Florida's Bigger Homestead Exemption May Shield Much More Home Value From Property Tax

Written by:

Alejandra Rodriguez

Date:

06 Aug 2026

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Florida already attracts buyers with no state income tax. A ballot measure expected in late 2026 could add another financial incentive: a homestead exemption that jumps from $50,000 to $250,000, according to Tony Baroni, Founder & Team Leader of The Tony Baroni Team at Keller Williams Realty. For anyone considering a move to the state, or already living there and weighing whether to buy, the proposal changes the long-term cost calculation for owning a primary residence.

Baroni covers the Tampa Bay and Orlando markets and works heavily with out-of-state relocators. He says the measure is already coming up in conversations with prospective buyers from high-tax states and calls it one of the most significant policy developments he’s watching this year.

What the Exemption Means for Property Tax Bills

Florida’s current homestead exemption removes $50,000 from a primary residence’s taxable value. The proposed measure would increase that to $250,000, shielding a far larger portion of a home’s assessed value from property taxes.

The savings vary by county and millage rate. For a homeowner with a property assessed at $400,000, the current exemption shelters 12.5 percent of the home’s value. A $250,000 exemption would shelter 62.5 percent – a substantial reduction in the taxable base. In a state that relies on property taxes to fund local services because there is no income tax to supplement them, that translates to meaningfully lower annual carrying costs for homesteaded owners.

Baroni believes the combination could accelerate migration into Florida. He points to the pairing of “no state income tax along with super high homestead exemption savings” as a dual incentive few other states can match.

The Uncertainty Factor

The measure has not passed yet. Baroni notes it will be decided “coming up here in November, December, when on the new ballot.” Until voters approve it, the exemption remains at $50,000.

Even if it passes, there is a tension for local governments. A higher homestead exemption means less property tax revenue collected from homeowners. Counties and municipalities would either need to cut services, raise millage rates on remaining taxable value, or find revenue elsewhere. Buyers who factor the savings into their purchase decision should recognize that local governments may adjust in ways that partially offset the benefit over time.

There is also a demand effect to consider. If the measure passes and takes effect, it could draw additional buyers into the state, people moving specifically to capture the savings. That added demand could push home prices higher, partially eroding the annual tax reduction through a larger purchase price or mortgage payment.

Who Benefits Most

The exemption applies only to primary residences. Investors, second-home buyers, and seasonal residents who do not establish Florida residency would see no benefit. The change is designed to reward full-time residents.

For buyers already committed to relocating to Florida, the exemption adds a potential long-term cost advantage but should not be the sole reason to buy. Baroni observes that affordability is already the dominant challenge for buyers, with interest “rates doubling overnight, essentially, and interest rates being from 3% to 6 to 7%.” A lower tax bill helps offset higher borrowing costs, but only for buyers purchasing a home they can afford at current rates regardless of whether the exemption passes.

The exemption also interacts with Florida’s Save Our Homes cap, which limits annual increases in assessed value for homesteaded properties to 3 percent. Buyers who homestead early and hold long-term already benefit from that cap. Layering a $250,000 exemption on top would compound the advantage for long-term owners relative to recent purchasers whose assessed values have not yet been constrained.

What This Means for the Tampa Bay Market Specifically

Baroni says Tampa Bay inventory currently sits at 3.8 months and Orlando at 4.1 months, levels he describes as a seller’s market. But homes are taking 75 to 80 days to sell, up from two weeks to 30 days in recent years. Buyers are more selective, prioritizing move-in-ready properties because higher rates have consumed the budget they might otherwise have spent on renovations.

If the homestead exemption passes, it could tip some of those cautious buyers toward purchasing rather than continuing to rent. Baroni frames the core decision as whether “you want to pay a landlord or do you want to build equity for yourself,” and notes that for long-term residents, the tax incentives already favor buying. A larger exemption would widen that gap further.

For sellers, the implication is that a passed measure could expand the buyer pool, particularly among relocators comparing Florida’s total cost of ownership against high-tax states where they currently live.

About the Expert: Tony Baroni is Founder and Team Leader of The Tony Baroni Team at Keller Williams Realty, serving the Tampa Bay and central Florida markets with a focus on relocation buyers and residential listings across the region.

This article is intended for informational purposes only and does not constitute legal, financial, or investment advice. The views and opinions expressed herein reflect those of the individuals quoted and do not represent an endorsement of any company, product, or service mentioned. Readers should conduct their own due diligence and consult qualified professionals before making any investment decisions.