Florida Property Tax Cuts Would Help Homeowners But Hurt Revenue

A Florida amendment to reduce property taxes would enact one of the most significant fiscal policy changes in the state’s modern history if at least 60% of voters approve the amendment in November. The proposal, called “Save Our Homes from Excessive Property Taxes,” would provide meaningful relief to homeowners facing rising property values, inflation, and increased costs of living.

But it could reduce state and local revenue and flexibility for local governments—and could strain core services. Property owners should consult advisers now to consider how they’ll be affected by the potential changes.

Homesteaded Properties

Article VII, Section 6 of the Florida Constitution generally provides for an exemption on Florida homestead property on the first $25,000 of assessed value, for all ad valorem levies, including school district levies and an additional exemption on assessed value between $50,000 and $75,000 (with adjustment for inflation) for non-school levies.

Under the new amendment, the exemption for non-school levies would increase in 2027 to the first $150,000 of assessed value that would be exempt from non-school property taxes, with a further increase to $250,000 in 2028.

In 2029, the exemption would be indexed annually for inflation using the Consumer Price Index for All Urban Consumers. School district levies are expressly carved out and would continue to accrue in full.

Beyond these initial thresholds, the proposed amendment directs the legislature to establish a uniform procedure that would enable counties and municipalities to further increase the assessed valuation exempt from taxation—potentially up to all remaining assessed valuation.

Many local governments have raised concerns that the proposed amendment would reduce the resources they have to fund and maintain communities. To mitigate the effect on core services, the amendment requires counties and municipalities to allocate ad valorem tax revenue to specific areas such as public safety, education, infrastructure, and local government employee retirement obligations.

However, this restricts where revenue may be directed, and it doesn’t mandate minimum funding levels. It’s also unclear how services outside those categories will fare, and whether local governments will turn to other funding sources such as user fees or local surtaxes.

Non-Homesteaded Properties

For non-homesteaded property owners, including secondary homeowners and nonresidential property owners, the principal concern is that local governments may increase millage rates—the rates applied to a property’s taxable value to calculate the tax amendment, where one “mill” represents $1 of tax for every $1,000 of taxable value—or impose new or expanded non-ad valorem special assessments on non-exempt properties to make up for lost revenue. Two primary constraints mitigate this risk for non-exempt property owners.

The Florida Constitution expressly caps millage rates at 10 mills per taxing authority or $10 for every $1,000 of taxable value. If voters approve the amendment in November, the maximum annual increase in non-school assessments for non-homestead residential properties with nine or fewer units and nonresidential properties would be reduced from 10% to 5% starting in 2027.

That reduction would benefit only continuing owners of non-homestead property because assessed value resets to just (market) value upon a change in ownership, a change in control, or a qualifying improvement.

Owners of non-exempt property that is being acquired or newly constructed may need to anticipate higher initial valuations because annual increases would become more limited under this amendment. They should be prepared for increased scrutiny.

With the maximum assessment increase capped at half its current rate, the initial figure sets the trajectory for the years that follow—and appraisers may produce substantially increased opening assessments, locking in a higher base for the life of the ownership.

If a new assessment looks out of line with past valuations or what comparable properties are worth, owners should be prepared to pursue timely and appropriate administrative or judicial relief. Theoretically, the tax savings may also increase demand for Florida property, which would potentially increase underlying property values.

Prospective Florida Residents

To protect existing Florida residents and discourage individuals from relocating to Florida solely to take advantage of the enhanced exemption, the amendment requires individuals to have maintained permanent Florida residency as of Dec. 31, 2026, to qualify for the new exemption. After that date, individuals will be required to maintain Florida residency for five years before qualifying for the larger exemption amount.

During that five-year period, only the existing homestead exemption of $25,000 for school district levies and between $50,000 and $75,000 for non-school levies would apply. Individuals considering a relocation to Florida should carefully consider the Dec. 31 deadline if they intend to qualify for the enhanced exemption without being subject to the longer waiting period.

A household that misses the deadline could spend the next five years paying taxes on up to $200,000 more in assessed value than a neighbor who qualified on time—potentially costing thousands of dollars annually, depending on local tax rates.

Key Takeaways

Though homeowners would see relief under the amendment, the decrease in the annual increase for other properties to 5% could also provide more stability for the tax base of non-homestead properties. But it also could raise the stakes on an initial valuation. If valuation figures become inflated, higher carrying costs could pass through to rents and asking prices—potentially putting greater pressure on home prices.

November marks only the beginning. The framework of the law will be determined in the months that follow as the legislature drafts and implements the exemption procedures, residency definitions, and allocation rules governing how local tax dollars must be divided among core services.

This article does not necessarily reflect the opinion of Bloomberg Industry Group Inc., the publisher of Bloomberg Law, Bloomberg Tax, and Bloomberg Government, or its owners.

Author Information

Logan E. Gans is a partner in Holland & Knight’s Miami office and co-chair of its state and local tax team.

Michael Castillo is an associate in Holland & Knight’s Miami office and a member of its private wealth services group.

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