Amendment 3 approved: What it means for major property tax relief, municipal funding concerns

TAMPA, Fla. - Florida homeowners could soon see significant property tax savings after voters approved Amendment 3, one of Gov. Ron DeSantis' biggest policy priorities.

Florida property tax cuts

Big picture view:

The amendment increases Florida's homestead exemption to $150,000 next year and $250,000 in 2028. Depending on a home's assessed value and local tax rates, estimates put the potential savings between $1,400 and $2,500 annually.

However, the changes could leave cities and counties scrambling to make up for hundreds of millions of dollars in lost revenue.

Speaking Wednesday, DeSantis said he wants to make sure local governments don't respond by simply increasing other taxes and fees.

"We want people to be able to get that but also limiting local governments from just doing an end run around the amendment and taxing them in other ways," DeSantis said.

The governor said a taxpayer bill of rights could help protect homeowners.

Local budget revenue impact

Local perspective:

Local leaders are already considering what the changes could mean for their budgets.

Hillsborough County Commissioner Harry Cohen said the lost revenue could affect everything from road improvements and infrastructure to parks, libraries, senior centers and cultural programs.

Tampa City Council Chair Alan Clendenin said he isn't currently considering raising taxes to offset the losses. Instead, he believes economic development will be key to generating additional revenue.

Polk County Sheriff Grady Judd also weighed in, saying voters sent a clear message to local governments that they need to find ways to deliver services more efficiently and save taxpayer money.

Law enforcement agencies had previously raised concerns that reduced property tax revenue could limit their ability to hire additional personnel and expand emergency services.

Florida homestead exemption requirements

Dig deeper:

Amendment 3 does not eliminate all property taxes. Homeowners will still be responsible for the portion of their property tax bills that funds school districts.

The measure also includes a residency requirement that could influence Florida's housing market.

Only people who establish permanent Florida residency by the end of 2026 will qualify for the immediate tax benefits. Those purchasing homes after that deadline will have to wait five years for the additional savings to take effect.

Housing market buyer rush

What's next:

Real estate professionals anticipate a potential rush of buyers trying to purchase homes before the end of the year.

Mia Annibale, market president for Berkshire Hathaway Florida Properties Group, said the deadline could create a sprint among prospective buyers hoping to qualify for the tax savings sooner.

"We do think there might be a bit of a sprint to the finish line before the end of this year because they have to own by then. If they don't purchase before then, then they have to wait the five years for those tax exemptions to hit," Annibale said. "So we anticipate sort of a spring to the finished line towards the end this year to get those savings immediately."

Hillsborough County Property Appraiser Bob Henriquez cautioned that individual savings will vary based on factors including a home's assessed value, how long someone has owned the property and whether they already have a homestead exemption.

"It's the assessed value of your home currently, how long you've been in your home, how long have you been homesteaded, are you a new buyer or are you somebody that's been in your home for a long time? It's really impossible to say exactly. It's not a set number. But suffice to say it's a significant savings in terms of overall property tax," Henriquez said.

Local governments will now have to begin evaluating how to adjust their budgets and maintain services as the property tax changes move toward implementation.

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