Florida Gov. Ron DeSantis’ proposal to phase out property taxes for most primary homeowners is rapidly becoming one of the state’s most consequential housing debates in years.
Supporters argue it could ease affordability pressures while critics warn it may fuel higher home prices and reshape local tax structures.
The proposal would raise Florida’s homestead exemption from $50,000 to $250,000 — a move DeSantis said would eliminate property taxes for about 60% of homeowners.
The exemption would later increase to $500,000, potentially removing property taxes for as many as 92% of primary residences statewide.
Housing leaders told HousingWire the proposal could dramatically alter monthly ownership costs and reignite demand across the state.
“Overall, it can’t be a bad thing for housing,” said Aaron Davis, CEO of Florida Agency Network. “I mean, first and foremost, in both Florida and Texas there’s no state income tax, and that’s certainly helped in raking in businesses and people and wealth and jobs.”
Removing property taxes for primary homeowners, he said, could further strengthen the state’s appeal to employers and residents relocating from higher-tax states.
“If someone’s now looking at, say, New York versus Florida, or many other states from a jobs perspective, you can now say with the affordability, ‘Come live in Florida, work in Florida, buy a home in Florida and not pay property taxes,’” Davis said. “Property tax bills can be absolutely exorbitant in Florida. There’s also still commercial property tax, tax on rental vacation homes and tax on secondary residences that’s still going to be there.”
DeSantis has called a special legislative session next week to begin debate on the measure. Approval would require support from 60% of lawmakers and later 60% of voters in a statewide referendum.
The governor also proposed requiring residents to live in Florida for at least five years before qualifying for the tax relief.
Could savings fuel higher prices?
Beth Silverman, a Realtor and investment expert with eXp Realty in Florida, said the proposal could simultaneously improve affordability and increase home values.
“I think it’s a little bit of both,” she said. “I think that if this passes, we’re looking at a 4% to 9% increase in prices for a Florida homeowner. The equity is about 30 to 40 grand, which is great. However, that’s not the real affordability piece.”
Silverman said the proposal could especially benefit first-time buyers struggling to absorb rapidly increasing ownership costs after purchasing a home.
“Say you have a first-time buyer, newly married, and they bought a house for $420,000,” she said. “The taxes at the time of closing were $3,200, their insurance was $3,750 and the monthly mortgage was $3,500. They were committed. They love being homeowners. They stretched things and they made it work.
“Year two, their taxes were reassessed at $8,500 because that’s what happens in Florida after a sale. Their insurance crept up, normally $200 bucks — bringing their monthly mortgage to $400 more per month. Now they just got pregnant with their first baby. They are now dealing with the same grocery and gasoline prices as everyone else.”
Silverman said many younger homeowners have grown skeptical toward the status quo.
“For that Florida family, if a bill like this doesn’t pass, how do they share in this market?” she said. “They are now questioning whether or not owning a home was the right decision, and we have a chance to change this.”
First-time buyers, market mobility
Some analysts have questioned whether the proposal could deepen divides between longtime homeowners and first-time buyers — particularly because longtime owners already benefit from Florida’s homestead protections that cap annual assessment increases.
Silverman argued the proposal is designed to help buyers enter the market rather than reward existing owners.
“I think that this was built for the first-time buyer, which people should get really excited about,” she said. “When we lower the cost of affordability, it literally brings buyers off the sidelines and into houses.”
She cited that lower monthly ownership costs often determine whether some buyers qualify for mortgages at all.
“This bill could actually be the difference between qualifying versus not qualifying,” Silverman said. “People have to remember, this isn’t the market of 2021. We’re not competing against 15 offers where we have to waive an appraisal. Buyers have room to breathe, whether they’re first- time or seasoned.”
Davis said the proposal may also encourage existing homeowners to move up into larger homes after years of remaining sidelined by high mortgage rates.
“I think there’s pent-up demand for the move up, for home sellers and the buyer,” he said. So many people still have that 3.5% interest rate. I think mathematically, this may allow that home seller to say, ‘You know what? I can go ahead and sell my home because I’m now factoring moving into a different home.
“If you tell me I don’t have to pay property tax on that $600,000 home, it’s going to be a a different story than before.”
Renters and local governments
The proposal has also sparked debate over whether local governments would shift more tax burdens onto renters, apartment owners and commercial property owners.
Silverman — who owns rental properties in Florida — said landlords are already under significant pressure from rising insurance and property costs.
She said landlords currently have limited ability to raise rents because many tenants are already stretched financially.
“We have more inventory than ever before, and the landlords know that right now, renters cannot support any absorption in an increased rental payment,” Silverman said. “Because, again, gas, groceries and everything costs too much right now. The concern about [costs] shifting to renters is absolutely valid, but the market’s doing the real work to keep that in check.
“The biggest threat is to the landlords, because what happens when the small mom and pops can’t make the numbers work and we’re forced to sell? I believe that this is where the institutions who are doing build-to-rent are going to capitalize.”
Davis said broader impact of the proposal will ultimately depend on lawmakers balancing affordability relief with long-term funding stability for local governments and public services.
Still, he believes the measure could reshape the way buyers evaluate Florida real estate for years to come.
“Florida is one of those states that the housing market has always been strong, lots of jobs created, lots of economic booms and incentive created around housing,” Davis said. “Now, with this [tax proposal] it feels to me like this is less of a housing play and it’s more of a jobs play. With good paying jobs, come homeowners that can perhaps now afford a home they might not have been able to before.”
