Short-term rentals in Florida: licensing, taxes and the policy that actually responds

What counts as a vacation rental in Florida

For the State, a vacation rental is a unit in a condominium or cooperative, or a home with up to four units, that operates as transient public lodging and is not a timeshare. The Division of Hotels and Restaurants of the Department of Business and Professional Regulation (DBPR) requires a license if the entire unit is rented more than three times in a calendar year for periods of less than 30 days or one calendar month, whichever is less, or if it is advertised or held out to the public as a place regularly rented to guests¹.

DBPR issues vacation rental licenses for condominiums and for dwellings, such as single-family homes and buildings with four units or fewer, and during its inspections it records observable fire safety items and reports possible violations to the State Fire Marshal¹. DBPR notes that even rentals that do not need its license may still be subject to city, county or other local authority jurisdiction¹, and state law leaves room for local rules that do not ban vacation rentals or limit their duration or frequency².

Local, condominium and association rules, and taxes

Florida law generally prevents cities and counties from banning vacation rentals or regulating their duration or frequency, except for local rules adopted on or before June 1, 2011². Local governments can still regulate other matters, such as registration, parking, trash or noise, within what the law allows.

That protection applies to local governments, not to private rules. A condominium declaration or the documents of a homeowners association can limit short-term rentals, set minimum lease terms or require guest registration. Before you buy or publish a listing, have your attorney review those documents.

There are also taxes. The Florida Department of Revenue explains that renting accommodations for six months or less owes state sales tax, plus the county discretionary surtax where it applies, and that counties may levy local transient rental taxes such as the tourist development tax^3,5. Some platforms collect and remit part of these taxes; confirm with your CPA which ones remain your responsibility.

Why a homeowners policy may not respond

The National Association of Insurance Commissioners (NAIC) warns that most homeowners or dwelling policies are not designed to cover accidents arising from short-term rentals⁴. It explains that a homeowners policy usually covers a visitor's fall, but that if the person is a paying guest, the claim might be excluded⁴.

The NAIC adds that if the property is listed with any frequency, the policy will likely treat the activity as a home-based business, and homeowners policies usually exclude or limit that coverage⁴. It also notes that some platforms offer insurance to hosts, while others recommend contacting your agent⁴. Whatever a platform provides comes with its own terms and does not replace a review of your own policies.

Coverage options for a property you rent out

The NAIC suggests talking with your agent about home-sharing and considering a landlord policy, which can cover the home, other structures, contents, lost rental income from damage, legal fees and liability claims⁴. Depending on the use, the alternatives include a short-term rental endorsement on your current policy or a policy designed for rental properties.

• Disclose the real use of the property: how many nights it is rented, whether the family uses it and who manages it.
• Confirm whether your umbrella responds for a property you rent out and what it requires as underlying coverage.
• If the property is a condominium unit, coordinate your unit policy with the association's master policy.
• Review flood coverage separately, because a homeowners policy does not include it.
• Keep the property manager's contract and the manager's certificate of insurance.

Pools, docks and other guest risks

Seasonal homes in Florida often come with pools, docks, boats, personal watercraft or golf carts. For a guest who does not know the property, each one is a separate risk. Lending the boat or the golf cart to a guest can fall outside both the homeowners policy and the rental policy, so put in writing which equipment is not part of the rental.

The property manager matters too. A clear contract defines who is responsible for cleaning, maintenance, hurricane preparation and emergencies, and whether the manager carries its own liability insurance. During a hurricane warning, someone must decide whether to cancel a booking, how the home is secured and who inspects it after the storm passes.

International guests and large groups deserve extra attention. A well-drafted rental agreement, with house rules accepted before arrival, a deposit and the identity of the person who books, does not replace insurance, but it makes any claim easier and helps show that the property is managed with care. If the family also uses the home, keep a clear record of the periods of personal use and the periods it is rented.

How to reduce the risk

These steps help prevent claims and document that the property is managed with care:

• Confirm whether you need the DBPR license and obtain it before hosting guests¹.
• Install pool barriers, alarms or covers, and leave clear safety instructions for guests.
• Lock away boats, personal watercraft, golf carts and their keys.
• Install smoke and carbon monoxide detectors, fire extinguishers and a posted evacuation plan.
• Use water leak sensors and automatic shutoff valves, especially between stays.
• Set written rules on maximum occupancy, parties, pets and dock use.
• Keep a written hurricane plan for the home and for bookings during the season.
• Photograph the property and its contents before each season and keep receipts for improvements.

If you want to review how your rental property is protected, write to me.