Florida Eliminates Burdensome Business Rent Tax
Elimination of state and local tax on commercial leases becomes reality with the governor’s signature of a historic tax relief bill. It begins in October. TALLAHASSEE, Fla. — Gov. Ron DeSantis signed a historic $1.3 billion tax relief bill (House Bill 7031) on Monday, which included the complete elimination of Florida’s Business Rent Tax (BRT), a long-standing priority of Florida Realtors®. The removal of the BRT will become effective on October 1, 2025. This final cut to the BRT means commercial tenants in Florida will be saving a total of $2.5 billion annually and represents an important milestone in the state’s efforts to become more competitive in attracting and growing businesses. This elimination includes both the state sales tax rate and the discretionary sales surtax that counties can levy on commercial leases. Removing the BRT provides Florida businesses with the capital to expand, hire more employees, buy new equipment, improve benefits and raise salaries. “Local businesses create the jobs families need to thrive, and communities need to grow. Currently, Florida is the only state charging a tax on commercial leases. By eliminating this tax on the rent businesses pay for their operations, we are helping keep Florida a competitive place to start and grow a business,” said Senator Ed Hooper (R-Clearwater), chair of the Senate Committee on Appropriations. Since 1969, Florida has imposed a sales tax on the rent charged under a commercial lease of property. Taxes on the rental of property by businesses started in 1968, at the rate of 4%. When the general sales tax rate increased to 5% and then 6%, charges for commercial rent increased to those same rates. If the tenant makes payments such as mortgage, ad valorem taxes or insurance on behalf of the property owner, those payments are also classified as rent and are subject to the tax. Commercial property includes land, buildings, office or retail space, convention or meeting rooms, airport tie-downs and parking and docking spaces. It may also include licenses granting the use of property for the placement of vending, amusement, or newspaper machines. The Florida Legislature began reducing the BRT in 2017: In addition to the elimination of the BRT, HB 7031 also permanently removes the sales tax on many disaster- and hurricane-preparedness supplies as well as several safety- and health-related items. Additionally, it creates a permanent annual Back-to-School Sales Tax Holiday for the month of August and a new sales tax holiday this fall for Floridians exercising their constitutional right to hunt and fish. Learn more about this historic tax relief bill here. © 2025 Florida Realtors®
NAR Secures Major Wins for Real Estate in Landmark Tax Reform Bill
WASHINGTON (July 3, 2025) — The National Association of REALTORS® applauds the U.S. House of Representatives on final passage of the sweeping tax reform legislation that delivers significant victories for homeowners, consumers, real estate professionals, and the broader U.S. economy. The House passed the One Big Beautiful Bill Act by a vote of 218 – 214.The legislation now heads to the President’s desk to be signed into law. The One Big Beautiful Bill Act includes multiple NAR-championed provisions designed to support homeownership, drive investment in housing supply, and strengthen the real estate economy—a sector that accounts for nearly one-fifth of the nation’s GDP. “For months, REALTORS® across America have been at the forefront of tax reform, making sure Congress understood that homeownership is not only the cornerstone of the American Dream but a foundation for building wealth and strengthening communities,” said Shannon McGahn, NAR’s executive vice president and chief advocacy officer. “We delivered that message backed by original research, trusted polling data, and the real-world expertise of more than a million REALTORS® living and working in every ZIP code in America.” NAR successfully secured its top five legislative priorities in the final package: “These provisions form the backbone of the real estate economy—from supporting first-time and first-generation buyers to strengthening investment in housing supply and protecting existing homeowners,” McGahn said. “This bill reflects what happens when REALTORS® work together to educate lawmakers and advocate for policies that benefit every American.” Additional Real Estate Wins in the Tax Package Include: The bill also introduces a new “baby bonds” program—a one-time $1,000 government investment for each child born after the law’s enactment. Once matured, these bonds can help future generations build wealth, including saving for a first home.= REALTOR® Advocacy Made the Difference In the final weeks, original polling commissioned by NAR showed overwhelming public support for the bill’s real estate provisions: “We brought these numbers directly to Capitol Hill and to the White House,” McGahn added. “Lawmakers repeatedly told us they appreciated the research, the clear message, and the voices of REALTORS® advocating in their communities. This is what happens when our members—backed by facts and united in purpose—speak up.” About the National Association of REALTORS® As America’s largest trade association, the National Association of REALTORS® is involved in all aspects of residential and commercial real estate. The term REALTOR® is a registered collective membership mark that identifies a real estate professional who is a member of the National Association of REALTORS® and subscribes to its strict Code of Ethics. For free consumer guides about navigating the homebuying and selling transaction processes – from written buyer agreements to negotiating compensation – visit facts.realtor.
Optimism in Commercial Real Estate Investments
The survey found industry challenges won’t stop investment into commercial real estate in 2025, but innovation and changing employee expectations will impact how investments are assessed. CHERRY HILL, N.J.–(BUSINESS WIRE)–Despite rising energy costs, office vacancies, interest rates and economic uncertainties as the industry adjusts to a new administration, recent insights garnered from TD Bank’s survey at the CRE Finance Council Miami found that commercial real estate leaders are still excited for the opportunities this year could bring. More than 200 commercial real estate professionals shared their 2025 outlooks, with 76% believing dropping commercial real estate property values will drive increased investment this year. So, is Commercial Real Estate “Back”? TD Bank’s survey focused on sentiment surrounding the commercial real estate sector, along with what’s driving investment. A few other survey highlights include: – More than half of commercial real estate investors (52%) believe future interest rate movement – specifically lowering rates – will have the biggest impact on the sector, but just 14% expect the biggest business impact to come from changing policies and regulations of the new presidential administration. – The majority (70%) of respondents expect housing material prices to rise in 2025, but only 32% expect it to have an impact on investing in new developments. Return-to-Office Policies and Their Impact As CRE professionals plan their 2025 investments, there’s a rising confidence among investors. That confidence could be driven by return-to-office requirements from companies across the U.S. In fact, the majority (68%) of industry professionals predict that return-to-office requirements are the business-level decision that will have the biggest impact on the commercial real estate market in 2025. However, many investors and property owners aren’t expecting office work to match pre-Covid levels – instead, mixed-use spaces are expected to be the future. The survey revealed that more than two-thirds (68%) of CRE professionals expect mixed-use properties will garner the most traction in 2025. “We’re experiencing a very modest recovery in parts of the office market, but that doesn’t mean the industry should be quick to revert to its old ways. The office segment will continue to face challenges as a whole. As employees return to in-person work, they crave unique, meaningful workplace experiences that make coming into the office a positive experience,” said Hugh Allen, Head of U.S. Commercial Real Estate at TD Bank. “Investors and commercial real estate owners are taking these changing expectations into account when they invest in their next project. This includes amenities like in-office gyms, extended break rooms, and cafeterias – organizations want to create a sense of place for their employees, enhancing their return-to-work experience.” Investment Interest at a Crossroads Amid Various Uncertainties While the majority (70%) of commercial real estate professionals believe that the price of housing materials will rise again in 2025, they are divided when it comes to predicting how this will impact the market, with 38% anticipating continued investment and 32% forecasting an impact on the market’s ability to invest in new developments. Many investors have concluded this interest rate environment is the “new normal.” “The commercial real estate sector will face new challenges in 2025, and a new administration will bring wild cards to the market, but this analysis shows that the right investors are prepared to face those challenges head on,” said Hugh Allen. “Navigating the uncertainties regarding inflation and interest rates will be key to getting the timing right for investors to pull the trigger on acquisitions and developments.” CRE’s Top-of-Mind Tech & Sustainability Initiatives Along with properties, CRE professionals have their eyes on tech investment this year, especially predictive analytics. Three-fifths (60%) of industry professionals expect predictive analytics to have the biggest technological impact on CRE in 2025. This is followed by smart buildings (32%) and efficiency and sustainability advancements (28%), in-line with green initiatives in recent years. “Technology will drive commercial real estate into its next era,” said Allen. “The advancements in artificial intelligence and overall upgrades to how we use innovation in CRE will continue to bear positive outcomes for the investors who use them properly.” As energy costs continue to rise, more than half (55%) of industry professionals believe smart buildings and other technological advancements are the sustainability trend that will make the largest splash. That said, changes in the White House raise questions on the state of sustainability moving forward, with 30% of CRE professionals citing government environmental protections as the most significant sustainability trend in 2025. Survey Methodology This study was conducted at the Commercial Real Estate Finance Council Miami 2025 from January 12-15, 2025. A total of 211 commercial real estate professionals were polled. About TD Bank, America’s Most Convenient Bank® TD Bank, America’s Most Convenient Bank, is one of the 10 largest banks in the U.S. by assets, providing over 10 million customers with a full range of retail, small business and commercial banking products and services at more than 1,100 convenient locations throughout the Northeast, Mid-Atlantic, Metro D.C., the Carolinas and Florida. In addition, TD Auto Finance, a division of TD Bank, N.A., offers vehicle financing and dealer commercial services. TD Bank and its subsidiaries also offer customized private banking and wealth management services through TD Wealth®. TD Bank is headquartered in Cherry Hill, N.J. To learn more, visit www.td.com/us. Find TD Bank on Facebook at www.facebook.com/TDBank and on Instagram at www.instagram.com/TDBank_US/. TD Bank is a subsidiary of The Toronto-Dominion Bank, a top 10 North American bank. The Toronto-Dominion Bank trades on the New York and Toronto stock exchanges under the ticker symbol “TD”. To learn more, visit www.td.com/us.
Growth and Diversification in Property Management Portfolios
Heading into 2025, property management companies face a number of obstacles: They’re challenged to expand their portfolios without compromising the quality of service they deliver to their customers. They’re challenged to grow their revenue in spite of increased costs and flat rent growth in many areas of the U.S. They’re challenged to prove the value of their services to cash-strapped rental owners in a competitive business environment. And they’re challenged to exceed customers’ expectations by balancing the right technology with a human touch—all while keeping up with evolving market conditions and property management industry trends. To help property management companies meet the moment, Buildium and Propertyware banded together with the National Association of Residential Property Managers to survey thousands of property management professionals, renters, and rental owners, as we do each year. We combine insights from our annual survey with market research to help property management companies understand the trends that will impact their success in the year to come. Which property management trends have we identified for 2025? That’s what we’ll cover in this blog post. For an even deeper dive into each of the property management industry trends shaping the current business environment, be sure to download your free copy of our 10th annual State of the Property Management Industry Report. Property Management Trend #1: Most Companies Still Plan to Grow, But at a Slower Pace Portfolio growth remains the top priority for virtually all property management companies in the coming year—but their pace of growth is moderating from the breakneck speed of the last few years. Looking ahead to 2025 and 2026, 91% of third-party property management companies told us they plan to expand their portfolios, according to our most recent Property Management Industry Survey. However, when we asked how much growth they have planned, in comparison with past years, a larger segment of companies told us they plan to grow by 25% or less. How do they plan to accomplish this growth? More than 3 in 4 third-party property management companies will be actively recruiting new clients in the next two years, making this their #1 portfolio growth strategy. But as we’ve seen in recent years, a significant minority of companies are investigating inorganic growth methods, such as acquiring other property management businesses, or purchasing or building new properties of their own. Property Management Trend #2: Companies Are Branching Out to Bring in New Business One of the most significant property management trends for 2025 is portfolio diversification. As virtually all property management companies seek to grow, many are exploring new property types and markets. Our most recent Property Management Industry Survey found that 31% of third-party property management businesses plan to expand the types of properties they manage in the next two years, such as expanding from single-family rentals into multifamily, or from residential rentals into community associations or commercial properties. In addition, 23% of third-party property management companies plan to expand to a new geographic area in the next two years. The results of companies’ efforts to grow are already evident: Comparing this year’s survey responses to last year’s, we saw a 5-percentage-point decrease in the number of companies with less than 100 units under management. Property Management Trend #3: Outpacing Rising Costs Remains a Primary Challenge The latest property management trends show a complex relationship between growth and cost. While portfolio expansion remains a priority across the industry, property management companies face increasing pressure on their bottom line. Though a majority of businesses expect their revenue to increase, they’re anticipating slightly less revenue growth than they did in 2022 and ‘23. What’s causing businesses’ revenue growth expectations to moderate? Costs have continued to increase across the board, with three-quarters of companies reporting that labor costs, property insurance, property taxes, and materials/supply costs have risen over the past year. To cover increased costs in 2025, 63% of third-party property management companies plan to raise rents or resident-paid fees, according to our most recent Property Management Industry Survey. However, rents can only be raised so high when the supply of rental housing is increasing relative to demand, and renters’ wage growth isn’t keeping up. In addition, two services that once reliably generated revenue (leasing/marketing vacancies and purchasing/selling/brokering property sales) have become far less profitable for property management companies as the market has evolved, with renters moving less often and investors buying fewer properties. Property Management Trend #4: Tenant Quality Concerns Necessitate Consistent Screening When we asked property management professionals what they expect their companies’ foremost challenge to be heading into 2025, the most popular response was tenant quality. After focusing their efforts on resident retention over the past year—efforts that have largely proven successful—finding residents who can stay put in their properties for the long term has become a clear area of focus. As we mentioned in the previous trend, when setting rent prices, property management companies are challenged to balance the need to cover rising costs with the need to attract and retain great residents. Current property management industry trends emphasize the importance of robust tenant screening. Finding the right residents for each property requires sophisticated screening procedures to avert fraud and avoid evictions down the line. One respondent described how they’re focused on “finding the best renter possible by being extra diligent and discerning (staying within legal mandates, of course) to ensure we secure conscientious, responsible applicants. We are striving for zero vacancies and fast turnovers.” Property Management Trend #5: Technology is Key to Good Service—But So is a Human Touch Technology adoption stands out among the defining property management trends of 2025, with efficiency ranking as property management companies’ second-highest priority for 2025. Having the right processes and systems in place is particularly important as companies focus on expanding their portfolios, keeping costs down, and improving the customer experience. This reflects a broader trend of leveraging technology to enhance rather than replace human interaction. As one respondent to our Property Management Industry Survey put it: “With the push in prop tech, we have ways to make processes more efficient and automated, meaning our manpower can focus on customer service and identifying areas to increase profit per door.” But having the right tools is