Canadian Landlords in Palm Beach: Tax & Rental Guide

Palm Beach is a different category from every other Florida market — it sits at the top of the US luxury real estate pyramid:

• Worth Avenue and the historic estate district. Hermès, Cartier, Tiffany — the retail concentration mirrors Madison Avenue. The estate district sees regular $20M-100M+ transactions.
• Limited supply, restrictive zoning. Palm Beach (the town) is geographically tiny — about 16 square miles. Strict zoning preserves character and constrains supply, supporting long-term value.
• Established Canadian high-net-worth presence. A small but durable population of Canadian families with multi-generational Palm Beach ties. Mar-a-Lago and The Breakers area form the social core.

This is a market for buyers in the $3M+ acquisition range, not entry-level cross-border rental investment.

Palm Beach property tax sits in the same Palm Beach County framework as Boca and West Palm — roughly 1.0-1.3% of assessed value. On a $10M property, that's $100,000-130,000/year in property tax alone (deductible on Schedule E line 16 / T776 line 9180).

The two sub-markets:

• The Island (Palm Beach proper) — old- money estate district, beach-front properties, Worth Avenue area. Highest prices.
• West Palm Beach (across the Intracoastal) — distinct municipality with much broader price range, growing arts and dining scene, the actual airport (PBI) location. Many lower-priced Palm Beach-adjacent opportunities sit here.

The federal IRS treatment of Palm Beach rental property is identical to any US state — non-resident Canadian owners file Form 1040-NR with Schedule E attached, claim deductible expenses, and apply the Section 871(d) election to avoid the default 30% gross-rent withholding.

Florida has no state income tax — federal IRS is the only US income tax obligation. Short-term rentals (under 6 months) are subject to Florida sales tax (6%) plus county discretionary surtax plus county tourist development tax — typically 11-13% combined.

On the Canadian side, you report Palm Beach rental income on Form T776 attached to your T1, converted to CAD using the Bank of Canada annual average rate for the tax year. If your foreign property cost base exceeds CAD $100,000, you also file Form T1135 — use our T1135 Threshold Checker to confirm.

When you eventually sell, FIRPTA withholds 15% of the gross sale price at closing — file Form 8288-B Withholding Certificate at least 90 days before closing to reduce the withholding to your actual estimated capital gains tax. See our FIRPTA Complete Guide for the full process.

Palm Beach property management at the high end is white- glove specialist work — full-service estate management rather than just rental management. Fees often quoted as retainer plus percentage of rental, structured per property.

Considerations specific to Palm Beach:

• Insurance load is substantial. Hurricane insurance on a $10M Palm Beach estate routinely runs $30,000-100,000+/year, depending on construction, flood zone, and coverage limits. Excess flood policies standard.
• FIRPTA at exit on Palm Beach scale is significant. 15% withholding on a $15M sale is $2.25M held by the IRS for 12-18 months until your 1040-NR is processed. Form 8288-B Withholding Certificate is essential — 90-day IRS lead time.
• Estate tax planning is critical. US federal estate tax exposure for Canadian owners of US real property is structured by the Canada-US Tax Treaty, but on Palm Beach-scale properties the planning stakes are substantial. Specialized cross-border estate counsel is essential before acquisition.