Florida Homestead Tax Sparks Debate Over Who Will Pay for Local Services

The debate lines are solidifying around Florida's proposed homestead tax rollback, with voters just weeks from deciding whether to radically reform the state's property tax system.

Outgoing Gov. Ron DeSantis championed an initiative to eliminate property taxes. Ultimately, a narrower version of his proposal that preserves school levies and phases in larger exemptions from nonschool taxes is what voters will decide on Nov. 3. 

If voters approve Florida Amendment 3, the state's homestead exemption for owner-occupied houses will rise from $50,000 now to $150,000 in 2027. Then it will rise to $250,000 in 2028. DeSantis estimated the latter threshold would eliminate property tax for 60% of Florida homeowners.

But supporters of the amendment say characterizing it as an elimination of property taxes goes too far. 

“Just as important is what Amendment 3 does not do,” Florida Realtors® President Chuck Bonfiglio Jr. wrote in an op-ed for Realtor.com®. “It does not eliminate Florida property taxes, and the additional homestead exemption does not apply to school district property taxes.”

The two candidates to replace DeSantis as governor, Democrat David Jolly and Republican Byron Donalds, each have weighed in on the potentially major change to the state's budget.

Donalds, who has supported Amendment 3, has said he wants property tax reform in the state, but he has called for a mechanism to replace tax revenues that local police and fire departments will lose.

Realtor.com has approached Donalds' campaign, but did not receive a response to a request for comment on what his plan would be.

"Whether Amendment 3 passes or fails, we are going to reform property taxes in our state with a goal of eliminating homestead property taxes once and for all," Donalds said during his acceptance speech for his party's nomination in August.

Earlier this week, he said he wants to “use the (Florida Taxation and Budget Reform Commission) to study all taxes and feeds, and actually work with local government on what the new tax system looks like, especially when it comes to property in this state.”

Meanwhile, Jolly has become increasingly opposed to the measure. He's concerned that it will deprive local cities of revenue. Instead, he has said he supports a first-time homebuyer exemption.

Jolly, too, did not respond to a request for comment from Realtor.com.

"My concern is I think we all want the math to work," Jolly told WFLA in September. "But it probably just doesn’t, right? There’s a reason firefighters, police officers have come out against it."

But Bonfiglio rejects the premise that tax relief and essential services necessarily have to come at each other's expense.

“While some opponents would have you believe that Amendment 3 forces a choice between helping homeowners and paying for essential local services, that's a false ultimatum, and it does voters a disservice,” he wrote.

How the homestead property tax change could work

The homestead residential property tax makes up about a third of property tax revenues to local governments.

Local municipalities and schools took in about $32 billion from property taxes in 2019. But as Florida property values have risen, the collections have, too. Last year, they took in $59.17 billion. At this rate, they'll collect $83 billion by 2032, the state estimates.

Bonfiglio sees that surge as an argument for relief.

“Homeowners have paid for that growth, and they deserve a share in some relief,” he wrote.

Median annual real estate taxes for homeowners with a mortgage increased from about $2,270 in 2019 to $3,353 in 2024—a 48% increase, according to a new analysis from the National Association of Realtors®.

But the stakes can be much higher for individual homeowners. Realtor.com previously reported on a Florida couple whose annual property tax bill jumped from $15,000 to more than $90,000 after a major renovation triggered a reassessment of their home.

The exemption is limited to permanent residents. In future years, residents who move to Florida will have to remain there for five years before they can claim the tax benefit. And the annual increase in assessed value for nonschool levies would be capped at 5%.

Bonfiglio also points to that assessment cap as a part of the amendment that reaches beyond homeowners, arguing that rental and commercial property owners would gain greater predictability as well.

The Florida Chamber of Commerce estimates the largest share of tax goes to school boards—whose levies are excluded from Amendment 3's expanded homestead exemption—they collected $22.83 billion, or 38.6% of the total last year. Counties took in $20.68 billion, or 35% last year. Cities and independent special districts collected the rest.

But the Florida League of Cities found 85 cities won't be able to fund public safety at the same level, even if they eliminated every other service funded by property taxes. Pensacola, Fort Myers, and Key West are among them.

Bonfiglio argues that the fiscal impact would ultimately depend on how local governments implement the measure.

“Voting yes on Amendment 3 is Step 1, where Floridians decide that homeowners deserve this relief. But we can't forget about Step 2: implementation, where communities will work through how to deliver that relief while keeping public safety and core services first,” he wrote.

What are the potential consequences?

The MidFlorida Credit Union estimated in 2024 that the average homeowner in the state pays around $2,338 a year in property taxes. In more expensive areas like Miami-Dade County or Palm Beach County, taxes can be significantly higher.

Realtor.com has estimated that property values in the state would jump 7% to 9% right away if property taxes were eliminated. That could boost the aggregate value of its housing stock by $200 billion to $250 billion—and make homes less affordable for first-time buyers, says Realtor.com senior economist Joel Berner.

However, it’s important to note that the Realtor.com analysis focused on what could happen if Florida eliminated property taxes altogether, rather than specifically modeling the more limited changes contained in Amendment 3. 

Bonfiglio makes that objection explicit.

“That is not Amendment 3, and it is not what Floridians will be voting for on Nov. 3,” he wrote.

The NAR analysis offers a different perspective, instead looking at the immediate effect of lower property taxes on buyers’ monthly costs.

In its model, cutting property taxes by $200 a month lowered the income needed to afford the median-priced Florida home from about $133,800 to $125,200—a move that would put roughly 242,000 additional households above the affordability threshold.

Among households under 45, NAR estimates about 93,500 more could afford a starter home, including roughly 40,000 younger renters.

Florida homeowners might be thinking of more immediate relief, though. The state has some of the highest homeowners association fees in the country. It is also a center of the nation's property insurance crisis.

But removing the exemption could have long-lasting impacts for those same owners.

On the one hand, cuts to services are going to shrink governments and reduce the services they bring to residents, Neil Schiller, managing partner at Government Law Group, tells Realtor.com.

"Florida is desirable not just for the weather; local and county governments have created an environment that is encouraging for people to come and live in Florida," Schiller says. "By reducing those services, maybe that isn't the case in the future, and that is something that needs to be considered."

What's more, a rise in sales and other taxes would hit the state's tourism industry.

“What does it do from a tourism perspective if the sales tax goes up so much," Schiller says. "Add a 10%, 15%, or 20% sales tax, and you will see a decrease in tourism. It will create a significant further divide between the wealthy and the not wealthy. Then where are we?"

Bonfiglio's rebuttal is that those outcomes are not predetermined by Amendment 3.

“Florida can provide meaningful relief to homeowners now while continuing to fund the priorities that keep our communities safe and strong,” he wrote.

"It's going to be pretty hard to get to 60%" on Amendment 3, Florida Chamber of Commerce CEO Mark Wilson says. But he also notes that the state's Tax and Budget Reform Commission could return with a new idea in 2028.

For Bonfiglio, though, the case ultimately comes back to the immediate pressure on household budgets.

“Florida families cannot control every cost that is putting pressure on their budgets, but this Election Day, they can address one of them,” he wrote.

Allaire Conte contributed to this report.

Editor’s note: This article is being updated regularly as coverage of Amendment 3 develops in the lead-up to the Nov. 3 election.