Florida Property Tax Elimination Debate Raises Questions About Local Government Funding

Florida is considering a property tax proposal that could make it the first state in the nation to eliminate taxes on homesteaded properties. Governor Ron DeSantis and Chief Financial Officer Blaise Ingoglia support the idea, but a November 2025 debate at the University of South Florida revealed sharp disagreements about how local governments would pay for essential services after losing this revenue source. 

Former Republican state legislator Jeff Brandes called the current approach “policy malpractice” during the public forum. For real estate developers, investors and property managers operating in Florida, the lack of detailed implementation plans creates uncertainty about future operating costs and local service levels.

The Revenue At Stake

A Florida Chamber of Commerce report presented during the debate shows that Florida collected $55 billion in property taxes statewide in 2024. Counties received $19.6 billion and cities took in $8.6 billion. School districts, independent special districts and municipal service taxing units collected the remainder. These funds pay for police departments, fire services, infrastructure maintenance and schools. The scale of this revenue source means any changes to property tax collection would affect municipal budgets across the state.

What Lawmakers Have Proposed So Far

Eight House Republicans filed legislation in October 2025 focused on homesteaded properties. Seven of the proposals are structured as constitutional amendments for the November 2026 ballot. 

The measures would not affect school or law enforcement funding, according to the Florida Phoenix report. Governor DeSantis rejected the multi-amendment approach and said placing more than one property tax measure on the ballot was an attempt to kill progress on the issue. He wants a single constitutional amendment on property taxes. 

The governor vetoed $1 million that legislators included in the state budget to study the consequences of eliminating property taxes. For real estate fund managers and developers tracking this issue, the absence of replacement revenue details makes long-term planning difficult.

How Current Tax Caps Create Market Disparities

Florida’s Save Our Homes amendment caps annual increases in the assessed value of primary residences at 3% or the percentage change in the Consumer Price Index. During the USF debate, Dr. Esteban Santis of the Florida Policy Institute noted that first-time homebuyers pay higher property taxes than their neighbors who have owned homes for longer periods. 

Former Senator Brandes said people who bought homes during the pandemic and now pay the full assessed value are the ones most upset about property taxes. Long-time homeowners benefit from decades of capped increases. CFO Ingoglia acknowledged that the current system disproportionately burdens new homebuyers by increasing their total monthly housing costs, including taxes and insurance.

The Math Behind Revenue Replacement

The Florida Chamber of Commerce white paper shows that Florida currently has a 6% sales tax. Replacing all property tax revenue would require increasing the sales tax to 14%. Replacing only homestead property taxes would require an 8.85% sales tax rate. 

These calculations do not include existing local sales taxes of 1% or 1.5% that many counties already charge. CFO Ingoglia disputed these projections during the debate. He said the numbers assume the government needs all current revenue and argued that local governments are taking in more money than necessary. 

Ingoglia believes local budgets could be cut by approximately 15% without affecting essential services. For commercial real estate operators and investors, any shift from property taxes to sales taxes would change how cash flow projections work and how investment returns are calculated.

Questions About Service Cuts And New Revenue Sources

Former Senator Brandes, who now heads the Florida Policy Project, said the proposal lacks detail about what comes after property tax elimination. He asked whether the plan means cutting police and firefighters or doubling the sales tax. 

Brandes suggested that cities and counties may increase their millage rates on renters and small business owners because most counties are not at the maximum allowed rate. He said the lack of transparency removes accountability from the process. 

During the debate, Brandes compared the situation to a doctor removing an organ without first studying the consequences. CFO Ingoglia agreed that there should be a plan and said the governor’s office, House and Senate were running numbers to provide more information.

How Government Spending Differs From Household Budgets

Dr. Santis explained during the debate that government expenditures work differently than household spending on consumer goods. While both types of budgets include costs like energy and fuel, government spending primarily covers teacher salaries, law enforcement personnel, sanitation services and emergency services. 

These costs include personnel expenses and fringe benefits. CFO Ingoglia has visited several of Florida’s largest cities to present audit findings alleging that local governments engaged in hundreds of millions of dollars in wasteful and excessive spending. His audits factored in reasonable inflation and population increases when determining whether local governments were overspending.

Public Opinion And Information Gaps

CFO Ingoglia noted during the debate that opinion polls show the idea of eliminating property taxes on homesteaded properties is overwhelmingly popular. Former Senator Brandes questioned how the polling questions were framed. 

He said asking people whether they want to cut property taxes gets universal agreement, but the question leaves out what happens next. Brandes suggested that if people knew cities and counties would become dependent on state funding for police, firefighters and road maintenance, they might answer differently. 

Brandi Gunder of Florida TaxWatch also participated in the USF forum and emphasized the need for voter transparency.

What Real Estate Businesses Should Consider

Property tax policy changes of this scale affect all segments of Florida’s real estate market. Developers need predictable cost structures to secure project financing. Investors managing commercial portfolios need to understand how tax shifts may affect operating expenses. 

Property managers face potential challenges if local governments lose reliable funding for infrastructure and public services that support property values. The earliest any constitutional amendment could reach voters is November 2026. 

However, the current proposals do not include detailed implementation plans. This makes it hard for real estate professionals to model potential financial outcomes or adjust investment strategies.

Planning In An Uncertain Environment

Florida’s property tax debate continues as state leaders work on proposals for the 2026 ballot. Real estate developers, investors and fund managers should track legislative developments and understand how different scenarios may affect their operations. The outcome may influence project feasibility, operating budgets and local service quality for years. Make business decisions backed by insight rather than speculation. Partner with our advisors to gain practical strategies for growth in Florida’s changing real estate market. Learn more about how we support real estate businesses.

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