Florida lawmakers have advanced a proposal that could eliminate a significant portion of property taxes for primary homeowners as soon as 2027. The measure, known as HJR 203, would need to secure 60% voter approval in the 2026 midterm election to take effect.
If passed, the plan would remove city and county property taxes for homesteaded properties, potentially cutting annual tax bills by half or more. Homeowners would still be responsible for school taxes, which make up a considerable part of the total bill.
Key Takeaways
- Florida's House advanced bill HJR 203 to eliminate most property taxes for primary residences.
- The plan requires 60% voter approval on the 2026 ballot to begin on January 1, 2027.
- Homeowners could see their tax bills cut by 50% or more, though school taxes would remain.
- Economists warn of a potential $14.8 billion annual revenue shortfall for local governments.
- The bill includes a provision to guarantee funding levels for public safety services like police.
Details of the Proposed Tax Overhaul
The proposal, which has the backing of Governor Ron DeSantis, represents a significant acceleration of the state's long-term goal to reduce the tax burden on residents. An earlier version of the bill included a 10-year phased implementation, but a recent amendment fast-tracks the full relief to begin in 2027.
Under HJR 203, the portion of a property tax bill designated for city and county services would be eliminated entirely for those with a homestead exemption. However, the plan does not affect taxes levied by school districts, which typically account for 35% to 50% of a homeowner's total property tax payment.
This distinction means that while the change is substantial, property tax bills will not drop to zero. Instead, a homeowner could expect a reduction of more than half, providing significant financial relief, especially for those on fixed incomes.
What is a Homestead Exemption?
In Florida, a homestead exemption provides a reduction in the assessed value of a property for tax purposes. It is available to permanent Florida residents for their primary home, offering significant tax savings and protection against certain creditors. HJR 203 specifically targets these properties.
Economic Impact and Local Government Concerns
The proposed tax cut has raised serious questions about funding for essential local services. State economists have projected that the plan could create an annual revenue shortfall of $14.8 billion for cities and counties across Florida.
Critics worry that such a drastic reduction in revenue could lead to cuts in staffing for fire departments, sanitation, and other municipal services. To address this, the bill's authors included a public safety guarantee. This provision would legally require cities to maintain funding for police departments at the levels set in the 2024-2025 fiscal year, regardless of the lost tax revenue.
"Infrastructure, public safety and services don’t disappear just because a revenue line does," said Peggy Olin, CEO of OneWorld Properties. "The intention is strong to protect homeowners, but the execution has to be disciplined."
Olin also suggested that the lost revenue might not simply vanish. "In reality, if funding disappears in one area, it often reappears somewhere else, whether through fees, assessments, utilities or broader consumption taxes," she noted. This raises the question of whether homeowners will experience true net savings or just a shift in how they pay for local services.
Potential Effects on Florida's Housing Market
A major question surrounding the proposal is its potential effect on home prices in an already competitive market. With buyers potentially able to afford larger mortgages due to lower annual tax costs, some experts fear the relief could be absorbed by price inflation, further challenging first-time buyers.
However, real estate professionals point to other factors as more significant drivers of Florida's property values.
Who Benefits Most?
- High-Value Homeowners: They would see the largest savings in absolute dollar terms, as property taxes are based on a home's value.
- Retirees and Fixed-Income Families: These groups may feel the greatest impact, as the relief would provide more predictability and breathing room in their budgets.
"Real estate markets are efficient. If buyers suddenly have more purchasing power, prices can adjust, especially in supply-constrained areas like South Florida," Olin explained. She added that Florida's property values are driven more by migration trends, global investment, and limited inventory than by a single tax adjustment.
The primary concern remains affordability at the entry level of the market. "If relief simply gets absorbed into higher prices, first-time buyers could feel pressure," Olin stated. This suggests that the tax cut must be considered alongside broader policies related to housing supply and smart development to ensure long-term affordability for the next generation of Floridians.
Next Steps for the Proposal
With the bill advancing through the state House, its ultimate fate now rests with Florida's voters. The proposal will be presented as a constitutional amendment on the 2026 midterm election ballot. For it to become law, it must receive approval from at least 60% of those who cast a vote on the measure.
The debate between now and then will likely focus on the balance between providing direct financial relief to homeowners and ensuring the long-term fiscal stability of the state's cities and counties. Proponents argue it reinforces Florida's identity as a low-tax haven, while opponents urge caution about the unintended consequences for public services and the housing market.
