Leasing to pay taxes
Question: I have lived on a canal in Cape Coral for the past 12 years, and I have a sailboat. Each May I sail around various ports in Florida and the Bahamas, and I return around September. I was thinking of leasing my house for three months, as the income would pay for the entire year’s worth of property taxes. Is this a good idea, and do I need a written lease for such a short rental?
Answer: The rental market in Cape Coral continues to be strong, so your idea to lease the property is understandable. However, there are many items to consider besides the rental income. First, assuming you are homesteaded, you will endanger your homestead tax deductions, which could be very significant if you are well under the save our homes cap. Renting your home for more than 30 days per year for 2 calendar years will cause you to lose your exemption. Florida homestead laws can be confusing before you decide to go forward with renting your home you should seek professional advice.
As for the lease itself, here too can lie a trap for the unwary. Florida statutes provide for many requirement that a lease must possess. Moreover, you want to protect yourself with a written lease that details all of the rights, and responsibilities, the tenants will have under that lease. For instance, if you return from your travels and the tenant refuses to leave, an action in eviction will be more difficult and expensive if you cannot show the tenant doesn’t have a right to possession.
Leasing your home can be a very wise financial decision depending on the circumstances. Consider all the legal and tax costs, as well as the potential loss of homestead benefits, prior to making a decision on whether to go forward with a rental.
Eric P. Feichthaler has lived in Cape Coral for 27 years and graduated from Mariner High School in Cape Coral. After completing law school at Georgetown University in Washington, D.C., he returned to Southwest Florida to practice law and raise a family. He served as Mayor of Cape Coral from 2005-2008, and continues his service to the community through his chairmanship of the Harney Point Kiwanis Club KidsFest, which provides a free day of fun and learning to thousands of Cape Coral families, and funds numerous scholarships. He has been married to his wife, Mary, for 13 years, and they have four children together. Recently, he earned his board certification in Real Estate Law from the Florida Bar. He is also a Supreme Court Certified Circuit Civil Mediator.
This article is general in nature and not intended as legal advice to anyone. Individuals should seek legal counsel before acting on any matter of legal rights and obligations.