Florida policy experts are sounding the alarm on the potential knock-on effects of Gov. Ron DeSantis' plan to slash homestead property taxes and limit how municipal governments can pay for everyday services.
One of the unintended consequences of the tax cut could mean higher rent for already rent-burdened people in South Florida, according to a policy and advocacy group working on behalf of municipal governments in Florida.
That's because local government may seek to close a shortfall in revenues by increasing taxes on non-homestead property — which includes rental units.
"Rents could go up as landlords pass through the additional tax burden that's placed on non-homesteads to renters," said Jeff Scala, a deputy policy director with the Florida Association of Counties (FAC) on a statewide call this Monday.
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The Florida Legislature is currently in a Special Session to vote DeSantis' proposal to increase the state's "homestead exemption" on property taxes for primary residences.
Florida Senate Bill 2-F, the "Save our Homes from Excessive Property Taxes Act," exempts the first $250,000 of a homestead's value from taxation and requires a schedule for full elimination of those taxes.
Homestead properties are a person's primary owned residence where they can claim an exemption on property taxes up to $50,000 of the home's value under current law. The exemption does not extend to second homes and properties someone rents out to a third party.
"Non-homestead isn't just small businesses. It's anything that isn't homestead. So it's your renters, it's your commercial property, it's businesses both large and small," Scala said.
'Relief' for homeowners
In a statement last week, DeSantis — who previously pushed an unsuccessful plan to fully eliminate property taxes on homesteads — said this proposal is a bid to improve affordability for Florida homeowners.
"Property tax revenue collected by local governments has nearly doubled in the past seven years and is expected to reach an astounding $83 billion by 2032. Florida homeowners need relief. Now is the time to stand up for taxpayers, enact a historic reform, and save the home of every Floridian," DeSantis said.
But local government officials warn that this move will actually make Florida less affordable, as costs are passed down to non-homeowners.
"Let me be direct: this affects your safety, your children's schools and the quality of life you have built here. Eliminating or severely gutting property taxes would be catastrophic for Miami-Dade County," Miami-Dade Mayor Daniella Levine Cava said in a recent column in the Miami Herald.
"Many renters and business owners could end up paying more despite receiving no direct benefit from a homestead exemption, as higher costs are often passed along through rent increases, fees and higher prices."
The proposed law would limit what services local governments can use property taxes for to "core services" including public safety, education, financing and refinancing of infrastructure and natural resources. As local governments lose out on homestead property taxes, they may increase taxes on non-homesteaded properties to shore up the difference.
The Florida Association of Counties estimates that the proposed changes will result in a negative revenue impact of nearly $340 million in Fiscal Year 2027-2028 for Miami-Dade, $260 million for Broward, and $280 million for Palm Beach County.
Miami-Dade County in particular is already operating under a strained budget thanks to the recent addition of new constitutional offices like the Miami-Dade Sheriff and Supervisor of Elections, and county leaders warn these changes would only further hamper the services local governments can provide.
Legislators are expected to vote on the new tax law early this week. The proposed changes must be instated by constitutional amendment, which requires a three-fifths vote of both the State Senate and House of Representatives.
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