Legislative Update 2025 - Flipbook - Page 46
Education on Tax Reform Continued
Property tax collections don’t have to rise just because property values do—that decision lies
with taxing authorities when they set their millage rates.
To qualify for homestead benefits, the property must be the permanent residence of the owner
or a legal dependent (such as a minor child).
Homestead properties are eligible for two exemptions: the first $25,000 applies to all property
taxes, and an additional $25,000 applies to the portion of value over $50,000, but only for nonschool taxes.
In addition to these exemptions, homestead properties are also subject to assessment
limitations that cap annual increases in assessed value.
The Save Our Homes benefit caps annual increases in the assessed value of homestead
properties to the lesser of 3% or the change in the Consumer Price Index (CPI).
The difference this creates between the market (just) value and the assessed value is known
as the homestead differential, and up to $500,000 of it can be transferred to a new homestead
when a homeowner moves—this is called portability.
Roughly 35% of property tax revenue in Florida comes from homestead properties. The
remaining 65% comes from non-homestead residential, commercial, industrial, and
agricultural properties.
The U.S. Constitution prohibits states and local governments from taxing federal property and
prevents states from favoring their own citizens over residents of other states. These provisions
can affect how property tax exemptions are structured.
In Florida, the state constitution grants local governments the authority to levy ad valorem
taxes within set millage limits and outlines specific exemptions. Nearly all major property tax
rules, restrictions, and exemptions are governed by the Florida Constitution, and state
lawmakers are bound by those limits. Much of Florida’s property tax law is also shaped by court
decisions interpreting constitutional provisions.
Representative Tramont expressed concern about long-term renters, noting that rising
property taxes are often passed down from landlords to tenants, resulting in higher rents. He
cautioned against completely eliminating taxes on non-homesteaded properties, emphasizing
the need for balance.
Representative Hart raised questions about the broader fiscal impact, asking:
