Proposed Florida property tax cuts would affect local governments

Proposals to substantially cut or even eliminate Florida's non-school property taxes would profoundly impact the finances of its cities and counties.

Since at least early 2025 Republican Gov. Ron DeSantis has spoken in support of eliminating non-school homestead property taxes. Republicans, who have massive majorities in the state legislature, have introduced property tax-cutting bills since the 2026 session started last week. Many take the form of constitutional amendments.

House Joint Resolution 201 would eliminate non-school homestead property taxes; HJR 205 would allow residents 65 year or older to not pay non-school property taxes; and HJR 211 would allow homeowners to transfer a benefit that suppresses their tax assessments when they move. There are several more bills along the same lines.

If approved, constitutional amendments would have to be approved in voter referendums in November and would go into effect on Jan. 1, 2027. Most would apply only to non-school taxes and would require public safety spending to continue at recent levels.

"Moody's, Standard and Poor's, and Fitch all consider property taxes to be a stable local government revenue base to draw creditworthiness estimates," said Florida League of Cities Legislative Advocate Charles Chapman. "Consumption-based taxes fluctuate too much with consumer sentiment. Since Florida does not have an income tax, that leaves property taxes as the stabilizing factor."

Eliminating or reducing property taxes would "destabilize the system," Chapman said. "This means bond ratings will be impacted due to the increased risk. Taxpayers will end up paying more for less."

The Florida Policy Institute said in January, "A legislatively referred ballot question to eliminate property taxes ? would severely undermine local governments' ability to fund essential services."

House Democratic Leader Fentrice Driskell said, "Ron DeSantis acts like this is easy, but what firehouses in Tampa does he think we should close? What police in Orlando? What garbage collectors in South Florida?"

The state's counties and cities with smaller populations are more heavily dependent on property tax revenues than those with larger populations. "Many of Florida's smaller, fiscally constrained counties would become entirely dependent on the state to fund their local operations," Driskell said. "That isn't how Florida counties are meant to operate."

Muni Credit Today Publisher Joseph Krist said, "I'm struck by the consistency of the provisions mandating minimum law enforcement spending levels while reducing the ability to raise revenue. I would not be surprised to see 205 and/or 211 get to the ballot. It clearly is an effort to speak to housing affordability. 201 on the other hand seems to be more generally targeted at the starve-the-beast voter who feels any tax is a bad tax."

Krist asked, "The state doesn't tax income and without property taxes it's going to be annoying fees and high sales taxes for the localities?"

Cumberland Advisors Chief Investment Officer and Vice Chairman John Mousseau said, "We don't think this moves forward right away... You would be cutting local government revenues across the board and different municipalities at much different rates depending on how they depend on local property taxes. State funding or governmental transfers aren't guaranteed so how would different counties and municipalities be able to plan? Raising various fees tends to be a regressive tax on lower income households so we doubt that would fly politically either."

In a February 2025 report the Florida Policy Institute found the elimination of property taxes would lead to a $43 billion revenue shortfall.

"The Florida Chamber of Commerce estimates that eliminating non-school property taxes for homesteads would require sales taxes to increase from 6% to 8.85%," the institute reported this month.

"The costs don't go away ? they show up somewhere else. And more often than not, it's full-time Florida residents who end up paying more through new or higher sales taxes," the Florida Association of Counties said.

"Unfortunately, it won't be ? homeowners or renters that benefit. It will be large special interests, snowbirds, and out-of-state property owners ? not the Floridians working to afford life here every day," the association said.

The revenues pulled in from Florida property taxes have increased 40% in the last three years, according to Florida Tax Watch. The 40% increase was nearly twice as fast as the combined growth of population and inflation in the period, Florida Tax Watch said. The total property tax collection is $59.2 billion in the current fiscal year. Property tax revenues have increased by 100% over the last 10 years.

That largely follows higher real estate prices. The All-Transactions House Price Index for Florida more than doubled in the 10 year period ending in the third quarter of 2025, according to Federal Housing Finance Agency data compiled by the Federal Reserve Bank of St. Louis.

"While Florida property values have surged in recent years, this has come at a cost to taxpayers squeezed by increasing local government property taxes," DeSantis said in his March 2025 State of the State speech. "Escalating assessments have created a gusher of revenue for local governments ? and many in Florida have seen their budgets increase far beyond the growth in population."

Taxpayers need relief, DeSantis said.

"You buy a home, pay off a mortgage ? and yet you still have to write a check to the government every year just to live on your own property? Is the property yours or are you just renting from the government?"

While many of the bills aim to reduce taxes for homestead property owners, Florida laws already protect the owner-occupied homes from significant property tax increases. Annual hikes in homestead property assessed values are limited by Florida's Save Our Homes amendment to the lesser of inflation or 3%. Assessment hikes for non-homestead properties are limited to no more than 10% a year.

Homestead property is also given two exemptions from tax levies. Their first $25,000 is exempted and the $25,000 sliver from $50,000 to $75,000 in assessed value is exempted. Only the first exemption is exempt from school district taxes.

"We are definitely committed to putting something on the ballot to give Floridians a chance to help themselves," Republican Senate President Ben Albritton told Tampa Bay channel 28 last week. Any property tax cut measure must protect local services, particularly in rural counties, where property taxes make up a large portion of the budget, he said.

HJR 201 is an $18.3 billion reduction in property tax revenue statewide, Chapman said. Municipalities make up about 24.1% of that impact, totaling approximately $4.4 billion. HJR 205 is estimated to have a $4.5 billion impact, with the municipalities representing about 22.8% of that number, totaling $1.03 billion, he said.

HJR 211 is estimated to have an $336.8 million impact. "This proposal is difficult to estimate, as it depends on the current homestead property owner moving to another property to establish a homestead," Chapman said.

"All of the proposals represent a structural shift to how local governments are funded. In some cases, this may indeed mean the loss of services," he said. "In other cases, this may mean millage rates are increased, shifting the tax burden onto the business community and renters. There is no plan to replace revenue for essential services lost due to the elimination or reduction of homestead property taxes. This means local governments must consider all of their options when it comes time to build their annual budgets."

Florida Tax Watch also objected to many of the proposals' shift of tax burden to non-homestead properties. It said they would increase the existing tax shift of $10 billion a year from the homestead properties to the non-homestead properties.

"The system favors long-term homestead property at the expense of non-homestead property (e.g. renters, businesses, second homes), homesteaders that renovate or build an addition to their home[s], people moving to Florida, and first-time homeowners."

Ohio recently passed laws to curb property taxes.