Some long awaited property tax relief may be coming for Florida homeowners. In a recent initiative to alleviate the financial burden on Florida homeowners, Governor Ron DeSantis has proposed a significant increase in the state’s homestead exemption. The Governors proposal aims to provide substantial property tax relief amid rising housing costs and interest rates, but it won’t be easy to do.
Currently, Florida offers homeowners a homestead exemption of up to $50,000. The first $25,000 applies to all property taxes, including school district taxes, while the additional exemption of up to $25,000 applies to the assessed value between $50,000 and $75,000, excluding school taxes. This exemption reduces the taxable value of a primary residence, thereby lowering the property tax owed.
Governor DeSantis has suggested tripling the homestead exemption, which would significantly increase the amount of a home’s value that is exempt from taxation. He emphasized the need to limit property tax rates further, stating, “We need to limit even further property tax rates. We should be tripling the homestead exemption to make sure that our primary homeowners are protected.”
To implement such a change, a constitutional amendment would be required, as the governor and legislature cannot unilaterally alter the homestead exemption. Governor DeSantis acknowledged this, noting, “We can’t control private markets, but we can control how much they can tax you. So we’re going to be working over the next year and a half to see what we can present for voters to be able to vote in the next election for some major, major property tax limitations and reliefs.”
“Some of these local governments … do a pretty good job, but some of them waste your money, and I’d rather protect you and limit their ability to tax your (property),” DeSantis said during a Wednesday press conference. “So, we may be working with the Legislature to see if there are some things that we can put on the ballot so that voters have an opportunity to rein in the cost associated with property taxes and get further protections for Florida taxpayers. I think that would be really good, and I think that would be a great thing to leave to future generations.”
The proposed increase in the homestead exemption is intended to offset the rising costs of homeownership in Florida. The state has experienced significant growth in home prices, driven by high demand and inflation. Additionally, increasing interest rates have made mortgages more expensive, further straining homeowners’ finances. By increasing the homestead exemption, the governor aims to provide relief to homeowners facing these challenges.
However, the proposal has raised budgetary concerns among local government officials. Jacksonville City Council member Matt Carlucci expressed apprehension about the potential impact on city budgets. He stated, “It’ll make it harder on city government to invest in the basic public services, public safety, along with, you know, trying to invest in the quality of life, type of projects that we have in the city.”
In short, increasing the homestead exemption would reduce the taxable value of properties, leading to decreased revenue for local governments. This reduction could affect funding for essential services such as public safety, infrastructure maintenance, and community projects. Local governments may need to explore alternative revenue sources or make budget adjustments to compensate for the shortfall.
In response to the governor’s proposal, State Senator Blaise Ingoglia has announced plans to draft a bill that would raise the homestead exemption to $75,000. He noted that, using the median value, in 1990, the homestead exemption accounted for 32% of the value of a home, whereas today, it accounts for less than 10%. Ingoglia emphasized the need for tax relief, stating, “Floridians are demanding tax relief! It’s time to make housing affordable again!” Ingoglia said he will file his bill next week.
The process of amending the state constitution to increase the homestead exemption involves several steps. First, the proposal must gain approval from the Florida Legislature. If it passes, the amendment would then be placed on the ballot for voters to decide. Governor DeSantis has indicated that he plans to work with the legislature to develop a proposal that could be presented to voters in the next election cycle.
While the proposed increase in the homestead exemption aims to provide financial relief to homeowners, it also necessitates careful consideration of its potential impact on local government revenues and services. As the proposal moves forward, it will be essential to balance the goal of reducing property taxes with the need to maintain funding for essential public services.
Amid other proposals on the table, Governor Ron DeSantis’s proposal to increase Florida’s homestead exemption represents another step in the on-going discussion about reducing property taxes for Florida homeowners amid rising housing costs and interest rates. Of course, any decrease in taxes will have to be balanced with local budgetary demands. Perhaps it’s time for a Florida DOGE?
