By Abigail Hall
Between inflation, rising car and property insurance premiums and the costs of contending with extreme weather, many Florida homeowners are feeling financially squeezed.
While the ballot box can’t change the risk of floods or hurricanes, a constitutional amendment on the November ballot could reduce homeowners’ costs in the form of lower property taxes. Sixty percent of voters must approve the amendment in order for it to become part of the Florida Constitution.
The average home in the state is worth about US$378,000 as of July 2026, with the median sale price slightly higher, at around $395,000. This corresponds with property taxes of just over $3,000 annually. Floridians in more expensive houses may pay double – or more – than the taxes on a median-priced home.
As an economist living in Florida, I’ve spent the past decade teaching about the economics of government and public finance, analyzing and breaking down policy, policy proposals and their impacts on the Sunshine State.
It can be difficult to navigate all the conflicting information and argumentation surrounding this proposed amendment, so I wanted to dig into what it would mean for Florida residents.
What the proposed amendment would change
Current Florida homeowners can apply for a homestead exemption on their primary residence. This exemption allows homeowners to deduct up to $50,000 of their home’s assessed value, which reduces their annual property taxes.
The proposed Amendment 3, officially known as the Homestead Tax Exemptions, Property Assessments, and Spending Restrictions Amendment, does not eliminate all property taxes, but it does substantially reduce them. It would increase the current homeowner’s homestead tax exemption to $150,000 in 2027 and to $250,000 in 2028.
New Florida homeowners would qualify for a smaller exemption on their primary residence, which would increase after five years of residency.
Amendment 3 does not provide special tax relief for renters. Landlords could still see meaningful tax increases on an annual basis as their properties increase in value.
The ballot initiative’s language theoretically limits how tax dollars should be used by county and municipal governments, with the idea that such provisions ensure continued funding for essential services. Indeed, the ballot language provides a list of acceptable expenditures, such as public safety, infrastructure or obligations for employee retirement benefits.
However, the proposed amendment also says funds may be used for “expenditures approved” by local and county governments. This broad language on local spending authority may render the earlier stipulations toothless. The overall implication, therefore, is unclear.
If passed, Amendment 3 would lower the cap on annual property assessments on rental and commercial properties from a 10% increase to a 5% increase. Since property taxes are based on an asset’s assessed value, this effectively limits tax rate increases for businesses. The same caps would apply to second homes, which do not qualify for a homestead exemption.
A win for taxpayers?
The Florida Revenue Estimating Conference, which is the Florida Legislature’s research arm, estimates the bill would reduce revenue from property taxes by $11.8 billion per year.
The bill’s legislative proponents argue the measure is a win for taxpayers, citing reductions in the cost of homeownership while maintaining funding for schools and other essential services.
Detractors in the Legislature, meanwhile, cite projected budget shortfalls, concerns over the loss of critical services and the bill’s failure to address the primary drivers of increased living costs as their basis for opposition.
Michelle Eve Sandberg/AFP via Getty Images
Taxpayers may not end up paying much less
Current homeowners would see their property taxes fall. Others, however, would almost certainly pay more. Florida businesses, landlords and owners of other non-homestead properties would almost certainly see their taxes increase. Research shows that when governments cut property taxes for some groups, taxes shift to other groups.
If the state or local governments want to maintain the same revenue, Amendment 3 would necessitate tax increases in other areas, or more federal dollars to make up for the shortfall. This could include increases in state and local sales tax, expanding the list of goods subject to sales taxes, or increasing “documentary stamp taxes,” required on documents such as deeds, bonds and mortgages.
Local consequences
Florida property taxes are levied and collected by some 640 local government entities. There is no state income tax. This means that any reductions in property tax revenue directly affect local and county governments.
Local governments could replace declines in tax revenue in several ways. First, they may increase the tax or “millage” rate on less-protected property categories. These include non-homestead properties and large rental properties.
While Amendment 3 lowers the cap on property assessments for these other property categories, it does not mean taxes on these assets cannot or will not increase. And even small increases in the tax rate can be significant. A 1% increase in taxes on a $15 million commercial property, for example, equates to an increase of $150,000 on the owner’s tax bill. Though Florida’s Senate president, Republican Ben Albritton, stated that the bill would protect small businesses from tax increases, the ballot language does not support this claim. A small tax increase is still a tax increase.
Second, local governments may impose special assessments or implement higher fees for specific services, such as solid waste and stormwater utilities. They may also choose to levy additional taxes on permits and inspection fees, fuel taxes, or other service charges such as vehicle registration fees. State law even allows for possible increases in local sales taxes, though there are meaningful constraints.
Local governments may also increase taxes related to tourism, such as on food, beverages and hotels. It’s worth noting, however, that this is not a viable avenue for counties with limited tourism, and such revenues would fluctuate depending on tourism trends.
Finally, the state government could transfer additional funds to local governments from other state revenue sources. Such mechanisms already exist, though Amendment 3 does not make specific provisions for increased state-provided funding.
Drazen_/E+ via Getty Images
Schools and essential services
School-related property taxes are explicitly exempt from Amendment 3’s tax cuts.
And according to Albritton, the amendment would also ensure funding for critical services, such as infrastructure and public safety.
However, essential services would almost certainly be affected. For most Florida counties, these services make up the largest line item in their annual expenditures. Reducing property taxes has direct implications for essential service budgets.
Impacts on services would be uneven across the state. While some funding for police, fire and emergency medical services comes from state and federal sources, these services are primarily the responsibility of local governments. Local property taxes also fund services and facilities such as libraries and public parks.
Smaller, less-populated counties would be disproportionately vulnerable to service cuts compared with their larger counterparts. They lack a large tax base and are less able to generate revenue from other sources.
Providers of essential services have raised these concerns. In a rare position paper, the Florida Fire Chiefs’ Association has directly opposed Amendment 3, saying it would “create substantial uncertainty” around emergency services funding throughout the state.
Other considerations
This legislation hinges on several assumptions.
Amendment 3 assumes the caps on non-homestead properties will prevent overly burdensome tax increases on those properties. It also assumes that public safety and other key services can be protected through top-down rules on local spending. Implementing this legislation will also require the necessary personnel and infrastructure to effectively administer the law. If any of these assumptions is incorrect, the implications for businesses, local governments and Floridians are significant.
There are also some questions about the legality of classifying current and future Florida homeowners differently. This is particularly relevant when considering questions of residency and duration of residency.
In the past, Florida policymakers have drawn new residents and businesses to the state with the promise of no income taxes, a low cost of living and lower overall taxes compared to other states.
Amendment 3, while aligned with this “low tax” ideal, reveals real tensions when it comes to tax policy. The state can reduce property taxes, but those reductions would require trade-offs, such as raising other taxes or reducing government services to Floridians. The question is not whether these trade-offs exist, but whether they are acceptable in exchange for lower property taxes. Voters will decide Nov. 3.
Abigail Hall is Professor of Economics at the University of Tampa.
WASHINGTON says
Never seen a female democrat and wanting to mommy everyone into paying more taxes.
Mike Cocchiola says
Hey, you blithering fopdoodle, I’m missing your point. Are you insulting females, Democrats, or both? Are you a misogynist, a bigot, or both?
Laurel says
“WASHINGTON”clearly hates women. Fits right in with maga. A Heritage Foundation dream come true.
JimboXYZ says
Sounds like the author of the article is doing nothing more than echoing & confirming what I commented on as “you heard it from me first” comment, when the Property Tax Legislation articles showed up in recent months. I’m no economic expert, but even I could see it, how the machine works to raise taxes for millage rates & inflate property assessments for the next rounds of unaffordable. Where they start to off load government services & budgets to circumvent the legislation of the higher homestead exemption. They’re collecting that money, somehow, some way. We already got that with the Palm Coast Utility bills for water & sewage, also the garbage that Alfinville, FL growth. I recall the garbage contract fiasco. The lowest bid contract was circumvented to end up costing each household property more than the contractor they had, that came in for the lowest bid, Waste Pro vs FCC Environmental. More Alfin era improvement that wasn’t anything better than we were already getting the same/better for less.
All of this is nothing more than a Trojan Horse for more inflation of Bidenomics that was ushered in over the last 5-6 years of everything Covid & post Covid for politics & inflationary economics. We’re going to be paying for that 2020 election mistake for the rest of our miserable lives. More victims for losers than winners, because that’s the way the system is rigged.
richiesanto says
Typical trumper! You try to turn everything around in order to blame the democrats! Last I looked, Bimbo, we have a GOP governor who is spearheading this movement.
I am pretty sure that Biden couldn’t care less about this idjit state. I am also 100% sure that drumpf lost the 2020 election (note the 60 courts that ruled against drumpf). So, I think it might be time for all you trumpers to stop beating that dead horse.
When Biden was prez, COVID did a real number on the economy. Last I looked that the economy now is WAY, WAY WORSE. Maybe we can blame COVID again? YES!!!!! I think that the orange turd might have a festering case of COVID eating his brain!
Ed P says
To date, opposition pieces/groups fail to suggest that savings should, could and will be found that will ameliorate some of the “lost” revenue.
Remembering that politicians want to keep their jobs, simply replacing the missing revenue with creative fees or taxes will prove toxic and voters will respond.
It’s hard NOT to believe that belt tightening is necessary or that it’s not plausible.
The 60% voters threshold will not be much of a hurdle given the attitude of the American public and the overwhelming push for everything free while letting the wealthy pay more.
JC says
You don’t get it, the bigger issue is home rule continues to get worse and worse with local governments having less powers while the State Government continues to become more powerful, that’s the real issue with this Amendment. If you want to lose your local powers for cheaper taxes and have a powerful State Government (which BTW they have all the monies), be my guess.
60% is still a hurdle, because that is a supermajority of voters.
WouldntYouLikeToKnow says
I just want less cops around, so I’m voting in favor of it. Anything to get more fascists off the streets!
Standing in the Middle of Palm Coast Parkway says
The issue in Palm Coast and Flagler County continues to be that none of the elected officials understand how to grow the local tax base. They aim to cut or freeze taxes and fees but overlook that attracting more tax-paying businesses could allow them to reduce residential taxes and fees. Data centers are labeled as bad by social media opportunists who cite old issues with aging facilities in other states, and our elected officials bow to the perceived will of some loud mouths and swiftly issue a moratorium. What’s next? Charging SpaceX for launching from the Cape? Maybe we could put a $ 2,500 surcharge on speeding tickets for out-of-state residents? How about we invite Airbnb to open a series of absolute minimum security federal prison apartments for white-collar, non-sex offenders in underused condo complexes. We need to stop electing lawyers, real estate agents, small business owners, and occasionally grifters to these City and County positions.
john stove says
The City of Palm Coast should have been actively looking at diversifying its income stream years ago instead of so heavily relying on Property Tax.
Levels of service we get for our tax dollars has not gotten any better, year in year out. I would like to see the city do a deep analysis of cutting the fat out of budgets and personnel instead of the “were all going to die”….
Vote YES on the tax amendment
D. says
Only a fool would vote against this!!! VOTE YES!!!!
Laurel says
Good ole D., who repeatedly refuses to explain why “the educated” will vote yes, though I have asked several times and it is just ignored. Now, I’m certain, beyond any doubt, that D. will not define why, with facts that can be researched, “Only a fool would vote against this!!!” Instead, there is the predictable maga reliance on just short sighted blather. No facts, no explanations, just emotion and blather.
Is this how y’all vote? With no plans, no explanations, no proof, just short sighted blather? Is this how the “educated” maga works?
Some of you are so damned easy.
Thomas Hitson says
MS HALL; THIS Amendment #3 THE HOMESTEAD TAX EXEMPTION IS A VERY , VERY SIMPLE INSTRUMENT GIVEN TO FLORIDA HOMEOWNERS IF PASSED WITH OVER 60% OF THE VOTE! FLORIDA HOMEOWNERS YOU HAVE THIS CHANCE TO DRIVE HOME A POINT TO YOUR ELECTED OFFICIALS AFTER ELECTION AFTER ELECTION TRYING TO GET THEM TO REIN IN THEIR SPENDING, SPEND LIKE THE WELL WOULD NEVER GO DRY! Now they are in a panic mode spewing every dire results imaginable if this passes with over 60 %! They can now cut a lot of the fat off TOP HEAVY AGENCIES WITH WAY , WAY TOO MANY 6 FIGURE EMPLOYEES TO MANY ASSISTANT CHIEFS, BY REDUCING TOO MANY SPECIALIZED PERSONNEL! REDUCE PERSONNEL AS NEEDED TO MEET THEIR REDUCED BUDGET JUST LIKE US HOMEOWNERS HAVE TO DO EVERY TIME TAXES ARE RAISED !! WHY ?? BECAUSE THEY FEAR THE VOTERS !! BUT THAT FEAR ONLY LAST UNTIL THE NEXT ELECTION AND THEIR PROMISES OF NO NEW TAXES IS SOMEHOW FORGOTTEN !!
WELL THAT WELL IS NOT GOING COMPLETELY DRY, BUT YOUR VOTERS ARE GOING TO HELP YOU MANAGE YOUR MONEY BETTER!! VOTERS YOUR CHANCE !! VOTE YES YES YES , ON AMENDMENT #3 THE HOMESTEAD TAX EXEMPTION !!
Laurel says
Oh my goodness. My case made. No plan beyond November, all short sighted blather and emotion…all in caps yet!
Tax Accounting says
Thanks for putting together such a clear analysis. It’s refreshing to see complex ballot issues explained in a way that’s easy to follow.
Deborah Coffey says
All of which went over MAGA heads as Laurel explained above…twice.
Edith Campins says
Can’t help but notice how all the politicians running for office, locally, tell you in one breath that we need more money to repair our roads, provide services, etc., then tell you how they support this amendment. Haven’t heard any actual plans to replace the lost revenue, have you?