I'm Canadian and I Rent My Florida Condo on Airbnb. Is That Different From a Normal Rental? Yes, in Five Places

The core of the US tax treatment is the same whether a Canadian rents a Florida condo to a tenant for a year or to guests by the night: rental income from US real property, taxable in the US, with the section 871(d) election to be taxed on net, FIRPTA on sale, and a Canadian return with a credit. Five things are different for the short-term host, and each has its own form or rule: the owner's personal use and how it limits deductions, whether the activity is a business rather than a rental, Florida's transient rental taxes and licensing, the platform's role as a withholding agent, and the 14-day exclusion that only a short-term host can use.

Key takeaways

• Personal use. A long-term landlord has none; a short-term host usually does. Personal-use days reduce the deductible share of expenses and, above the greater of 14 days or 10% of rental days, cap deductions at rental income (no loss).
• Character. A long-term rental is passive rental income. A short-term rental with average stays of seven days or fewer, or with substantial services, is not a passive rental activity and can be a US trade or business, changing the reporting (Schedule C versus E), the loss rules, and the QBI deduction.
• Florida. Long-term leases (more than six months) are exempt from Florida's transient rental taxes; short-term rentals pay the 6% state tax and the county tourist tax on every night, need a state vacation rental licence, and are subject to condo and municipal restrictions.
• The platform. A long-term tenant pays rent directly (no withholding unless a property manager withholds); a short-term platform is a withholding agent that takes 30% of foreign hosts' payouts without a W-8ECI and issues a 1042-S.
• The 14-day rule. A residence rented fewer than 15 days a year produces no US taxable income; only a short-term host can use it.
• Same in both: the 871(d) election, depreciation, FIRPTA on sale, the Canadian T776 with the foreign tax credit, and the T1135.

Personal use

A long-term rental has no personal-use days (the tenant has possession), so all expenses are rental expenses and a loss is allowed subject to the passive loss rules (suspended for a non-resident until sale). A short-term rental that the owner also uses has personal-use days, and section 280A allocates expenses between rental and personal use by days and, where personal use exceeds the greater of 14 days or 10% of rental days, limits rental deductions to rental income. A snowbird who uses the condo for four months and rents it for four cannot deduct more than the rent produces; the excess carries forward.

Personal use includes the owner's use, use by family (even at fair rent), and rental to anyone below fair rent. Days spent working substantially full-time on repairs and maintenance are not personal use.

Character of the income

The passive activity regulations treat a rental with an average period of customer use of seven days or fewer (or 30 days or fewer with significant personal services) as not a rental activity; and case law treats a rental with substantial services (beyond the customary furnishing, utilities, and cleaning between guests) as a trade or business. A typical Airbnb condo cleaned between guests is a rental activity for most purposes and reported on Schedule E with the 871(d) election; one where the host provides meals, daily housekeeping, or concierge service is a business on Schedule C, effectively connected by nature (no election needed), potentially eligible for the QBI deduction, and (for a US resident) subject to self-employment tax. A Canadian resident owes no US self-employment tax under the totalization agreement either way.

For a non-resident, the practical differences are the form and the loss rules; the tax rate on net income is the same graduated schedule.

Florida

Long-term rentals (a lease of more than six months) are exempt from Florida's transient rental sales tax and tourist development taxes. Short-term rentals pay 6% state sales tax plus the county tourist tax (5% to 6% in the South Florida counties) on every night; platforms collect and remit in most counties. Short-term rentals need a Florida DBPR vacation rental licence if rented more than three times a year for periods under 30 days; many cities (Miami Beach, Fort Lauderdale) restrict or license short-term rentals separately; condo associations often prohibit them.

Property tax is the same (non-homestead) for either.

The platform

A long-term landlord receives rent directly; withholding on a non-resident's rent applies only if a US property manager or agent handles it (the agent must withhold 30% unless the owner provides a W-8ECI). A short-term platform is a withholding agent by design: it withholds 30% of gross payouts to a foreign host without a W-8ECI, reports on Form 1042-S, and collects the transient taxes. The host needs an ITIN and a W-8ECI to stop the withholding, and a 1040-NR to recover what was withheld before the form was in place.

The 14-day exclusion

Only a short-term host can use section 280A(g): a residence rented for fewer than 15 days in the year produces no US taxable rental income and no deductions. A long-term rental cannot be under 15 days by definition. Canada taxes the rent regardless.

What stays the same

The section 871(d) election on the 1040-NR to be taxed on net; depreciation of the building over 27.5 years; FIRPTA withholding of 15% on sale, reducible by Form 8288-B; depreciation recapture on sale; the Canadian T776 reporting the rent in Canadian dollars with a foreign tax credit for the actual US tax; the T1135 if foreign property exceeds $100,000; the US estate tax analysis on the property with the treaty proration.

Worked example

A Toronto owner compares two plans for a Fort Lauderdale condo: a twelve-month lease at $3,500 a month, or Airbnb at $250 a night for 180 nights with 30 days of personal use.

• Long-term. $42,000 of rent; no personal use; full expense deduction; a small net after depreciation; 871(d); no Florida transient tax; no platform withholding (tenant pays directly); T776 and T1135 in Canada.
• Short-term. $45,000 of gross bookings; 180 rental days and 30 personal days: 86% of expenses allocable; deductions capped at rental income (irrelevant here; there is net income); Florida 6% plus Broward 6% collected by Airbnb from guests; DBPR licence; W-8ECI with an ITIN to Airbnb; 871(d); a higher net after the platform fee and cleaning costs; T776 (basic services) and T1135 in Canada.
• Difference. More gross, more expenses, more forms, and the personal-use allocation; the same tax framework.

Official sources

"There's a special rule if you use a dwelling unit as a residence and rent it for fewer than 15 days. In this case, don't report any of the rental income and don't deduct any expenses as rental expenses." — Internal Revenue Service, Topic No. 415, Renting Residential and Vacation Property, https://www.irs.gov/taxtopics/tc415

"If an NRA owns or holds in interest in real property located in the U.S. and holds the property for the production of income, then the NRA can elect under Internal Revenue Code (IRC) 871(d) to treat all income from U.S. real property as effectively connected income with the conduct of a trade or business in the U.S." — Internal Revenue Service, Nonresident Aliens — Real Property Located in the U.S., https://www.irs.gov/individuals/international-taxpayers/nonresident-aliens-real-property-located-in-the-us

"Florida's 6% state sales tax, plus any applicable discretionary sales surtax, applies to rental charges or room rates paid for the right to use or occupy living quarters or sleeping or housekeeping accommodations for rental periods of six months or less, often called 'transient accommodations' or 'transient rentals.'" — Florida Department of Revenue, Sales and Use Tax on Rental of Living or Sleeping Accommodations, https://floridarevenue.com/Forms_library/current/brochure/gt800034.pdf

"You must give Form W-8 ECI to the withholding agent or payer if you are a foreign person and you are the beneficial owner of U.S. source income that is (or is deemed to be) effectively connected with the conduct of a trade or business within the United States." — Internal Revenue Service, About Form W-8ECI, https://www.irs.gov/forms-pubs/about-form-w-8eci

Practitioner note

Short-term is the same rental with five extra moving parts, and the personal-use rules are the one that changes the numbers. A host who uses the condo and rents it should expect no deductible loss, an allocation by days, a platform that withholds until the ITIN and W-8ECI are in place, and Florida taxes on every night. The rest is the long-term rental file with a busier calendar.

See also: For the full sequence of a Canadian move to Florida, see the Canada-to-Florida tax guide, and browse every cross-border tax topic guide, organized by situation.

Next step

Fairlight prepares the personal-use and character analysis, the platform withholding forms, and the annual 1040-NR and Canadian returns for a short-term host. See cross-border pricing or book a call.