Buy or Lease Commercial Property in Florida: 2026 Math

Two numbers changed the math on whether to buy or lease commercial property in Florida this year. The state no longer charges sales tax on commercial rent. The bank prime loan rate, a base rate banks use to price business loans, sat at 7.00 percent on November 2, 2026. Both matter to a business owner asking whether to buy or lease commercial space: one lowers the cost of renting, the other sets the cost of borrowing.

This article puts the two columns side by side, with the 2026 rule behind each line, so your own comparison starts from sourced figures.

Should my business buy or lease its space in Florida?

Four inputs decide it: how long the business stays, the cash a down payment pulls from operations, what the lease adds to base rent, and today's borrowing cost. Since October 1, 2025, Florida charges no state sales tax on commercial rent, which lowered the lease column. Prime at 7.00 percent sets the financing line in the buy column.

The sections below take each 2026 change in turn, then line the two columns up in one table.

What changed for the lease column: no state sales tax on commercial rent

Florida Department of Revenue Tax Information Publication (TIP) 25A01-04, dated July 24, 2025, says the state sales tax on commercial rent under section 212.031 ended October 1, 2025. The repeal came from sections 37 and 49 of Chapter 2025-208, Laws of Florida, which the chapter law's first page identifies as House Bill 7031. No state sales tax or discretionary sales surtax (the county surtax) applies to rent for rental or occupancy periods beginning on or after that date. The TIP's examples of covered rentals are office space, retail space, warehouses and self-storage units.

On $8,000 of monthly base rent, the old 2 percent state rate alone came to $160 a month, or $1,920 a year, before any county surtax. That is our arithmetic from the TIP's own 2 percent example, not a figure the TIP prints.

Three things stay taxable, and they show up in real leases. Rent for periods through September 2025 is still taxed, even if it is paid later. The TIP's example is August 2025 rent paid in October, which still owes the 2 percent state tax plus any county surtax. Parking or storage spaces for motor vehicles, boat docking and aircraft tie-down space stay taxed under section 212.03. A parking charge billed separately in a lease can therefore still carry tax. Transient rentals of six months or less stay taxed as well.

A tenant who paid tax on rent for an exempt period gets the refund from the landlord, not from the Department (TIP question 12). The landlord refunds the tenant first and then files Form DR-26S with proof of the refund (question 5).

What changed for the buy column: prime, Amendment 3 and depreciation

The Federal Reserve's H.15 release dated November 3, 2026 shows the bank prime loan rate at 7.00 percent on every day listed, October 27 through November 2, 2026. The release's footnote describes prime as the rate posted by a majority of the 25 largest insured U.S. commercial banks. It calls prime one of several base rates banks use to price short-term business loans. Your lender's quote will add its own margin and terms to whatever index it uses; the H.15 figure is the base, not the rate on the term sheet. The release comes out weekly, so the figure to use is the one posted the week you price a loan.

Florida voters approved Amendment 3 on November 3, 2026. NBC6's results page, updated November 4 at 12:02 am with 99 percent of the expected vote counted, showed 62.01 percent yes and 37.99 percent no. NBC6's October explainer said the amendment needed at least 60 percent to pass.

For a building owner, the part that matters is Article VII, section 4(h) of the enrolled resolution, CS/HJR 1-F. For all levies other than school district levies, the yearly increase in the assessed value of non-homestead real property has been capped at 10 percent. Beginning January 1, 2027, that cap becomes 5 percent. Two cautions come from the same texts. The cap limits assessed value, not the tax bill; NBC6's explainer says plainly that it does not mean the bill can only rise 5 percent a year. And a sale can reset the clock: the resolution lets the legislature assess the property at just value after a change of ownership or control (section 4(h)(4)). That includes a change of ownership of the legal entity that owns the property.

Internal Revenue Service Publication 946 (2025 edition), How To Depreciate Property, sets the section 179 limit at $2,500,000 for tax years beginning in 2025. The limit shrinks dollar for dollar once the cost of section 179 property placed in service in the year passes $4,000,000. For tax years beginning in 2026, the same publication lists $2,560,000 and $4,090,000. Land, buildings and their structural components do not qualify, so the purchase price of the building itself is not section 179 property.

What can qualify, by election, is qualified section 179 real property. That covers qualified improvement property, meaning an improvement to the interior of a nonresidential building made after the building was first placed in service. It also covers roofs, heating, ventilation and air-conditioning property, fire protection and alarm systems, and security systems added to nonresidential real property. Publication 946 also says Public Law 119-21 reinstated the 100 percent special depreciation allowance for qualified property acquired and placed in service after January 19, 2025. The law is commonly called the One Big Beautiful Bill Act. For a buyer, the practical reading is that the fit-out, the roof and the building systems may be deductible far faster than the shell. A tenant who pays for its own interior build-out faces the same question on the lease side.

Buy or lease commercial property in Florida: the side-by-side

The table lines up the costs that differ, with the 2026 rule behind each one. Lines that are the same either way, such as utilities and the business's own insurance, are left out.

Gross lease vs net lease in Florida: what the rent number covers

Two leases with the same base rent can cost very different amounts, because the lease decides who pays property tax, building insurance and common-area maintenance. In a gross lease the landlord covers those costs out of the rent. In a net lease the tenant pays some or all of them on top of base rent, and a triple net lease passes through all three. Read the pass-through clause before comparing rent to a mortgage payment. A net lease tenant is paying the landlord's property tax. From 2027 the 5 percent assessment cap limits the assessed value behind the tax that gets passed through.

The lease's built-in rent increases are the other line to read. Whatever percentage the lease states compounds every year of the term. No figure for a "typical" increase is printed here, because none we found traces to a primary source. Our commercial real estate advisory reads these clauses as part of the model.

How a lender sizes the loan: the DSCR

If buying is on the table, the lender's first number is the debt service coverage ratio (DSCR). The smaartloans.com explainer defines it as net operating income divided by total yearly debt service. Its example: $150,000 of net operating income against $100,000 of annual loan payments is a DSCR of 1.5x.

For a building the business will occupy, the payments come out of the business's own cash flow. That is why a 13-week cash flow forecast and the purchase decision belong in the same spreadsheet, and why a fractional CFO often builds both.

What the side-by-side needs before anyone signs

This article explains the rules as the sources state them; it does not advise. Confirm the numbers for your business with your CPA and the lease or contract terms with your attorney before signing either one.

Frequently asked questions