The approval of Florida Amendment 3 on November 3, 2026, will bring significant changes to property taxes, primarily benefiting homeowners who use their property as their primary residence and modifying the assessment cap for investment and commercial properties.
Here are the key changes that homeowners, buyers, and real estate investors should know.
1. Increased Homestead Exemption
The Homestead Exemption for primary residences will gradually increase:
2027: Up to $150,000 for non-school property taxes.
2028: Up to $250,000.
Starting in 2029: The amount will be adjusted annually based on inflation.
This means a larger portion of a home's assessed value may be exempt from certain property taxes, provided the owner meets the Homestead eligibility requirements.
Important: This increased exemption does not apply to school taxes.
2. Lower Assessment Cap for Investment Properties
The annual assessment cap for properties without Homestead will decrease from 10% to 5% for non-school property taxes.
This generally includes:
Rental properties.
Second homes.
Commercial properties.
For example, on a property assessed at $300,000, the illustrative maximum annual assessment increase would go from $30,000 to $15,000.
This does not mean total property taxes will decrease by 5%, since the final tax bill also depends on tax rates and other factors.
3. What About New Florida Residents?
Those who are Florida residents as of December 31, 2026, may qualify for the expanded exemption once they meet the Homestead requirements.
Those who establish Florida residency on or after January 1, 2027, will generally have to wait until their fifth year of Homestead eligibility to receive the expanded benefit, subject to the applicable requirements.
How Could This Impact the Florida Real Estate Market?
Homebuyers: Greater potential tax savings for those purchasing a primary residence.
Investors: A lower cap on annual assessed-value increases.
Landlords: Potentially slower growth in certain property tax costs.
Second-home buyers: May benefit from the 5% assessment cap, but not from the expanded Homestead Exemption.
When Do the Changes Take Effect?
2027: The exemption increases to up to $150,000.
2028: It increases to up to $250,000.
2029 and beyond: The exemption is adjusted based on inflation.
My Perspective as a Realtor
These changes make it even more important to understand property taxes before purchasing real estate in Florida. Buying a primary residence is not the same as purchasing a rental property or a second home.
When evaluating a property, it's essential to look beyond the purchase price and HOA fees and consider property taxes and the potential tax benefits that may apply.
Thinking about buying a property or investing in South Florida? Contact me, and I'll help you explore your options.
Jose Miguel Zambotti
REALTOR® | Partnership Realty Inc.
📱 786-334-8638
🌐 https://www.sunshinestatesliving.com