TALLAHASSEE — Florida’s economic structure is about to dramatically change.
Florida voters approved Amendment 3, a proposal put on the ballot by Florida’s Legislature that will offer homeowners a large break on their property taxes.
About 62% of voters approved the amendment after being buffeted by campaigning from both sides.
Those for it, like Gov. Ron DeSantis and the trade group Florida Realtors, said it would help homeowners with their cost of living. Opponents, like some Florida sheriffs, environmental organizations and business groups, warned that it would shift taxes onto Florida residents and force the government to cut emergency services.
The amendment will not take effect until 2027. Here’s what to know.
What does Amendment 3 do?
The amendment will increase the homestead exemption to $150,000 in 2027 and to $250,000 in 2028. That amount will increase with inflation. The amendment does not affect property taxes that go to schools; homeowners will keep paying those.
A homestead exemption rewards people for living in the house they own by lowering their property taxes. Right now, the homestead exemption is $50,000.
Any person who moves to Florida after 2026 will have to wait five years to access the higher homestead exemption. (Some have questioned whether that provision is constitutional. A court challenge is likely.)
Amendment 3 also tightens the annual assessment cap for non-homestead properties, like second homes, apartment buildings and businesses. Before, property appraisers were able to increase the assessed values of those properties by up to 10% a year. The amendment lowers the cap to 5%.
Whether the amendment will end property taxes entirely is uncertain. The ballot summary promises that the Legislature will create a procedure for local governments to “increase the homestead exemption up to the full assessed value.”
What’s next?
DeSantis said previously that he would call the Legislature into a special session to pass laws implementing Amendment 3.
So far, he hasn’t done so. But with less than three months left of his term, DeSantis will have to move quickly if he wants any control or say over the process.
On Wednesday morning, DeSantis said he would let the Legislature’s leaders pick the dates for a special session, which would have to come before the end of the year.
DeSantis said he wanted to move intentionally to make sure the Amendment 3 implementation legislation lands “in a good way.”
One of his ideas is a taxpayer’s bill of rights to keep local governments from working around the amendment and raising taxes in other ways.
“They said it would be a tax shift; it’s not going to be a tax shift, it’s going to be a reduction,” DeSantis said.
DeSantis said he would also seek to set a schedule for further increasing the homestead exemption.
Another issue that will likely be tackled during a legislative session is the question of how, and whether, Florida should create a fund to reimburse rural, cash-strapped counties for the loss in property tax revenue.
When DeSantis rolled out his plan for Amendment 3, he wanted to create a trust fund to provide grants for local governments. But his plan did not include any information on where money for the trust fund would come from or how the grants would be doled out. Lawmakers ultimately removed mentions of the fund from the bill.
How will the amendment affect homeowners?
Florida homeowners could save thousands of dollars on their primary residence once Amendment 3 is implemented.
An exact average isn’t clear, but people who own lower-value homes will have the greatest portion of their tax bill cut. For some people, the amendment could eliminate their property tax bill entirely outside of the taxes they pay toward schools.
A tool created by the Tampa-based data company Signld lets people project their potential savings or extra spending based on a variety of scenarios under Amendment 3, including how local governments may respond.
The Tampa Bay Times also laid out what tax savings could look like for four hypothetical homeowners across the region, showing that new homeowners could see the most noticeable discounts.
How will it affect renters?
What, if anything, the amendment could mean for renters is less certain.
The Florida GOP and other supporters of the amendment say the non-homestead assessment cap will help keep renters’ costs lower.
But detractors say local governments may increase taxes and other fees to offset revenue cuts, and those additional costs could disproportionately fall on renters.
One study commissioned by some housing groups suggests that the average rent for a Floridian living in an apartment unit could rise by about $400 annually. For single-family rental homes, the amount would be about $1,000. That study did not show the formula used to calculate the rent increases.
Nearly 60% of Florida renters are cost-burdened, meaning they spend more than 30% of their income on housing.
DeSantis rebuffed the idea of renters seeing higher prices because of Amendment 3. In a news conference in October, he said nothing in the amendment forces renters to take on higher costs and that people should ask their local governments if they will create new costs.
What could happen to local governments and emergency services?
Florida’s counties and cities have potentially the most to lose under Amendment 3.
Local governments could lose around $12 billion annually by 2031 with the amendment implemented, according to a forecast from the nonpartisan state Revenue Estimating Conference.
By 2032, Hillsborough County could lose nearly $702 million in property tax revenue. In Pinellas, the county could lose around $318 million by the same year.
Individual cities will face steep cuts as well. St. Petersburg could lose up to $74 million annually, and Tampa could lose up to about $129 million.
Local governments could respond by cutting services for things like parks, libraries and emergency services. They could also create new fees or seek out sales tax increases. Already, St. Petersburg has looked into creating a special fee to fund the city’s fire services.
Florida firefighter and police groups spoke out against Amendment 3 ahead of Election Day, warning that it would force them to cut services and have slower response times. Pinellas County Sheriff Bob Gualtieri and Polk County Sheriff Grady Judd had maligned the amendment as a risk to emergency services.
Does this mean anything for healthcare?
The Florida Hospital Association previously estimated that under Amendment 3, hospitals could lose around 32% of their tax-collected revenue annually.
Some hospitals have special taxing districts, including two in Broward County, meaning certain hospitals are largely funded by property tax dollars. Those tax districts could lose millions of dollars under the property tax cut, according to an analysis from Florida Policy Institute.
Those cuts will come as Florida’s aging population continues to demand more healthcare resources, said Mary Mayhew, the head of the Florida Hospital Association.
Mayhew told the Times/Herald in July that programs that rely on Medicaid dollars could be hardest hit if budgets have to shift around. Medicaid pays less than 50 cents on the dollar for labor and delivery and for behavioral health costs. To keep those programs afloat, hospitals need to subsidize them with revenue from other areas.
Even without Amendment 3 in effect, hospitals were bracing for deep budget cuts. The Trump administration will cut Medicaid money to Florida over the next several years. By 2034, the federal government will stop paying around $4 billion into Florida’s Medicaid.
What about programs meant to help children?
Florida has 13 children’s services councils, which are voter-approved groups that provide social services for Florida families, like literacy support and water safety lessons.
Three of those are in the greater Tampa Bay area, with one in Pinellas, one in Hillsborough and one in Manatee County.
Those 13 children’s councils spend around $600 million annually on services – which could be cut by about $163 million under Amendment 3. Michele Watson, the head of the Florida Alliance of Children’s Councils and Trust, previously said the groups could see even deeper cuts if they lose out on matching funds.
Hillsborough could see cuts of around $20 million. Pinellas could have cuts of around $28 million, according to Watson.
Watson in July warned that investing money on the front end to help prevent negative child outcomes is “exponentially cheaper” than trying to fix issues from behind.
What could this mean for transit services?
Tampa Bay’s transit agencies warned that with Amendment 3 in full effect, they may have to make heavy cuts.
Pinellas’ transit authority said that by 2029, its annual operating budget could shrink by about a quarter. About 150 staffers could lose their jobs as a result. Busy routes would stay, the agency said ahead of the election, but less-popular routes that take people from their neighborhood to key bus stations may be cut.
And in Hillsborough, the transit authority warned it may have to eliminate six routes, with about 200 bus drivers losing work, according to a presentation ahead of Election Day from Hillsborough Regional Transit Authority staff.
Correction: Due to a reporting error, a previous version of this article misrepresented the language in the amendment. The amendment includes language that would have the Legislature create a procedure for cities and counties to increase the homestead exemption up to the full assessed value. This story has been updated.
