Layla Zulfa
Florida homeowners, despite not casting a vote for increased tax burdens, are finding themselves facing significantly higher property tax bills. This surge is a direct consequence of an unprecedented wave of in-migration that has dramatically reshaped the state’s housing market. In response, Governor Ron DeSantis convened a special legislative session, successfully pushing through a proposal to place a constitutional amendment before voters in November. This amendment aims to more than quadruple Florida’s homestead property tax exemption, a move that lawmakers have supported with modifications designed to safeguard school funding.
Governor DeSantis is presenting this ballot initiative as a solution to the property tax challenge exacerbated by the influx of individuals and businesses relocating from high-cost urban centers, particularly in the Northeast, during the COVID-19 pandemic. This significant demographic shift overwhelmed the existing housing supply, leading to a sharp appreciation in home values for long-time residents. While state and local tax rates have remained relatively stable, the sustained period of escalating property values has, in turn, driven up property tax assessments.
This intervention is not the first time Governor DeSantis has utilized state authority to influence local housing policy. Earlier, when the migration wave exposed a critical housing shortage, he signed legislation that effectively stripped local governments of zoning control. The stated intent of this legislation was to facilitate the development of more housing options, particularly targeting workforce housing. While this addressed the supply-side of the equation, it did little to alleviate the immediate property tax concerns for existing homeowners whose assessments were already inflated by the state’s robust pandemic-era domestic in-migration. Adding new housing stock does not inherently translate into property tax relief for those grappling with higher assessment values.
Florida’s experience is not an isolated phenomenon. Across the Sun Belt region, including states like Texas, Georgia, North Carolina, Tennessee, and Arizona, similar migration patterns have transformed housing markets and driven up tax bills, even in jurisdictions where local governments have reduced tax rates. However, Florida stands out as the first state to directly engage its electorate with a constitutional amendment as a proposed remedy to this complex issue.
New York’s Dual Impact: A Tax Squeeze from Both Coasts
The proposed constitutional amendment in Florida, if approved by voters, could create a dual taxation pressure for New Yorkers who have relocated to the Sunshine State. Simultaneously, New York City is implementing its own measures, with Mayor Eric Adams and Governor Kathy Hochul championing a "pied-à-terre" tax on luxury second homes, a proposal that passed the state legislature as part of the new budget just before Memorial Day weekend.
Individuals who have not officially established Florida as their primary domicile will not qualify for the expanded homestead exemption. This could leave local governments in Florida facing potential revenue shortfalls, potentially compelling them to increase tax rates on non-homestead properties – a category that includes vacation homes and investment properties owned by part-time residents.
Conversely, New Yorkers who have made Florida their permanent residence but retain a home in the Big Apple might find themselves benefiting from Florida’s property tax relief while still facing tax obligations in New York. The allure of Florida has long attracted New Yorkers seeking to escape the high cost of living in the Northeast. As Gary Bingel, a state and local tax expert with Eisner Advisory Group, noted in an interview with The Builder’s Daily, "The Northeast is expensive to live in because that’s where all the people are." He further observed that relocating to Florida now, in a sense, "is creating the same problems people are moving away from."
Florida’s Property Tax Escalation: A Statistical Overview
Between 2020 and 2022, Florida witnessed a staggering surge in home prices, exceeding 50%. This dramatic increase was largely fueled by a substantial influx of buyers from New York, which served as the primary source of new Florida residents, followed by Georgia and Texas. Since that peak, however, the housing market has experienced a slowdown. Florida’s average home value has declined by 3.7% over the past year, a trend attributed to an increase in new construction that has outpaced market absorption. Consequently, Florida’s in-migration has moderated as housing costs have climbed.
Eric Finnigan, vice president of demographics research at John Burns Research & Consulting, highlighted this shift in an interview with The Wall Street Journal, stating, "The affordability picture has changed in Florida almost more than anywhere else in the country." Despite the recent market deceleration, assessed home values have not reverted to pre-migration surge levels. Florida’s "Save Our Homes" recapture rule dictates that assessed values can continue to increase by up to 3% annually, even when market prices decline, until the assessed value converges with the market value. This is according to an explanation provided by St. Johns County Property Appraiser Eddie Creamer on the county’s website.
The impact on homeowners is evident even where local governments have strived to control tax rates. Most Florida counties have maintained millage rates or even reduced them. For instance, Marion County commissioners voted in September 2025 to lower the countywide rate. Despite this, homeowners in Marion County still experienced an increase in their tax bills. Across the state, tax bills in cities have seen an average increase of approximately 50% over the past several years.
During a press conference announcing the proposed amendment, Governor DeSantis underscored the significant economic growth Florida has experienced under his leadership, noting that the state’s economy has expanded from $1.1 trillion to $1.85 trillion during his seven-year tenure. "That’s a really significant increase in a seven-year period," he stated. "We’ve done close to $10 billion in tax relief since I became governor." He further explained that the rise in home values has made property taxes a substantial burden for millions of Floridians. "Fortunately, because we’ve had success, we have the ability to do something about it," he added.
Florida’s Constitutional Amendment: A Path to Voter Decision
Governor DeSantis’s initial proposal for a broader exemption than what the legislature ultimately passed has now been framed as a constitutional amendment. This amendment seeks to replace the current $50,000 homestead exemption with a phased increase, escalating to $150,000 in 2027 and reaching $250,000 in 2028. This enhanced relief is contingent upon homeowners establishing Florida residency on or before December 31, 2026, and is exclusively for primary residences. Second homes and investment properties will not qualify.
A critical concession secured by lawmakers during the special session was the complete exclusion of the school board levy from the proposed exemption. This ensures that funding for public education remains protected. For new residents arriving after December 31, 2026, the existing $50,000 exemption will apply for four years before they become eligible for the full exemption.
The amendment also includes a provision to reduce the annual assessment cap on non-homestead commercial properties from 10% to 5%, effective January 1, 2027. For the amendment to be enacted, it requires the approval of 60% of the voters. It is important to note that renters, who constitute approximately one-third of Florida’s housing units, will not receive any direct relief from this proposed amendment.
New York’s "Pied-à-Terre" Tax: Tightening the Financial Screws
In parallel with Florida’s legislative actions, New York has moved forward with its budget, which includes the implementation of the "pied-à-terre" tax on non-primary residences within New York City. Governor Hochul articulated the rationale behind this measure in a statement: "New York City is the greatest city in the world, and the people who call it home should not be left carrying the burden alone."
The New York legislation is structured in two phases. Phase 1, effective from July 1, 2026, through June 30, 2028, targets one- to three-family homes valued at $5 million or more, as well as condominiums and co-op units valued at $1 million or more. Phase 2, commencing July 1, 2028, and extending through June 30, 2031, will see the threshold for condominiums and co-ops rise to $5 million, aligning with single-family homes. This phase will also incorporate a new comparable sales-based valuation method to be developed by the city.
During Phase 1, tax rates on condominiums will range from 4% for units valued between $1 million and $3 million, up to 6.5% for units exceeding $5 million. For single-family homes, the tax rates will vary from 0.8% to 1.3%, dependent on the property’s value. The New York City Department of Finance is mandated to notify affected owners by August 30. This new tax is projected to generate between $340 million and $500 million annually for the city.
Navigating the Future: Fiscal Implications and Economic Headwinds
With New York City’s "pied-à-terre" tax program already established, the focus shifts to Florida’s upcoming ballot measure, which requires voter endorsement. This transition has already ignited debate, with municipalities and counties voicing concerns about how they will address budget shortfalls for essential services and infrastructure when a significant revenue stream is poised to shrink.
"Money has to still come from somewhere," Gary Bingel commented, suggesting that potential alternatives could include increased tourism taxes or sales taxes. He cautioned that the situation is "not as straightforward as everybody says. There’s always some sort of trade-off."
Dr. Ken Johnson, a real estate professor at the University of Mississippi, identified a national recession as the most significant risk factor for the Florida amendment. He warned that a recession could "drain state and county coffers to the point that essential services could not be delivered." While property owners stand to gain substantial financial benefits if the amendment passes, Dr. Johnson emphasized that this is a considerable uncertainty. He concluded that recessions are cyclical, and the question is not whether but rather "when" a recession will occur. The success and long-term impact of Florida’s proposed property tax relief will undoubtedly be influenced by these broader economic forces.
