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There’s a small but meaningful change coming to seasonal rentals in Palm Beach County — and it’s good news for both tenants and landlords.
Beginning January 1, 2026, the Tourist Development Tax rate has officially decreased from 13% to 12.5%. While a half-percent reduction may not seem significant at first glance, it can have a noticeable impact over the course of a typical South Florida seasonal lease.
What Changed?
This adjustment stems from a combination of voter action and county legislation, as outlined by the Florida Department of Revenue:
• In November 2024, Palm Beach County voters approved a 0.5% school capital outlay surtax, effective January 1, 2026.
• In April 2025, the County Commissioners passed Ordinance No. 2025-008, repealing the existing 1% infrastructure surtax, effective December 31, 2025.
• As a result, the total state and local sales and use tax rate in Palm Beach County decreased from 7% to 6.5%.
Breaking Down the New 12.5% Rate
The updated Tourist Development Tax is made up of three components:
• 6% Florida State Sales Tax
• 6% Palm Beach County Tourist Development Tax (Bed Tax)
• 0.5% Local Discretionary Sales Surtax
Previously, the discretionary surtax was 1%, which is where the overall reduction comes from.
When Does This Tax Apply?
The 12.5% Tourist Tax applies specifically to rental terms of 6 months or less, including:
• Seasonal rentals
• Short-term leases
• Vacation rentals
Leases that exceed six months are not subject to this tax, which is why some tenants and landlords strategically structure lease terms just beyond that threshold.
What This Means for the Market
For seasonal renters, this change translates to lower overall carrying costs during peak months. While the savings may vary depending on the rental price, any reduction helps in a market where seasonal rates are typically at their highest.
For property owners, this presents a subtle but valuable advantage. A lower tax burden can make listings more attractive when prospective tenants are comparing similar properties.
Final Thoughts
In a competitive seasonal rental market like Palm Beach County, even small financial shifts can influence decision-making. The reduction from 13% to 12.5% may be modest, but it’s a step in the right direction for both renters and property owners heading into future seasons.
