The Proposal Shaking Up Real Estate, Public Services, and the Sunshine State Economy
Could eliminating property taxes be a game changer for Florida homeowners—or a risky move that destabilizes housing affordability, public services, and investment? Here’s what you need to know, and what it could mean for you.
What’s Happening: A Bold Proposal from Gov. Ron DeSantis
Florida is no stranger to bold policy shifts, but the latest proposal making waves could mark one of the most dramatic changes in the state’s history.
Governor Ron DeSantis has proposed eliminating property taxes on primary residences, specifically those covered under Florida’s Homestead Exemption. On the surface, this might sound like a massive win for homeowners—but it comes with serious implications for local governments, real estate investors, and renters.
Since property taxes are written into the Florida Constitution, removing them would require a constitutional amendment. That means at least 60% of voters statewide would need to approve the change in a referendum.
What Happens to the Lost Revenue?
Property taxes are a major funding source for local governments. Eliminating them creates a serious budget gap. So how would the state replace that revenue?
One suggestion is raising the state sales tax. But there’s a catch: sales taxes tend to impact low- to middle-income residents the hardest, and the revenue is much more volatile—especially during economic downturns.
Without a clearly defined replacement plan, critics warn that we could see deep cuts to essential public services like:
- Emergency response
- Public schools
- Infrastructure and road maintenance
- Libraries and community programs
The lack of a sustainable alternative funding model is raising concerns about the long-term health of local governance and services.
Miami-Dade Could Take a Major Hit
Let’s look at the numbers in Miami-Dade County, where the FY 2024–2025 proposed budget tells a revealing story:
- Total Budget: $12.698 billion
- Operating Budget: $8.010 billion
- Property Taxes Contribution: $2.99 billion (about 37% of the operating budget)
That means over a third of the county’s operating budget would vanish if property taxes were removed—leaving significant gaps in funding for public safety, public transit, and community infrastructure.
What About Second Homes and Investors?
The proposal only affects primary residences. Owners of second homes, vacation properties, and rental units would still be required to pay property taxes. And if counties lose revenue from homesteaded properties, they may increase rates on non-homesteaded ones to balance the books.
This could have several consequences:
- Higher holding costs for small-scale, “mom-and-pop” investors
- Reduced incentive to invest in rental properties
- An increase in for-sale inventory, particularly in the multifamily space
- Downward pressure on prices in some segments
In other words, small landlords and investors could get squeezed while trying to operate in an increasingly expensive and uncertain environment.
Workforce Housing Incentives Could Be at Risk
Florida’s Live Local Act currently offers generous tax abatements for developers building affordable and workforce housing. These include:
- 100% exemption for units serving residents earning up to 80% of the Area Median Income (AMI)
- 75% exemption for units serving residents between 80% and 120% AMI
But if local governments lose a major revenue source like property taxes, their ability—or willingness—to offer these abatements could shrink dramatically. While larger institutional developers may still secure incentives through lobbying or scale, smaller, mission-driven developers could find themselves locked out.
That could lead to fewer affordable housing units being built, even as demand continues to grow.
Budget Shortfalls Could Ripple Across the Economy
If local governments are left scrambling to fund their operations, they may be forced to take drastic steps. These could include:
- Cutting or privatizing public services
- Raising taxes on businesses and non-homesteaded properties
- Passing higher operating costs along to renters
If landlords see their tax bills rise, rent increases could follow—making Florida’s affordability crisis even worse. And if the quality of public services drops, the state’s overall appeal for new residents, tourists, and investors could start to fade.
My Take: A Double-Edged Sword for Real Estate
There’s no denying that eliminating property taxes could unlock major benefits for primary homeowners. It could free up thousands of dollars annually, giving people more purchasing power and potentially fueling demand in the housing market.
That could lead to:
- Higher home values
- Increased consumer spending
- More robust local economies
But there’s a downside. If sales taxes rise or public services decline—or if non-homesteaded tax burdens become unsustainable—those gains could be wiped out.
Florida’s real estate market is powered by more than just pricing. It’s driven by lifestyle, infrastructure, perception, and investment opportunity. Undermining any of those pillars could impact long-term growth and desirability.
What’s Next?
Florida’s proposal to eliminate property taxes could redefine real estate and reshape the state economy—for better or worse. Whether you’re a homeowner, investor, or simply tracking the trends, this is a major shift to keep on your radar.
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