Renting out your Florida condo: taxes on both sides of the border (2026)
In short
By default, the IRS withholds 30% of your gross rents. With the "871(d)" election and a 1040-NR return every year, you are instead taxed on net income, after expenses. For a rental of 6 months or less, Florida also collects its sales tax and a tourist tax. In Canada, the income must also be reported, with a credit for the US tax paid.
US side: 30% of gross or tax on net?
| Option | How | Result |
|---|---|---|
| Default | The tenant or property manager withholds 30% of the gross rent | No deductions: often a lot of tax |
| 871(d) election | Form W-8ECI given to the property manager, then a 1040-NR return every year (deadline: June 15, extension possible) | Tax on net income, after condo fees, property tax, insurance, depreciation, etc. |
You must file the return every year to keep the right to deductions. Florida has no state income tax.
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Florida side: taxes on short-term rentals
- Rental of 6 months or less: state sales tax (6%), county surtax (0.5 to 1.5%) and county tourist development tax (1 to 6%).
- You must register with the Florida Department of Revenue, and often with the county.
- Airbnb only collects the tourist tax in about two dozen counties, and VRBO does not collect it: check what remains your responsibility.
- Rental of more than 6 months with a written lease: these taxes do not apply.
Association side: rental rules
The declaration of condominium can impose a minimum rental period, a maximum number of rentals per year and tenant approval (fee of no more than $150 per applicant). A new buyer is bound by the rules already in force: read them before buying. See buying a condo in Florida.
Canadian side
- Worldwide income: US rents must be reported in Canada.
- Foreign tax credit (T2209, line 40500): the tax paid in the United States reduces your Canadian tax, which avoids double taxation.
- T1135: a condo used mainly for personal purposes is excluded. A condo that is mainly rented out must be included if the total of your foreign property exceeds C$100,000.
Key takeaways
- By default: 30% of gross rent withheld by the IRS.
- 871(d) election + 1040-NR every year: tax on net income.
- 6 months or less: Florida sales and tourist taxes on top.
- In Canada: report the rents, claim the foreign tax credit, check the T1135.
The complete guide: buying a condo in Florida (2026)
The market region by region, the 12-step process, 20 questions for the association, every cost, financing, estate planning and resale. 20-page PDF.
See the guide ($39)Official sources
- IRS — Nonresident aliens' real property
- Florida sales tax on short-term rentals (July 2026)
- CRA — Questions about the T1135
- CRA — Foreign tax credit (line 40500)
General information only, not tax advice. Renting out property in the United States creates obligations on both sides: consult a cross-border tax specialist.