Florida voters approved Amendment 3 on November 3, securing the 62 percent majority needed to amend the state constitution. The property tax overhaul reduces levies for long-term homeowners while altering how local governments fund public services, setting up a major fiscal shift as Governor-elect Byron Donalds takes office in January.
Governor Ron DeSantis spent the past year pushing for property tax relief, describing the levies as the worst form of taxation. Lawmakers moved forward with a measure that fell short of the deeper cuts DeSantis anticipated, leaving the future of the state’s tax system to his successor, Newsweek reported.
Byron Donalds defeated Democrat David Jolly with 50 percent of the vote to 48.7 percent on November 3, becoming Florida’s first Black governor. Donalds supported Amendment 3 on the campaign trail, but he signaled in August that the voter-approved measure is only the beginning of a broader restructuring.
According to statements made by Donalds in August and covered by Florida Politics, comprehensive changes to property fees and taxes across Florida will be put forward through the Taxation and Budget Reform Commission next year, regardless of whether the current measure passes.
He further mentioned that the upcoming year’s efforts are aimed at safeguarding seniors on fixed incomes from being taxed out of the state while ensuring working and young families have the chance to achieve the Florida dream locally.
How Amendment 3 Changes Property Tax Exemptions
The amendment takes effect on January 1, 2027. It raises the homestead tax exemption for non-school district property taxes to $150,000 in 2027 and $250,000 in 2028, with indexing to inflation starting in 2029.
The policy prioritizes long-term residents. New residents arriving after December 31, 2026, receive a smaller exemption capped at $50,000 until they reside in the state for five years.
Commercial real estate, second homes, and rental units are among the non-homestead properties affected by the amendment, which reduces the ceiling on annual assessed value increases for non-school taxes from 10 percent down to 5 percent.
University of Tampa economics professor Abigail Hall informed Newsweek that homeowners should see these adjustments appear on their proposed tax notices in August 2027, followed by their official bills in November.
Revenue Losses and Budget Pressures on Local Governments
Orange County estimates project a $275 million reduction in property tax revenue by 2028.
Florida’s Revenue Estimating Conference calculated that the changes will cut local government revenue by about $12 billion annually by fiscal year 2031–32. That total accounts for the $250,000 homestead exemption and the lower assessment-growth cap on non-homestead properties.
Sadaf Knight, the chief executive officer of the Florida Policy Institute, shared with Newsweek that the significant drop in property tax revenue caused by Amendment 3 will force communities to seek alternative revenue sources—such as cutting services, eliminating programs, or increasing other fees and assessments to sustain current levels.
Knight described the amendment as a cost shift that fails to provide genuine relief, warning that financial burdens will transfer to working residents. Shelton Weeks, a professor in the Department of Economics & Finance at Florida Gulf Coast University, told Newsweek that revenue losses will vary across communities depending on the local tax base.
A community with a large proportion of commercial and industrial properties will see a smaller decline in property tax revenue than one with limited commercial and industrial properties, Weeks told Newsweek.
Rising Costs for Renters and Changing Housing Markets
Hall told Newsweek that younger residents and renters receive little direct benefit while facing higher housing costs and reduced services.
I’d not be at all surprised if this shifts the calculus for developers and local governments when it comes to choosing between developing residential versus commercial or industrial properties, Hall told Newsweek. Simply, residential is already costly for local governments to service. With Amendment 3—building residential is a bad economic proposition. The result? Less housing.
Nicole Fox, a policy analyst at the Tax Foundation, told Newsweek that property owners who do not qualify for the increased homestead exemption could face higher tax bills if local officials raise millage rates to compensate for lost revenue.
Hall noted to Newsweek that individuals should expect potential rises in sales taxes, tourism levies, and charges associated with homes, cars, and other licenses wherever feasible.
Donalds May Limit Public Expenditures Rather than Introduce Taxes
Howard Frank, a professor of public policy and administration at Florida International University, mentioned to Newsweek that he anticipates Donalds will manage budgetary shortfalls by curtailing public spending rather than proposing fresh taxes.
I think Donalds will start to limit the expenditure side, Frank told Newsweek. We will see limits on growth tied to inflation and population. Increases in user fees will be curbed.
Hall told Newsweek that counties unable to cover basic services will need to appeal directly to state policymakers for assistance.
J. Edwin Benton, a Professor of Political Science and Public Administration at the University of South Florida, told Newsweek that voters focused on short-term tax cuts without weighing long-term consequences for public safety and infrastructure.
They did not think clearly about the huge implications of what they were doing, Benton told Newsweek. They were thinking short-term rather than long-term.
Benton said that the fallout from reduced funding for police, fire protection, and road repairs could create political risks for Donalds ahead of a potential 2030 reelection campaign. Emails requesting comment were sent to Donalds’ office and campaign by Newsweek on Wednesday and Thursday, but no replies were provided.
