Florida Property Tax Proposal: 2026 Details & Analysis

Skyrocketing home values, local spending increases, inflationInflation is when the general price of goods and services increases across the economy, reducing the purchasing power of a currency and the value of certain assets. The same paycheck covers less goods, services, and bills. It is sometimes referred to as a “hidden tax,” as it leaves taxpayers less well-off due to higher costs and “bracket creep,” while increasing the government’s spendin, and rising costs of providing local government services have significantly driven up property taxA property tax is primarily levied on immovable property like land and buildings, as well as on tangible personal property that is movable, like vehicles and equipment. Property taxes are the single largest source of state and local revenue in the U.S. and help fund schools, roads, police, and other services. bills across the country, and Florida is no exception. Over the past couple of years, Florida taxpayers have voiced concerns about the affordability of owning a home. During this same time, Gov. Ron DeSantis (R) has pushed the idea of amending the state’s constitution and completely eliminating property taxes on homestead properties. Because the legislature did not pass legislation to do this during the 2026 regular session, the governor called a special legislative session to make sweeping changes to Florida’s property taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. system.

On June 2, the Florida Legislature passed HJR 1, a joint resolution to amend the state constitution to substantially reduce property taxes on homestead properties by increasing the homestead exemption. The proposed constitutional amendment would also require the legislature to enact a law prescribing a procedure by which local governments could continue increasing the amount of assessed value exempt from taxation, up to the full value of the property.

This proposal, the so-called “Save our Homes from Excessive Property Taxes” amendment, now heads to the November 2026 ballot, putting the future of local public finance decisions in the hands of Florida voters. If approved by at least 60 percent of voters, the proposed constitutional amendment would do the following:

For all levies other than school district levies, it would increase the amount of a homestead property’s value that is exempt from property taxes over time, beginning with a $150,000 homestead exemption in 2027, and increasing it to $250,000 in 2028, with these amounts indexed for inflation beginning in 2029.
It would establish Florida residency requirements needed to qualify for the increased homestead exemption for those moving to the state on or after January 1, 2027. Specifically, taxpayers who move to Florida in 2027 or later would receive a much lower homestead exemption of only $50,000 (on non-school district levies) for their first five years in the state before qualifying for the higher exemption.
For all levies other than school district levies, it would limit increases in the assessed value of all non-homestead property to 5 percent annually beginning in 2027 (down from 10 percent currently).
It would restrict local governments’ ability to use property taxes to finance public services that fall outside the following categories: public safety, education and schools, infrastructure, natural resources, bond issuance and debt service payments, local government employee retirement benefits, and operations and administration expenses related to certain local government employees.

While intended to relieve the growing property tax burden on Florida residents, drastically reducing—and potentially even eliminating—property taxes on the primary residences of most Florida homeowners would shift property tax burdens in highly distortionary ways and make Florida’s tax code far less stable and competitive.

Substantial Property Tax Elimination Would Yield Harmful Economic Consequences

Currently, property taxes are the cornerstone of local government revenues, accounting for 74 percent of local tax collections in Florida as of fiscal year (FY) 2023. Homestead property accounts for 46.6 percent of the just value (market value) and 36.1 percent of the taxable value of all real property in Florida, making it a sizeable share of Florida’s property tax baseThe tax base is the total amount of income, property, assets, consumption, transactions, or other economic activity subject to taxation by a tax authority. A narrow tax base is non-neutral and inefficient. A broad tax base reduces tax administration costs and allows more revenue to be raised at lower rates.. If the proposed constitutional amendment is approved by voters, legislative fiscal analysis estimates local government revenues could be reduced by $4.6 billion in the first year and by $8.4 billion in the second year, but the constitutional amendment includes no plan for how to pay for such a large tax cut.

Eliminating such a sizeable share of Florida’s property tax base would not reduce the cost of providing local government services; it would simply require that the lost revenue be generated elsewhere, including from higher millage rates on all property that remains taxable. If county and municipal governments raise millage rates to recoup the lost revenue, that would result in higher property taxes on the portion of the value of homestead properties that remains taxable, as well as on the many properties that do not qualify for the substantially higher exemption, including the properties of new Florida residents and second homeowners, commercial properties (including apartment complexes), and industrial and agricultural properties. This would make Florida’s property tax system far less neutral and disincentivize the purchase of certain classes of property.

To prevent seismic property tax increases on such properties, policymakers might turn to the sales taxA sales tax is levied on retail sales of goods and services and, ideally, should apply to all final consumption with few exemptions. Many governments exempt goods like groceries; base broadening, such as including groceries, could keep rates lower. A sales tax should exempt business-to-business transactions which, when taxed, cause tax pyramiding. to recoup some of the lost revenue. (Since Florida’s tax structure includes no individual income taxAn individual income tax (or personal income tax) is levied on the wages, salaries, investments, or other forms of income an individual or household earns. The U.S. imposes a progressive income tax where rates increase with income. The Federal Income Tax was established in 1913 with the ratification of the 16th Amendment. Though barely 100 years old, individual income taxes are the largest source, sales taxes and property taxes are the primary sources of state and local tax revenue.) Replacing the lost property tax revenue with sales tax revenue would require substantially higher local and/or state sales tax rates, a sweeping expansion of the sales tax base (likely to more than just final personal consumption), or a combination of these approaches.

Previous Tax Foundation research has examined what the landscape in Florida would look like should the state eliminate all property taxes and replace the revenue with higher sales taxes. Complete property tax elimination would require an average combined state-local sales tax rate of 15.34 percent, without accounting for reduced consumption at higher rates. Regardless, local rates would vary greatly due to differences in population density, property valuations, and economic activity across the state.

Should local sales tax rates be increased substantially—and unevenly—this would distort consumer behavior. Residents of higher-tax counties could shift their purchasing to lower-tax neighboring counties to avoid the sharpest tax increases. Residents of northern Florida would likely engage in cross-border shopping in states like Alabama and Georgia, whose average combined state and local rates are 9.46 percent and 7.49 percent, respectively.

Although HJR 1 would not eliminate all property taxes, substantial sales tax rate increases would still almost certainly be needed if policymakers want to avoid major cuts, and wide variations would still exist across the state in terms of how much additional revenue sales tax rate increases would generate. With local option sales tax rates currently capped at 1.5 percent, current law would not permit most jurisdictions to come anywhere close to recouping the full loss from higher local sales tax rates alone.

In addition to increasing reliance on sales taxes, local officials might also decide to raise existing fees or impose new ones to fill revenue gaps.

If state policymakers instead opt to increase state aid to localities—financed by a state sales tax rate increase or base expansion or both—this would result in a substantial state-for-local tax swap that would weaken the relationship between local taxes paid and local benefits received, which could result in local policymakers and the residents they represent having less control over local spending decisions over time.

Moreover, available options are unlikely to permit full revenue replacement, meaning that most local tax authorities will have to grapple with significant revenue reductions foisted on them by the state, which do not necessarily reflect the preference of local taxpayers.

Ultimately, the property tax is by far the best source of revenue available to finance local governments’ services. Property taxes are transparent, meaning a homeowner knows exactly how much is owed over the course of a year, unlike under a sales tax. Property taxes are widely regarded by economists and public finance experts as economically efficient and aligned with benefits received; they fund the services provided to property owners by local governments. Reliable infrastructure, quality schools, and safe streets not only shape the quality of life for homeowners, but contribute directly to property values, making communities—and the homes within them—more desirable. While Florida residents are understandably concerned about rising property taxes, there are far more appropriate ways of addressing this problem than carving up substantial portions of the property tax base. A well-structured property tax levy limit that limits the growth in property tax collections over time is a far more sustainable and structurally sound approach.

Final Thoughts

Voters must carefully weigh the consequences of restructuring Florida’s property tax. Substantially reducing or eliminating property taxes on most primary residences would not eliminate the need to fund local government services. Rather, it would shift property tax burdens in a nonneutral manner and require heavier reliance on less suitable revenue sources, such as excessively high local sales tax rates and an overly broad sales tax base that harmfully captures many business inputs. While a proposal to phase down property taxes on the primary residences of Florida homeowners may grab headlines, it risks severely undermining the competitiveness of Florida’s overall tax structure and leaving the state worse off.