Florida is facing a potentially historic battle over how homes and local governments are funded.
Gov. Ron DeSantis and key lawmakers are pushing sweeping changes to property taxes on owner-occupied homes, aiming to deliver major tax relief by 2026 or 2027.
But some say these proposals could create a multi-billion-dollar shortfall in city and county budgets, reshape the state’s tax system, and worsen the housing affordability crisis.
What’s driving the push?
Local property tax collections have surged from about $32 billion in 2019 to roughly $56 billion today.
This growth is fueled by soaring property values and rapid population increases.
DeSantis argues that homeowners are being “taxed out” of their homes and wants to make Florida more affordable by slashing or even eliminating non-school property taxes on primary residences. The proposals are set for debate in the 2026 legislative session, with supporters aiming to put constitutional amendments on the November 2026 ballot.
The fiscal shock: how big is the gap?
State economists warn that eliminating non-school homestead property taxes could cost local governments $14.7 billion to $18.3 billion annually starting around fiscal year 2027–2028. Homeowners could save roughly $2,500 per year in Pinellas County and $3,500 in Miami-Dade County, though savings vary by home value and local rates. However, analysts estimate that cutting these taxes could push home prices 7% to 9% higher, benefiting current owners but making it harder for first-time buyers.
What’s at risk for local governments?
Local governments rely heavily on property taxes to fund essential services such as police, fire and EMS, road maintenance, parks, libraries, and code enforcement. For example, Cape Coral officials estimate the proposals could erase about 40% of the city’s property tax revenue, forcing cuts to parks, roads, and code enforcement. While some bills include protections for law enforcement funding, fire, EMS, and other services lack clear safeguards.
Revenue losses could also lead to bond rating downgrades, increasing borrowing costs for infrastructure projects like roads, water systems, and schools. Critics warn that the proposals would increase state control over local budgets, reducing local autonomy and turning cities and counties into administrative arms of the state.
Who wins, who loses?
Likely winners:
- Existing homeowners with higher-value homesteads, who would see large tax savings and rising home equity.
- New residents with means attracted by Florida’s low-tax reputation.
Likely losers:
- Renters, who receive no direct relief and may face higher costs if landlords or local governments raise other taxes or fees.
- Lower- and middle-income families, disproportionately affected by shifts toward regressive sales taxes and fees.
- First-time and younger buyers, who risk being priced out by higher home prices.
- Small businesses, which may face greater tax burdens.
How might Florida replace the lost revenue?
Lawmakers are considering several options:
Sales tax increases: To replace school property tax revenues alone, the state sales tax might need to rise by 2.1 to 3 percentage points. Replacing all homestead property taxes could require doubling the sales tax from 6% to about 12%.
Real estate transfer taxes: A 5% surcharge on documentary stamp taxes is under discussion but could be volatile.
Targeted taxes: Proposals include a “mansion tax” on sales above $1 million, revival of intangible property taxes on financial assets, luxury services taxes, and one-time fees on new residents.
Budget discipline and state oversight: Initiatives like the Department of Government Efficiency and Florida Agency for Fiscal Oversight aim to find savings and control local tax increases but may centralize fiscal power in Tallahassee.
Local revenue diversification: Expanding tourist development taxes and local option sales surtaxes could give local governments more tools to raise revenue.
The political and policy crossroads
For these proposals to become law, they must clear the Legislature with a three-fifths vote and then win 60% voter approval in the November 2026 general election. Florida voters will decide how much they value immediate tax relief versus stable funding for local services and fairness among homeowners, renters, current residents, and newcomers.
Why this matters
Florida’s property tax debate is more than a tax cut fight. It’s a fundamental discussion about who pays for government, how much, and who benefits. Eliminating or deeply cutting homestead property taxes could lock in savings for current homeowners but may widen wealth gaps, undercut essential services, and push the state toward a more regressive tax system with greater state control over local budgets.
The bottom line
The coming year will reveal how much risk Floridians are willing to accept for lower property taxes, whether they support replacing lost revenue with higher consumption or targeted taxes, and how they want to balance local autonomy with state oversight. These decisions will shape Florida’s housing, taxation, and local democracy for decades.
The Conversation on Politics & Power
These themes are at the heart of the latest episode of Politics & Power, where host Bruce Hamilton speaks with News4JAX political analyst Rick Mullaney:
- HOMEOWNERS MAY GET TAX BREAKS, BUT LOCAL SERVICES COULD LOSE FUNDING.
- NOVEMBER VOTERS DECIDE FLORIDA’S PROPERTY TAX FUTURE.
- HIGHER HOME PRICES AND TAX SHIFTS ARE COMING — HERE’S WHAT TO EXPECT.