Florida is undergoing significant tax reform, with lawmakers actively working on a comprehensive property tax overhaul aimed at providing relief to residents, particularly seniors. Concurrently, the state has seen the expiration of its sales tax on commercial leases, a move widely celebrated by the business community.
Property Tax Reform Efforts Underway
Florida lawmakers are delving into the complexities of the state’s property tax system, with a potential ballot measure in 2026 to address long-standing issues. A key focus is easing the burden on seniors who own their homes outright, as they are more sensitive to rising tax bills. The current "Save our Homes" cap, which limits annual assessment increases to 3%, creates disparities between long-time homeowners and newer buyers, especially in high-cost areas. The Florida House of Representatives Select Committee on Property Taxes is exploring various proposals, including rolling back rates to 2022 levels, introducing alternative revenue streams, increasing homestead exemptions, and providing targeted relief for seniors. Some proposals even suggest eliminating property taxes altogether, potentially funded by a sales tax on real estate transactions and tourism services.
- Key Takeaways:
- Efforts are underway to overhaul Florida’s property tax system, with a potential 2026 ballot measure.
- Relief for seniors and addressing tax disparities for long-time homeowners are primary goals.
- Various proposals include tax rate rollbacks, alternative revenue, and increased exemptions.
- The potential elimination of property taxes is being discussed, with alternative funding mechanisms proposed.
Lease Tax Expiration Brings Relief to Businesses
As of September 30, Florida has officially ended its sales tax on commercial leases, a levy that had been in place for decades and made Florida the only state to impose such a tax. This repeal is expected to provide significant financial relief and stability to businesses across the state, particularly small and mid-sized companies for whom lease expenses represent a substantial overhead. Business leaders anticipate that the removal of this tax will not only free up capital but also make Florida more competitive in attracting new companies. The fluctuating rates of the lease tax in the past had also created uncertainty for tenants and landlords, making its elimination a welcome change.
Broader Economic and Housing Implications
Beyond property and lease taxes, broader economic reforms are also influencing Florida’s housing market. While extensions of certain tax cuts and the permanence of mortgage insurance premium deductions are seen as beneficial, providing stability and making homeownership slightly more accessible, concerns remain about affordability for first-time and low-income buyers. The lack of new federal down payment assistance or buyer credits within recent legislation pushes the responsibility for affordability solutions to state and local governments. The bill’s impact on the national debt and potential future mortgage rates is also a point of discussion, with some viewing increased federal debt as fiscally irresponsible. However, provisions like the Qualified Business Income deduction and the expansion of the Low-Income Housing Tax Credit are expected to incentivize investment and development, potentially benefiting Florida’s real estate sector, particularly in commercial projects and affordable housing initiatives.
### Sources
- Florida House begins work on property tax overhaul, Tallahassee Democrat.
- Florida ends lease tax, Tampa businesses celebrate, Tampa Bay Business & Wealth.
- DeSantis, legislators push for property tax overhaul in Florida, The Business Journals.
- Florida lawmakers to discuss eliminating, reducing property taxes, FOX 35 Orlando.
- What does ‘One Big Beautiful Bill’ mean for Florida’s housing?, Sarasota Herald-Tribune.