Florida owes its economic appeal to traditionally low tax rates, above all the constitutional ban on state income tax. In the past, these framework conditions attracted not only holidaymakers and pensioners, but increasingly also billionaires. Now another major source of public revenue is up for debate: with the referendum on so-called Amendment 3, Governor Ron DeSantis is seeking tangible relief on property taxes to counteract the sharp rise in the cost of living for private homeowners since the pandemic.
Following the influx from north-eastern states, local government budgets climbed by nearly 75 percent between 2019 and 2025 to 59.2 billion dollars. The legislative initiative now provides for capping the annual assessment increase for commercial properties and second homes from the current 10 percent to 5 percent starting next year. Far more profound, however, is the intervention in the exemption for primary residences: this so-called homestead exemption is set to be raised to 150,000 dollars in 2027 and 250,000 dollars in 2028, with subsequent indexation to the inflation rate.
Multi-billion-dollar budget shortfalls for cities and counties
Calculations by the Florida Legislature point to massive revenue losses for municipalities and counties. According to estimates, local government budgets will face shortfalls of 4.6 billion dollars in 2027, 8.4 billion dollars the following year, and almost 12 billion dollars in 2032. How municipalities are supposed to absorb this deficit is left open by the proposal. Tax expert Ken Rios from the Fort Lauderdale-based firm Kaufman Rossin therefore advises caution, as the measure appears more advantageous at first glance than it is in practice. Neil Schiller, managing partner of the Government Law Group, points out that administrations could significantly raise local tax rates or permit fees to offset the shortfall.
Shift of costs to commercial enterprises and tenants
If the tax base for owner-occupied residential properties shrinks, fiscal pressure on commercial real estate threatens to mount. According to a study by Jared Walczak, senior fellow at the Tax Foundation and president of Walczak Policy Consulting, tax assessments for multi-family residential buildings could rise by nearly 15 percent. This would correspond to an additional burden of around 406 dollars per residential unit, which property owners are likely to pass on to their tenants through higher rents. At the same time, job cuts in building authorities could noticeably slow down necessary planning and permit procedures for developers.
In addition, concern is growing over cuts to public infrastructure and safety. While Sheriff Rosie Cordero-Stutz of Miami-Dade supports the legislative initiative, Bob Gualtieri, Sheriff of Pinellas County, warns of dangers to public order. Nicole Fox, policy analyst at the Tax Foundation think tank, underlines that the choice of location for wealthy newcomers depends significantly on well-maintained roads and functioning law enforcement agencies. Whether the proposal will be implemented remains uncertain: according to a survey by the University of North Florida, 50 percent of voters recently supported the reform, but an approval majority of at least 60 percent is required on election day.
