There is a high probability that the federal funds rate will be reduced, with a 92% chance of a 25 basis point cut and only an 8% chance of a 50 basis point cut. Although this rate does not directly determine mortgage rates, it does influence the overall cost of borrowing and can determine the direction mortgage rates will take in the future. Financial markets have already anticipated this move, meaning much of the impact is already reflected in current rates.

In fact, mortgage rates have begun to decline since the weak job reports of August 1 and September 5.

Investors interpreted this data as signs of an imminent Fed taper. If the cut is 25 basis points, there likely won’t be a significant drop in mortgage rates. However, if the Fed surprises with a 50-point cut, we could see a more pronounced decline in financing costs for homebuyers.

Looking ahead, many experts believe the Fed could make more than one cut before the end of the year.

Especially if the economy continues to cool. According to Sam Williamson, senior economist at First American, this could improve housing affordability and stimulate market demand. However, everything will depend on how the economy evolves: any unexpected inflation data or abrupt changes could alter expectations. In short, while mortgage rates won’t drop dramatically immediately, they could continue to trend downward if the cycle of downsizing continues.

Rate cut probabilities for the September 2025 Fed meeting

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C5 | EXP Realty

What Exactly Is Changing?

• The law abolishes Section 212.031 of the Florida Statutes, which had imposed a tax of about 2% plus a local surtax (typically 1–1.5%) on commercial rents. Together, this imposed a combined burden of approximately 3–3.5% on lease payments. 
• Florida had been the only U.S. state to tax commercial rent, so this repeal aligns it with most other states and gives businesses a real financial boost.

Florida had been the only U.S. state to tax commercial rent, so this repeal aligns it with most other states and gives businesses a real financial boost.

When Does the Repeal Apply?

• The new rules apply based on the occupancy period, not when rent is paid. So, rent for any period starting October 1, 2025 or later will be tax-exempt, even if the bill is paid ahead of time

   

• Conversely, rent related to occupancy through September 30, 2025, remains taxable—even if that rental payment is made after October 1 

What Still Remains Taxable?

HB 7031 does not eliminate all rental-related taxes. The following continue to be subject to sales tax under Section 212.03:

• Short‑term residential rentals (under six months)

   

• Parking or storage spaces for vehicles

   

• Boat dockage or marina spaces

   

• Aircraft hangar or storage spaces

   

• Rentals of tangible personal property, such as equipment

   

Estimated Savings

Analysts project that businesses across Florida will collectively save over $1 billion per year as a result of removing the BRT—a substantial relief for small and large commercial tenants alike.

What This Means for You

For Property Owners (Landlords):

• Ensure your billing systems, invoices, and lease agreements are updated so no sales tax is charged for occupancy periods starting October 1, 2025.

   

• Make sure sales tax is still collected for periods up to September 30, even if rent is late or paid afterward.
  

For Tenants:

• Review your 2025 annual reconciliations to confirm that tax is not charged on rent from October onward.
  
• If you use automatic payments, make sure your settings remove tax starting in October.

   

For Buyers of Commercial Property:

The Florida Department of Revenue can audit past taxes for up to three years. To manage successor liability, request a certificate of compliance from the seller—even though the tax no longer applies to future periods.

Update your additional rent reconciliations (e.g., CAM charges) to apply tax only through Q3 2025.

Final Thoughts

The repeal of the Business Rent Tax through HB 7031 marks a major step toward reducing operating costs and simplifying commercial leasing in Florida. By removing this tax, the state has created a more favorable environment for businesses to invest and grow. The key now is for both landlords and tenants to coordinate on implementation to ensure a seamless transition and maximum benefit.

Source: Florida Realtors

Ready to Buy or Sell in Miami’s Fastest-Growing Market?
Whether you’re searching for a luxury new development or looking to sell your property at the right moment, Jester Niño Real Estate offers strategic guidance, market insight, and personalized support to help you make your next move with confidence.

Jester Niño
Broker Associate
C5 | EXP Realty