How Florida’s New Homestead Exemption Could Affect Property Tax Bills

Florida homeowners could see a larger property tax break, but local governments may feel the squeeze.

Florida homeowners are set to get some relief from rising property tax bills. Voters approved Amendment 3 by roughly 62%, according to the Associated Press, clearing the 60% threshold needed to pass and paving the way for a much larger homestead exemption on eligible primary residences.

Still, the change will not take effect right away, and not every homeowner will be able to claim the full benefit once it does. Here’s what to know.

Voters back a bigger Florida homestead property tax exemption

The main effect of Amendment 3 is to increase how much of a home’s assessed value can be shielded from non-school property taxes. Under the measure, the additional Florida homestead exemption rises from $50,000 to $150,000 in 2027, then to $250,000 in 2028.

Beginning in 2029, that amount will increase with inflation.

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That could make a meaningful dent in a homeowner’s property tax bill.

For instance, if a primary Florida home is assessed at $400,000, the new exemption would shield $250,000 of that value from non-school property taxes in 2028, leaving $150,000 still subject to those taxes. Actual savings would depend on the local tax rate.

Keep in mind that the larger exemption applies only to non-school property taxes. The current $25,000 homestead exemption for school taxes remains unchanged. And if you own more than one home in Florida, the exemption applies only to your main residence.

Timing also matters. Homeowners who had a permanent Florida residence by the qualifying cutoff date and meet the homestead rules can receive the larger benefit as the measure phases in.

People who establish Florida residency after that point will have to wait longer.

• They will initially get the existing $50,000 exemption, adjusted for inflation beginning in 2028, and will become eligible for the larger exemption in their fifth year of receiving it.
• Starting in 2030, counties and municipalities may vote to shorten that waiting period if they determine there is a critical local need.

Also, under Amendment 3, beginning in 2027, the annual assessment cap for non-homestead properties — including many rentals, second homes, and commercial buildings — falls from 10% to 5%. The limit applies to assessed value, not the property tax bill.

Concerns over local government funding

A bigger tax break for homeowners may sound appealing, but it comes with a trade-off: Local governments depend heavily on property taxes to pay for services residents use every day, including police and fire protection, emergency medical services, road repairs, drainage projects, parks, and libraries.

A loss of property tax revenue could force local governments to cut spending, trim services, or look for other funding sources.

• Florida’s Revenue Estimating Impact Conference projects that Amendment 3 could reduce local property tax revenue by nearly $5 billion in 2027-28, rising to $8.8 billion the following year and nearly $11.9 billion by 2031-32.
• The estimates include both the larger homestead exemption and the lower assessment cap on other properties.

It is also worth noting that the amendment restricts how counties and municipalities can spend property tax revenue. It limits spending to certain purposes, including public safety, education, infrastructure, natural resources, debt obligations, and employee retirement benefits.

Critics say that does not guarantee police and fire departments will keep the same funding or spare communities from difficult budget choices.

Florida renters, meanwhile, do not qualify for the homestead exemption because it is reserved for eligible owner-occupied homes. Landlords may factor changes in their property tax costs into rental decisions, though it remains to be seen whether rents will rise because of the amendment.

Could Florida reduce or eliminate property taxes further?

The $250,000 exemption may not be the end of the story for Florida property taxes. Amendment 3 also opens the door to potentially larger tax breaks for some homeowners.

• The Florida Legislature must create a process that lets counties and municipalities raise the homestead exemption for their own property tax levies.
• In some cases, that could eventually mean exempting the full assessed value of a qualifying home. Florida has long debated whether property taxes should be eliminated entirely.
• Special taxing districts may also increase the exemption, but only with voter approval.

The first changes under the measure are scheduled to take effect at the start of 2027.

If you own a home in Florida, keep an eye out for updates from your county property appraiser as the new rules move toward implementation.