Florida property tax cut amendment could cost local governments nearly $12 billion a year by 2031, economists say

Florida cities, counties and special taxing districts could lose nearly $12 billion annually within five years if voters approve a sweeping property tax cut amendment on the November ballot, according to new projections released by state economists.

The estimates, approved by the Legislative Office of Economic and Demographic Research and released on June 12, show local governments would see a $5 billion reduction in property tax revenue during the 2027-28 fiscal year, the first year the amendment would take effect.

The projected losses would grow to nearly $8.8 billion in the second year, $9.7 billion in the third year, $10.75 billion in the fourth year and almost $12 billion by the fifth year.

The constitutional amendment, which requires at least 60% voter approval to pass, is a key part of Gov. Ron DeSantis effort to provide property tax relief as home values and tax bills have climbed sharply across Florida in recent years. 

The proposal would increase the homestead exemption from the current $50,000 to $150,000 in 2027 and then to $250,000 in 2028. Lawmakers modified the measure before placing it on the ballot by excluding school taxes from the higher homestead exemption.

Who qualifies for Florida's proposed property tax cut amendment?

"The proposal will increase constitutional protection against taxes for homestead properties and will be the biggest property tax cut in Florida history," DeSantis wrote on X earlier this month. "Floridians looking for help with affordability will have a great opportunity to vote for it."

While homeowners who qualify for a homestead exemption would receive the most immediate benefit, the amendment also includes provisions aimed at reducing taxes for non-homestead property owners, including businesses and owners of vacation homes and condominiums. The measure would lower the annual cap on assessment increases for non-homestead properties from 10% to 5%.

The amendment also includes a residency requirement. 

To qualify for the increased homestead exemption, a homeowner must be a Florida resident by Dec. 31, 2026. Anyone who moves to Florida after that date and purchases a homestead property would have to wait five years before becoming eligible for the higher exemption.

Why are local governments and critics opposed to the property tax cut plan?

Local government leaders have raised concerns that the dramatic reduction in property tax revenue could hinder their ability to fund essential public services. Small and rural communities with a large percentage of homestead properties in their tax base are expected to be among the hardest hit if the amendment passes.

Lawmakers attempted to address those concerns by requiring property tax revenues to be spent only on "core services," including public safety, education, environmental programs and infrastructure projects. However, local officials argue that the restriction does not solve the underlying problem of having significantly less revenue available to pay for those services.

The proposal also faces a legal challenge. 

An activist group and two former local elected officials have filed a lawsuit against the state, arguing that the ballot language is misleading. Even if a court agrees, the amendment would not automatically be removed from the ballot. Under Florida law, Attorney General James Uthmeier would be required to revise the ballot summary if a judge determines it is defective.