With a property tax revolt stewing across the nation, Florida Governor Ron DeSantis turned up the heat by announcing his view that property taxes should be eliminated entirely last year.
Now, we finally have a specific plan for a property tax referendum that passed the state legislature during a special session this month.
What is in the plan? What lessons are there for other states? Will all property taxes in Florida be eliminated?
There is a great deal to learn from how Florida’s plan will work.
The plan:
The property tax reform amendment named “Save Our Homes from Excessive Property Taxes” will be on the ballot this November and requires 60% of the vote to pass.
- The amendment would increase Florida’s homestead property tax exemption (meaning the amount of home value of a primary residence exempt from property tax) from $50,000 to $150,000 beginning January 1, 2027, and then to $250,000 beginning January 1, 2028. The exemption would be adjusted for inflation going forward.
- The legislature will develop a framework for local governments to fully eliminate the property tax on homesteads.
- Florida has an existing homestead property tax cap and exemption. There is a separate cap for non-homestead and commercial properties of 10%. The ballot measure would reduce that cap to 5%.
- Ad valorem taxes levied by counties and municipalities would be restricted to specific uses: public safety, education, infrastructure, natural resource projects, debt service, employee retirement obligations, and basic government operations. This would constitutionally limit local government spending flexibility.
There are two significant changes from what Gov. DeSantis proposed to the legislature when calling the special session on property taxes.
First, the legislature exempted school property taxes from these changes. This is very significant as education spending makes up a significant part of budgets. It means even as the legislature implements a plan for full elimination, property tax on homesteads will never go away under this plan.
Second, the legislature removed a provision to create a state-level fund that would send money to localities to cover lost revenues due to property tax elimination.
The implementing legislation includes a very solid update to the state’s existing limits on property tax growth: The maximum millage a county, municipality, or special district may levy is the rolled-back rate (the rate that would generate the same revenue as the prior year on the new, higher tax roll) adjusted for per capita Florida personal income growth. A higher rate can still be adopted, but only under strict conditions: Up to 110% of the rolled-back rate requires a two-thirds vote of the governing body, or above 110% requires either a unanimous vote, a three-fourths vote (for bodies with 9+ members), or voter referendum.
Lessons to learn:
No tax hikes! The governor clearly stated he would not support any state tax increase to enable a plan to eliminate or reform property taxes and he lived up to this promise.
The final plan passed does not fall into the worst trap for states, which is to raise state taxes to subsidize local governments in an attempt to lower property taxes.
As ATR has warned many times, attempts to “buy down” locally controlled taxes with a statewide tax is terrible policy that only results in a temporary discounting of the local tax. It also breaks the accountability mechanism for tax hikes as local government gets revenue from a tax hike they do not have to vote on. Voters either lose clarity on who to hold responsible, or start holding state legislators responsible for local tax burdens and voting them out.
There was a component of the plan that the legislature removed, which would have created a fund at the state level to compensate local governments for revenue gaps due to the homestead property tax reductions in the plan. This is not a tax shift, but is a responsibility shift that is not ideal. In Florida, some very rural counties get a very high percentage of their revenues from homestead properties, which is why this provision was likely viewed as necessary. However, the implanting legislation addressed this challenge.
Local government spending is the right target. The Florida plan further limits automatic revenue increases from property taxes, and restricts how local governments can spend money. Locals can only spend ad valorem tax dollars on public safety, education, infrastructure, natural resource/ flood control, debt service on bonds, public employee retirement obligations, government operations.
Limiting automatic revenue growth and ensuring local governments only spend on the things local government is supposed to do puts the focus on unnecessary spending. Local governments should not be able to spend on pet projects and patronage and then hold police or fire spending hostage when taxpayers want accountability.
Florida CFO Blaise Ingoglia has been auditing local governments and highlighting how much they are spending. As of June 2026, the CFO’s office has tallied $3.7 billion in wasteful spending – meaning spending growth that exceed the rate of inflation plus population growth.
States can pursue caps on local government spending to directly limit their spending growth.
Full, immediate elimination of property taxes is not reasonable. The Florida measure shows the contrast between a more thoughtful plan to significantly limit property tax burdens and proposals to eliminate property taxes that include no details or step two.
North Dakota rejected a ballot measure to eliminate property taxes in 2024 for these reasons. The plan guaranteed state-level tax increases to compensate for lost property tax revenue. That does not reduce the tax burden, which should be the goal of tax reform.
School funding is a massive challenge. One of the reasons property tax elimination is far more convoluted than other taxes is that state constitutions require public education to be funded by the government. If a state simply eliminates property tax outright, there is an implied tax shift since the state must fund the education system and courts are unlikely to give leeway on that.
Nationally, roughly 50% to 65% of all property tax revenue collected goes directly to funding local public schools.
In Florida, local school boards must apply a required minimum property tax to raise revenue for schools, otherwise they are not eligible for state funds. All school funding is tied together with property taxes and the state government.
Florida legislators exempted schools from the growing homestead exemption, writing in their press release: “The amendment does not apply to ad valorem taxes collected by school boards.” By doing so, they avoided some tricky issues that could arise with replacing school revenue.
Limit built-in growth of local property taxes. Florida has a strong Truth in Taxation law, known as Truth in Millage in the state. It requires that local governments provide public notice if they are going to approve a budget that takes in more tax dollars than the prior one, they must also post the “rolled back rate” – what the tax rate would have to be reduced to for tax bills to stay the same as the prior year. They must affirmatively vote to adopt the revenue-raising budget. There is a bit more complexity to it, but the effect is important as taxpayers are made well aware when a budget will cost more of their hard-earned dollars. This keeps tax growth down.
The enabling legislation for the 2026 ballot question removes an income adjustment from the calculation of the rolled back rate, which will effectively lower it, tightening a way property tax burdens go up.
Commercial properties have people too. The ballot measure includes a significant strengthening of the commercial property tax assessment cap from 10% to 5%. Too often left out of the property tax discussion are businesses, condos, and apartments. Commercial property tax applies to larger buildings where people live. This affects small mom-and-pop landlords too. It is important the entire property tax burden is not shifted on to these people, but rather the focus remains on limiting the cost of government.
What other policies can states implement to responsibly reduce property taxes? How have tax shifts gone wrong? Learn more with ATR’s Guide to Property Taxes.
