitting sales tax. That’s one less admin burden for property owners.

Why It’s a Win for Tenants

• Immediate Cost Relief
  A tenant paying $8,000/month saves $360/month or $4,320/year beginning in October.

• More Room to Grow
  Lower monthly overhead means more flexibility for small businesses to reinvest or expand.

• Negotiating Leverage
  New leases and renewals can reflect simpler gross structures, without pass-through taxes.

What This Means for Tampa Bay

Tampa Bay is already experiencing strong demand for commercial space, especially from relocations and startups. The repeal of the rent tax:

• Makes vacant spaces more attractive

• Lowers barriers for new retail and office tenants

• Supports the adaptive reuse of underutilized buildings

• Strengthens small landlord portfolios by reducing turnover

This is a tailwind for local development, redevelopment, and long-term asset value.

What to Do Now

Landlords:

• Update lease language to reflect the repeal

• Recalculate asking rents as gross numbers

• Notify tenants proactively—build goodwill

Tenants:

• Ask for confirmation that your lease reflects the change

• Use the savings to re-evaluate space plans or growth opportunities

• Monitor CAM charges and rent statements post-October

HB 7031 is a rare policy win for both sides of the lease. It rewards ownership while reducing cost pressure on the businesses that power our local economy.

If you own or lease commercial space in Tampa Bay, this is the right time to re-evaluate your strategy.

HDC is here to help. Contact us for construction and advisory support that aligns with the new landscape.