On November 3, Florida voters approved Amendment 3, a significant change that will allow numerous homeowners to pay reduced taxes on their primary residences starting in 2027. While this could lead to lower revenue for local governments, it may also result in increased costs for some renters.
The initiative garnered approximately 62% of the votes, surpassing the 60% threshold required to amend the state Constitution, according to preliminary results from Creative Loafing Tampa, with 96% of precincts reporting.
Championed by Governor Ron DeSantis, the measure significantly broadens the homestead tax exemption, which lessens the taxable value of a home for certain tax calculations.
Financial Impact on Miami-Dade Homeowners
The reform will enhance the exemption for non-school taxes from about $50,000 to $150,000 in 2027 and then to $250,000 in 2028, with future adjustments for inflation. Taxes designated for schools will remain unaffected by this amendment.
Homeowners in areas like Hialeah, Kendall, or Doral could see substantial savings. According to Axios, Miami-Dade Property Appraiser Tomás Regalado estimated that an annual tax bill of around $6,000 could be reduced to approximately $4,367 in 2027 and $3,289 in 2028, based on current tax rates.
His office predicts the average savings for eligible county homeowners could be about $1,700 in the first year and $2,700 in the second, although this will depend on each property's assessed value and local tax rates.
New Florida residents won't immediately receive the expanded benefit. Those who are not Florida residents by December 31, 2026, will initially qualify for the basic exemption, but only after five years will they be eligible for the enhanced exemption, as permitted by the U.S. Constitution.
Consequences for Renters
Renters won't directly benefit from the tax reduction since the exemption applies only to owner-occupied primary residences.
A study by Jared Walczak of Walczak Policy Consulting, conducted for several housing organizations, suggests that rents might rise if local governments increase taxes on rental properties to offset revenue losses.
However, the amendment also lowers the annual cap on the assessed value increase for non-primary residence properties, including rental properties, from 10% to 5%. This cap does not prevent tax bills from rising if tax rates change.
The potential impact on renters was a major discussion point during the campaign.
Reduced Revenues for Local Governments
The reform poses a challenge for public budgets. State economists estimate that Florida's local governments will see approximately $4.9 billion less in revenue in the 2027-2028 fiscal year and $8.7 billion less in 2028-2029, assuming current tax rates remain unchanged.
In Miami-Dade, county officials project a revenue shortfall of about $386 million in the first year and $697 million in the second, funds typically used for services like fire departments, transportation, libraries, and infrastructure maintenance.
During the campaign, several Cuban-American officials in Miami-Dade, including Regalado and Sheriff Rosie Cordero-Stutz, publicly supported the proposal.
Conversely, police associations and authorities from other areas warned about potential repercussions for public safety due to revenue cuts.
Amendment 3 is set to take effect on January 1, 2027, requiring local governments to adjust their budgets to the new fiscal regulations.
Understanding the Effects of Amendment 3 on Taxes and Housing in Florida
How much could Miami homeowners save under Amendment 3?
Miami homeowners could save approximately $1,700 in the first year and $2,700 in the second year, depending on their property's assessed value and local tax rates.
What impact will Amendment 3 have on renters?
Renters will not receive direct tax benefits, and there is a possibility of rent increases if local governments raise taxes on rental properties to compensate for revenue losses.
When will Amendment 3 take effect?
Amendment 3 will come into effect on January 1, 2027.