Florida's Property Tax Proposal Could Revitalize the Housing Market

Written by:

Alejandra Rodriguez

Date:

03 Mar 2026

Share

Share via Facebook

Share via Linkedin

Share via X

Copy to clipboard

For years, many would-be Florida buyers have hesitated, citing rising property taxes, insurance costs, and concerns about hurricanes. But a major policy shift could soon change that equation. The governor’s office is advancing a proposal to provide significant property tax relief for Florida homeowners, including the potential elimination of property taxes for those with a homestead exemption. If enacted, this would be the first policy of its kind in the country — and it could open the floodgates for new buyers.

Joe Murphy, team leader of the Joe Murphy Team in Sarasota and Manatee County, says the proposal is already shifting buyer attitudes, especially among retirees and remote workers. “Once the rest of the country catches up to what’s happening here, a lot of people are going to reconsider Florida,” Murphy says. “I don’t know a homeowner who likes paying property taxes.”

What’s in the Proposal

While the details are still emerging, the plan centers on major property tax cuts for primary residences. Florida’s homestead exemption already provides some relief for full-time residents who own and occupy their home as a primary residence — currently reducing a home’s taxable assessed value by up to $50,000. The new proposal would go much further, dramatically reducing — or potentially eliminating — property taxes for residents who claim the exemption, making Florida ownership more affordable than ever.

Murphy, who has worked in Florida real estate since 2002 and has sold over 1,400 homes, notes that the news is spreading quickly among buyers who were previously hesitant due to ongoing costs. The state’s recent reprieve from major hurricanes and signs of stabilization in the insurance market are adding to the appeal. “It’s a perfect storm in the other direction,” Murphy says.

Why It Matters Now

Property taxes in Florida can be a significant expense, often exceeding $7,500 per year on a $500,000 property. Over a decade, that would add up to $75,000 — money that could otherwise be used for renovations, travel, or savings. Unlike many states, Florida already has no state income tax, making it a popular choice for retirees and high-income earners. If property tax relief is added, the state becomes even more attractive for those looking to maximize their retirement income or lower their overall cost of living.

According to Murphy, the combination of no income tax and potential property tax reductions would be a major incentive for buyers from high-tax states such as New York, New Jersey, and Illinois. The proposal is expected to draw more attention as it moves through the legislature later this year, and if passed, could lead to a surge in relocations.

How Buyers Can Prepare

If you’re considering a move to Florida, there are specific steps you can take now to get ahead:

Research Specific Neighborhoods: Not all areas will be affected equally by the proposed tax relief. Some neighborhoods, especially those popular with retirees or remote workers, may become even more competitive if the policy passes. Murphy recommends starting your search in established lifestyle communities and master-planned developments like Lakewood Ranch, which has consistently ranked as the top multi-generational community in the U.S.

Line Up Financing: Whether you’re financing or paying cash, having your ducks in a row before making an offer is essential. Mortgage buyers should get pre-approved, while cash buyers should have proof of funds ready to go. About half of single-family home sales in Murphy’s market are cash deals, so sellers are more likely to consider offers from buyers who are prepared to close without delays.

Look for Homes Needing Cosmetic Updates: Florida’s market has seen three years of price softening, and buyers are currently avoiding homes that require significant work, leaving properties that need only minor updates on the market longer and at lower prices. Murphy suggests that buyers willing to take on light renovations can find better deals and build equity as the market stabilizes. “Buyers who have some vision and don’t mind doing a little work can reap the rewards,” he says.

What to Watch

Florida’s property tax proposal is expected to become a central issue as the legislative session progresses through summer and fall. Murphy anticipates that once the details are finalized and the policy receives broader media coverage, Florida will see an influx of new residents seeking to take advantage of the tax relief.

Meanwhile, the state’s housing market is showing signs of stabilization after three years of price declines. Inventory has increased to roughly four months of supply — higher than the pandemic lows but still well below the oversupply seen during the 2008 recession. “We’re at the tail end of falling price points,” Murphy says. “Prices will stabilize, and we’ll see an increase in volume.”

About the Expert: Joe Murphy leads the Joe Murphy Team, a top-producing real estate group in Sarasota and Manatee County, Florida. With over 1,400 homes sold since 2002, he specializes in helping buyers and sellers navigate Florida’s changing housing market. His team was recently recognized as the top production agent for their office, one of the largest in the state.

This article provides general market insights and information about Florida’s proposed tax policy and is for informational purposes only. The views expressed reflect views of the individuals quoted and do not constitute an endorsement of any property, development, or course of action, nor are they intended to induce any real estate transaction. This article does not constitute legal, financial, or investment advice. Buyers should consult a licensed professional for advice tailored to their individual circumstances.