On February 19, the Florida State House voted to move forward to pass CS/CS/HJR 203 – Elimination of Non-school Property for Homesteads, a constitutional amendment that would eliminate non-school property taxes for homeowners. The vote tally was 80 to 30.
The bill makes “homestead property exempt from all ad valorem taxation other than school district levies beginning in a specified year, to prohibit local governments from reducing total funding for services provided by law enforcement, firefighters, and other first responders, and provide an effective date.”
It further states that there will be a “constitutional protection for public safety by prohibiting counties and municipalities from reducing total funding for law enforcement below their 2024 or 2025 levels. This ensures that essential public safety services remain unaffected.”
What this bill means
The property tax amendment as it currently stands equals an approximately $13.3 to $14.8 billion shortfall in revenue across the state of Florida for local governments.
Every county in the state of Florida will lose recurring revenue. According to the Office of Economic & Demographic Research, the potential impact for the counties in our area are:
- Indian River County – a loss of $115 million annually
- Martin County – a loss of $161 million annually
- Okeechobee County – a loss of $9 million annually
- Lucie County – a loss of $288 million annually
What will be impacted
The bill states that public safety (law enforcement and fire-rescue) cannot be impacted by the lack of revenue collected by municipalities. So what will be affected?
While law enforcement and fire-rescue are protected, there could be an impact to staffing for these agencies and Emergency Medical Services (EMS) depending on budgets and how they are written.
Parks & recreation will most likely be impacted. Any improvements will likely be deferred or even eliminated.
Library hours could be decreased with some municipalities stating they would have to cut library services or even close some of their branches.
Money for capital improvements or infrastructure will be delayed or eliminated.
Rural counties will likely have to depend on funding from the state legislature to operate much less improve any infrastructure or amenities.
Additionally, organizations like the South Florida Water Management District (SFWMD) are tax funded. The SFWMD relies heavily on ad valorem taxes to fund the $1.283 billion budget, with taxes accounting for roughly 43% of its revenue. Eliminating these taxes on homesteads would remove a primary, independent funding source.
Children Services Councils are funded by way of property taxes.
A Children’s Services Council (CSC) is a countywide special taxing district created by ordinance, and approved by voters, to fund programs and services that improve the lives of children and their families.
By reducing property tax revenue, should this legislation pass, it could force the individual councils to cut programs and services as their dedicated funding would be drastically impacted.
The money has to come from somewhere
There will be a shift in the tax burden to consumers, tourists, and renters.
The most obvious solution to amend the shortfall that will be experienced by municipalities is to increase the sales tax.
The Florida Chamber of Commerce estimated that covering these losses would require increasing the state sales tax from 6% to 8.85%.
The James Madison Institute stated that one analysis suggests that a full replacement for only the school portion of property taxes could require an increase in the statewide sales tax rate by approximately 2.1 percentage points, to around 8.1% (or potentially as low as 6.58% due to economic growth assumptions).
However, there are some estimates like that from a report published on February 24, 2025, from the Florida Policy Institute (FPI) that if Florida eliminates property taxes, it would need to more than double its current 6% state sales tax rate to at least 12% and up to 14% to offset the lost local revenue.
Inevitably, higher sales taxes affect tourism rates.
Higher sales taxes, including increased lodging and tourist-related levies, generally deter visitors. Generally speaking, it leads to shorter stays compared to lower-tax destinations. Families will pay more for lodging, food, and merchandise. This can remove competitiveness with comparable destinations when a family can vacation somewhere else for longer for the same amount of money.
As a portion of the tax burden could be shifted to property management companies and landlords, it has been projected that rental rates will increase as renters don’t pay property taxes but their landlords do.
Commercial properties may also see an increased rate. If they have tenants, it could possibly result in increased rents for their tenants also.
There is also the possibility that residents could see higher vehicle taxes and higher public service fees.
The upside - if there is one
If there was an upside to the proposed tax reform, it would be more homes being occupied by primary residences as those owning 2nd homes or investment properties, depending on their financial situations, may choose to sell them.
The downside is that should these properties sell to primary homeowners who homestead these properties, there will be even less available to support the services needed to sustain a community.
What's next?
In order for the bill to be on the 2026 ballot, it must now pass the Florida Senate. Should that happen, there will be an opportunity for voters to weigh in, with a required 60% voter approval for this to be implemented.
It’s evident that even if revenue is generated in other ways, funding for services and amenities will inevitably have to be prioritized.
Unfortunately there have been no suggestions from the Florida Legislature as to how this would be accomplished.
Ultimately, eliminating property taxes would continue to remove home rule by tying the hands of city, county, and town commissions as they struggle to relying on Tallahassee to fund things like public services as well as maintain roads and infrastructure.