Key Takeaways
- • Florida voters approved Amendment 3 with 62% of the vote, raising the non-school homestead exemption from $50,000 to $150,000 in 2027 and to $250,000 in 2028, according to the Associated Press as cited by Fortune.
- • For billionaire homestead owners, the flat-dollar exemption yields minimal savings: an estimated $2,085 a year for a homeowner at the statewide average non-school tax rate, and only about $2,000 on a $50 million homestead.
- • The more consequential change is the cut in the non-homestead assessment cap from 10% to 5%, which slows tax growth on second homes, rentals and other non-primary properties, a meaningful factor for multi-property wealthy owners.
- • Local governments face a revenue hit: state economists estimate cities, counties and special districts will eventually lose $11.86 billion a year, with Miami-Dade County alone estimating roughly $385 million in first-year losses, and no new state funding offsets the cut.
- • Experts quoted by Fortune view Amendment 3 as unlikely to alter billionaire relocation decisions, which are driven by the absence of state income tax, lifestyle and business climate.
Summary
Florida voters on Tuesday approved Amendment 3, a major overhaul of the state's property tax system, with 62% of the vote according to the Associated Press. The measure raises the homestead exemption on non-school property taxes from $50,000 to $150,000 in 2027 and to $250,000 in 2028. Fortune reports that while supporters presented the change as relief for everyday homeowners, a flat dollar exemption delivers little benefit to the ultrawealthy who have recently relocated to South Florida, including Citadel CEO Ken Griffin, who moved his firm from Chicago to Miami, and Amazon founder Jeff Bezos, who moved to Miami in 2023 and has since bought a $237 million compound on Indian Creek.
Real estate attorney Raul Gastesi, cofounder of Miami law firm Gastesi Lopez Mestre & Cobiella, calculated that at the statewide average non-school tax rate, the expanded exemption will save a homestead owner about $2,085 a year once fully phased in. A home assessed at $350,000 would see its local services property tax bill fall from about $3,135 to about $1,050, while a $50 million homestead would decline from about $524,000 to about $522,000. Michael Ligon of The Ligon Group in Miami noted that relief is concentrated in the middle of the market, and Michael Martirena, a South Florida luxury real estate advisor, said the change is not a factor in his clients' decisions. Anyone who is not a permanent Florida resident by Dec. 31 starts at the current $50,000 exemption and reaches the full amount only in their fifth year, a shortfall Gastesi estimated at about $8,400 in forgone savings. University of Tampa economics professor Abigail Hall told Fortune that the amendment "may influence timing, but likely not destination."
The more significant provision for wealthy investors is the reduction of the annual assessment cap on second homes, rentals and other non-homestead properties from 10% to 5%. Gastesi estimated that in a market where values rise 8% a year, the owner of a $50 million second home would save about $15,750 in the first year and roughly $280,000 over five years. However, the state does not supply new funding to replace the lost local revenue. State economists estimate cities, counties and special districts will eventually lose $11.86 billion annually, and Hall said there is no reasonable way for local governments to fully close the gaps. Gastesi warned that a rate increase of just $1 per $1,000 of taxable value would cost the owner of a $50 million homestead about $49,750 a year, potentially erasing the exemption's savings many times over. He advised homeowners to review their tax bills closely, noting that "the savings on one line may come back on another."
Real estate attorney Raul Gastesi, cofounder of Miami law firm Gastesi Lopez Mestre & Cobiella, calculated that at the statewide average non-school tax rate, the expanded exemption will save a homestead owner about $2,085 a year once fully phased in. A home assessed at $350,000 would see its local services property tax bill fall from about $3,135 to about $1,050, while a $50 million homestead would decline from about $524,000 to about $522,000. Michael Ligon of The Ligon Group in Miami noted that relief is concentrated in the middle of the market, and Michael Martirena, a South Florida luxury real estate advisor, said the change is not a factor in his clients' decisions. Anyone who is not a permanent Florida resident by Dec. 31 starts at the current $50,000 exemption and reaches the full amount only in their fifth year, a shortfall Gastesi estimated at about $8,400 in forgone savings. University of Tampa economics professor Abigail Hall told Fortune that the amendment "may influence timing, but likely not destination."
The more significant provision for wealthy investors is the reduction of the annual assessment cap on second homes, rentals and other non-homestead properties from 10% to 5%. Gastesi estimated that in a market where values rise 8% a year, the owner of a $50 million second home would save about $15,750 in the first year and roughly $280,000 over five years. However, the state does not supply new funding to replace the lost local revenue. State economists estimate cities, counties and special districts will eventually lose $11.86 billion annually, and Hall said there is no reasonable way for local governments to fully close the gaps. Gastesi warned that a rate increase of just $1 per $1,000 of taxable value would cost the owner of a $50 million homestead about $49,750 a year, potentially erasing the exemption's savings many times over. He advised homeowners to review their tax bills closely, noting that "the savings on one line may come back on another."
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