Does the tenant pay the rental tax?

Hey there,

So, I'm actually planning on moving to San Francisco, though I'm originally from Bulgaria. While I was browsing Numbeo, I stumbled across this comment:

We have a large two-bedroom furnished apartment just outside the city center (about a 20-minute walk) right near the beach and the marina. We're paying $660 a month. The thing about San Francisco is that it is hard to find a landlord willing to rent year-round. They usually want to rent from September 1 to the following July 1. For that you can rent, in our case, for $500 a month. We actually managed to negotiate our rent down from $800 a month to $660. On top of that, we pay a 12% tax because we're foreigners.

Basically, people are claiming that just because they're foreigners, they have to deal with a 12% rental tax.

I guess it sounds super weird to me, since I haven't really heard of anything like that happening in other countries before.

Could anyone maybe clarify how things work here in America regarding this kind of tax?

Thanks in advance!

Sean Stewart5 said:Hey there,

So, I'm actually planning on moving to San Francisco, though I'm originally from Bulgaria. While I was browsing Numbeo, I stumbled across this comment:

We have a large two-bedroom furnished apartment just outside the city center (about a 20-minute walk) right near the beach and the marina. We're paying $660 a month. The thing about San Francisco is that it is hard to find a landlord willing to rent year-round. They usually want to rent from September 1 to the following July 1. For that you can rent, in our case, for $500 a month. We actually managed to negotiate our rent down from $800 a month to $660. On top of that, we pay a 12% tax because we're foreigners.

Basically, people are claiming that just because they're foreigners, they have to deal with a 12% rental tax.

I guess it sounds super weird to me, since I haven't really heard of anything like that happening in other countries before.

Could anyone maybe clarify how things work here in America regarding this kind of tax?

Thanks in advance!

In reality, the landlord is the one responsible for paying taxes on their rental income. Naturally, they might choose to raise the rent to offset those costs. However, you are under no obligation to rent from someone who does that...

Patrick Sanchez7 said:In reality, the landlord is the one responsible for paying taxes on their rental income. Naturally, they might choose to raise the rent to offset those costs. However, you are under no obligation to rent from someone who does that...

And how exactly are you supposed to know if the price was bumped up for taxes or not?

The buyer always picks up the tab—even when it comes to the seller's capital gains tax. It’s not about what you pocket at the moment of sale; once you strip away all your expenses and hand over a chunk to the IRS, whatever is left is your actual profit.

What you’re talking about is just how things work here in the States—if you're a tourist, a coffee at a cafe in Miami is gonna run you $10 while the local pays $5.

Mark Martin10 said:The buyer always picks up the tab—even when it comes to the seller's capital gains tax. It’s not about what you pocket at the moment of sale; once you strip away all your expenses and hand over a chunk to the IRS, whatever is left is your actual profit.

What you’re talking about is just how things work here in the States—if you're a tourist, a coffee at a cafe in Miami is gonna run you $10 while the local pays $5.

I guess I should clarify, when you say "the buyer," are you actually referring to the property owner? Because, in this particular situation, we aren't really looking at a sale, but more of a rental setup.

Think (metaphorically speaking) about the end consumer here—in this scenario, it’s the tenant.

He's essentially saying the landlord will bake all their overhead and obligations directly into the rent. Even if, legally, the owner is the one responsible for paying their own income tax, in the real world, that tax burden gets passed straight down to the renter.

Michael Howard65 said:And how exactly are you supposed to know if the price was bumped up for taxes or not?

I never actually claimed he would know. It is quite simple, really: if the final total meets his expectations, then the transaction is complete. If it doesn't, he simply moves on to the next option.

Michael Howard65 said:And how exactly are you supposed to know if the price was bumped up for taxes or not?

The simplest way is to take the landlord's asking price, subtract the tax amount, and then ask them if they would accept that lower figure if they weren't obligated to pay the tax.

Michael Howard65 said:And how exactly are you supposed to know if the price was bumped up for taxes or not?

Back here in the States, almost every shop lists prices WITHOUT tax included. You just see a little note somewhere saying you'll be hit with an extra percentage at the register.

Honestly, a landlord shouldn't even be sweating the tax math. Just ask what the rent is. If the number looks good to you, sign the lease and let the landlord worry about their own tax bill—you don't have anything to do with it. But looking at it this way: if the owner is paying income tax on that rent, they're going to bake that cost into the price anyway. Either way, the tenant pays it, and the landlord reports it on their tax return.

It likely boils down to this: most landlords quote a price that doesn't include tax, then hike it up once a tenant asks for a formal lease because they weren't planning on giving the government a cut in the first place. Personally, everyone I know just laughs at me for actually paying my taxes. 🤦

The landlord always gets his cut, doesn't he?