Florida homeowners set for major property tax relief after voters back sweeping exemption increase

Florida homeowners are set to see a significant reduction in their property tax burden after voters approved a broad measure that increases the share of home value exempt from taxation.

Amendment 3 won about 62% of the vote, easily clearing the 60% support needed to amend the state constitution.

The homestead property tax exemption will climb from $50,000 to $150,000 on January 1, 2027, and then rise again to $250,000 in 2028.

Starting in 2029, the exemption will be indexed to inflation each year.

The changes affect property taxes that fund local services, but not school district taxes, so homeowners will still pay some taxes on their properties.

Florida's current $25,000 exemption for school district taxes will stay in place.

The biggest winners are likely to be homeowners who qualify for the state's homestead exemption, which is available to people who use a property as their permanent residence.

Still, anyone hoping to benefit from the larger tax break must meet an important deadline.

To qualify for the larger exemption, homeowners must establish Florida residency by December 31, 2026.

People who relocate to the Sunshine State after January 1, 2027, will generally have to wait until their fifth year of homestead exemption eligibility before receiving the expanded benefit.

For current owners, the change could also encourage some to move up the property ladder.

Chris Wands, founder of The Wands Team at Douglas Elliman and a Miami luxury broker with more than $1 billion in career sales, said the expanded exemption could help homeowners who have held back from upgrading because of higher taxes.

“In Florida, one of the biggest financial hurdles for homeowners is stepping up into a new tax basis. A lot of people bought years ago, have a much lower assessed value and are protected by homestead,” he said.

“Even with portability, moving into a more expensive home can mean a significant jump in property taxes. Combine that with homeowners not wanting to give up their low mortgage rates, and you have a lot of people staying put.”

Wands said the largest opportunity may be for existing Florida homeowners who have wanted to move but were deterred by the cost.

The shift could also draw more buyers toward larger homes, newer construction and properties in more desirable areas.

“I think this could unlock some people who have wanted to move but hesitated because of the tax reset,” Wands said.

“We could see more homeowners stepping up into larger homes, newer construction or better-located properties. If more buyers enter the market, that could create additional competition, particularly for desirable luxury homes.”

Wands said he recently sold a home at Greenview at Presidential, a new luxury single-family community in the Aventura area, to buyers who were already planning an upgrade.

Property tax changes were part of the discussion, and the buyers chose to move forward rather than wait for the amendment result.

They believed that if the measure passed and brought more buyers into the market, competition and prices could rise later, he said.

Florida could also attract more wealthy buyers from high-tax states, though Wands said it would be a mistake to expect an immediate wave of newcomers.

“Florida already has a compelling value proposition for wealthy buyers, between no state income tax, the lifestyle and the continued growth of its luxury real estate market,” he said.

“This adds another potential advantage, but I don't think we're suddenly going to see a flood of New Yorkers moving here just because of Amendment 3.”

The amendment also alters the rules for owners of properties that are not their primary homes, including rental properties, second homes and commercial buildings.

For those properties, the annual cap on assessed-value increases will be lowered from 10% to 5%. School district taxes are not included in the change.

Danny Castro, BDO Florida Tax Market Leader, said the reduction could give commercial property owners and investors more certainty about future tax bills.

“For commercial real estate owners and investors, the reduction in the annual assessment-growth cap on non-homestead property is also significant and could provide greater predictability around future property tax costs,” he said.

Castro also cautioned that the headline exemption amount does not mean every homeowner will see the same savings.

“One of the first things taxpayers will need to understand is that the larger homestead exemption does not apply uniformly to every component of the property tax bill. The actual benefit will depend on the property, its assessed value, and the applicable local taxing authorities,” he said.

Even so, the relief for homeowners could carry a substantial cost for local communities.

Property taxes are a major source of funding for local governments, covering police and fire departments, emergency services, road repairs, flood control and other public infrastructure.

A state economic analysis estimated the changes could cost local governments nearly $5 billion in property tax revenue in the 2027-28 fiscal year.

That loss could rise to almost $9 billion the next year, before reaching nearly $12 billion in recurring annual losses by 2031-32.

Critics have warned that the shortfall could force local governments to cut spending and services or look for other ways to raise revenue.

Castro said homeowners should pay attention to how local authorities respond to the loss in revenue.

“Longer term, we'll also be watching how local governments respond and whether adjustments to millage rates, fees or budgets affect the overall economic benefit to Florida property owners,” he said.

Mick Duchon of The Corcoran Group said any reduction in ongoing homeownership costs would be welcome as insurance premiums and other expenses continue to climb.

“With insurance premiums and ownership costs continuing to rise, any meaningful reduction in property taxes is welcome. These are recurring savings that can make a real difference for homeowners over time,” he said.

But Duchon warned that preserving local services remains vital to protecting neighborhoods and home values.

“Homeowners deserve relief, but strong infrastructure, public safety and community services are equally important to protecting property values and maintaining Florida's quality of life.”

Renters will not be eligible for the homestead exemption, although landlords could potentially reflect property tax changes in rental decisions.

The measure takes effect on January 1, 2027.