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Key Takeaways
- Florida’s governor is supporting a proposal to eliminate property taxes for homeowners.
- Eliminating property taxes could push housing prices up as much as 9%, a Realtor.com report found.
- Florida homeowners have seen their property values soar by 42% since 2019, but they have fallen by 3% over the past three years.
Residents of one state could see a big jump in their home value if voters make a key change to property tax collections.
Florida Gov. Ron DeSantis has proposed eliminating or reducing property taxes for Florida homeowners who live on the property as their primary residence. The cut would immediately benefit homeowners, whose property tax obligations are priced into the home’s existing value, experts said.
Home prices in Florida could rise up to 9% if a proposal to eliminate state property taxes for some homeowners is approved, according to an analysis by Realtor.com. The James Madison Institute, a Florida-based think tank, calculated that the median homeowner pays around $5,400 a year in property taxes.
Homeowners in Florida have seen their home values begin to tick lower in recent years after soaring during the pandemic-era housing boom. But it’s a controversial proposal that could shift how the state’s tax burden is shared and must first be approved by voters.
Why This Matters to You
Property taxes have an impact on housing costs, which have been rising and making housing more expensive for many people. Housing affordability is important because shifts in home prices, rents, and mortgage rates influence consumer spending, savings behavior, and broader economic stability.
“It would be a boon to existing property owners,” said Realtor.com senior economist Joel Berner. “But this measure would disproportionately benefit wealthy Floridians at the expense of those who don’t own homes, and would make it even harder to break into homeownership because of the increased prices.”
Florida Home Values Soar, Adding to Tax Burden
The call to reduce property taxes comes as Floridians have seen their tax bills rise with the soaring value of their properties.
Realtor.com calculated that home values in Florida have increased by 42% since October 2019, before the surge in housing prices during the COVID-19 pandemic. However, the fervor over Florida housing has since subsided, as housing prices in October were 3% lower than at the same time in 2022.
It could also add to the burden for renters, since rental properties aren’t included in the property tax proposals. Owners of vacation homes are also excluded from the proposal.
“This would be a highly regressive tax, placing more of the state’s tax burden on renters, whose units are still being taxed, and those taxes are passed along to tenants,” Berner said.
While DeSantis has proposed eliminating all property taxes on owner-occupied homes in Florida, some legislators have put forward more limited proposals that would still collect property taxes to pay for local schools. A proposal that still includes property tax collection for schools would lessen the increase in property values to between 4.5% and 5%, Berner said.
The Florida Legislature must approve any property tax change proposal as a constitutional amendment, which would then be put on the Florida ballot in November 2026, where it would need to get 60% of the votes to become law.
