On June 2, the Florida Legislature passed a property tax overhaul and sent it to the November ballot. The House voted 75-26, the Senate 30-9. If 60% of voters say yes, it becomes a constitutional amendment.
Homestead exemptions have received most of the press. The exemption jumps from $50,000 to $150,000 in 2027, then to $250,000 in 2028. It doesn’t touch school taxes (which is where most of your bill actually lives, so read the fine print before you plan the boat or 2nd home payment). The projected cost to local governments is north of $8.4 billion a year.
That’s the residential storyline.
Burying the lede for commercial real estate, though, ( which includes multifamily) non-homestead property annual increases drop to 5% from 10%.
What the 5% cap actually does
Florida already caps how much the assessed value of non-homestead property can rise each year. Today that cap is 10%. The amendment cuts it to 5%.
A few things worth understanding before you decide whether to cheer:
- The cap applies to the non-school portion of your bill. School millage is assessed on full market value either way. So this slows part of the increase, not all of it.
- The cap resets when the property sells or changes use. A new buyer starts over at market value. The benefit compounds for the owner who holds… it does nothing for the owner who just bought (or for the tenants who are now going to receive a pretty large cram down on their property management pass-throughs…better known as CAM..
- In a flat or falling market, the cap is irrelevant. It only bites when values are climbing faster than 5% a year.
So who wins? The long-term holder in an appreciating submarket. If you’ve owned a Florida industrial building or a strip center since 2018 and watched the assessment climb, halving the cap meaningfully slows the annual ratchet on the non-school side. Over a ten-year hold, that’s significant.
If you’re buying next year, it does close to nothing for you on day one. And it definitely negatively affects pass-throughs for your tenants
The Part Probably Not Discussed Enough
That $8.4 billion the homestead cut pulls out of local budgets has to come from somewhere. The Legislature stripped out the trust fund that was supposed to cushion rural counties during the transition. Spending got restricted to “core services” (schools, police, fire, infrastructure, the environment). Translation: cities and counties keep the same obligations with a smaller base to tax.
Commercial property does not get a super exemption. Apartments don’t either. When a local government is staring at a revenue hole and the homesteaded half of the tax roll just got walled off, the math points at the part that’s still exposed.
Bottomline: The amendment hands commercial and multifamily owners a tighter assessment cap with one hand, while setting up a fiscal squeeze that tends to land hardest on the property classes that didn’t get relief. Whether you come out ahead depends on your hold period, your submarket, and how your local taxing authority responds. So….who wins? The answer is a little murky.
The Senate Democratic leader called it a plan that could close small businesses and push rents higher. Both of these can be true: a landlord who gets cap relief and a tenant in the plaza that just sold next door eats a higher pass-through….perhaps to the point that they can no longer compete.
What to do with this now
Nothing is law yet. This is a ballot question, and 60% is a high bar. And that doesn’t even take into account over the past 30 years that Tallahassee has CONSISTENTLY ignored or significantly altered voter-approved ballot amendments. Plan for both outcomes.
- If you’re underwriting a long-term hold in a hot submarket, you can model a slower assessment ramp on the non-school portion… but build it as upside, not as a base case, until November settles it.
- If you’re buying, don’t price in a cap benefit you won’t inherit. The reset on sale erases it.
- If you own multifamily, watch the pass-through math. Cap relief on the ownership side and higher effective costs on the tenant side are not mutually exclusive. (I won’t get into the fact that the folks least able to afford the tax increases always seem to get caught in the crossfire on these deals. Those are folks renting places to live. They usually lose either way.)
- Your local millage rate is the variable to watch in 2027. The cap controls assessed value. The rate controls the bill. Guess which one a revenue-starved county can move faster.
Tax relief for homeowners will dominate the coverage between now and November. Fine.
But as CRE owners, the 5% line is the one that shows up in your NOI. Tenants in buildings that just sold? DUCK!
