Property taxes are Big Real Estate expense Property Owners must pay yearly or lose their Property. U.S. News & World Report includes Professor Real Estate® Suzanne Hollander’s property tax comments its April 14, 2025 article. Read it below! Do you agree with no Property Tax? 
As Florida lawmakers debate Gov. Ron DeSantis’ proposal to eliminate state property taxes, buyers, sellers, agents, renters and landlords are trying to figure out the potential fallout.
DeSantis has floated the idea of eliminating property taxes, a plan that would require major restructuring of how local governments are funded. He has also suggested immediate relief to Florida homeowners through a tax rebate. Lawmakers in both the state House and Senate have responded with different proposals to trim the sales tax, along with other tax changes. DeSantis, however, says he wants to aim tax relief at residents, not tourists.
Property taxes are collected by municipalities in all 50 states and help fund public services such as schools, firefighters and police, among other things. While a change in Florida is far from reality, requiring a constitutional amendment with 60% voter approval, it raises the question: What would happen if Florida eliminated or reduced property taxes?
Given Florida would be the first state to eliminate property taxes, there is no good model for what could happen if the policy is passed. To better understand what this proposal could do for homeowners, buyers, sellers and renters, we spoke with experts to break down the potential positive and negative impacts.
The comments come just days after DeSantis formally proposed a $1,000 property tax rebate for Florida homeowners in a $5 billion plan now awaiting legislative approval. If it passes, checks could start going out in December.
How Florida’s Property Taxes Currently Work
Property taxes are levied based on a property’s annual assessed value. A municipality collects these funds and disburses them to fund local services.
“Schools receive the biggest funding, but you also have a local fire department, police officers, roads and other maintenance. However, the percentage of funding varies by municipality,” says Noelle Tassey, CEO and president of Redy, an online real estate platform based in Manhattan where agents bid to represent listings.
According to the Florida Policy Institute in Orlando, Florida, property taxes make up 18% of county revenue, 17% of municipal revenue and 50% to 60% of school district revenue, depending on the community.
The institute’s 2025 report shows around $43 billion is collected from property taxes in Florida and allocated to these local services. However, policy analyst Esteban Leonardo Santis says updated numbers are closer to $55 billion.
How Would Florida Replace Property Tax Revenue?
No official plan has been released about how property tax revenue could be replaced. “Ultimately, whatever you end up doing it’s going to have to be pretty drastic. Nothing is free and budgets have to be balanced. You have to raise revenue equitably or cut services,” Santis says.
The state Senate has outlined a plan to cut sales taxes and commission a study by the Office of Economic and Demographic Research on eliminating property taxes in advance of a potential constitutional amendment for the 2026 ballot, with findings due in the fall.
Possible funding sources include:
- Higher consumption-based sales taxes
- Budget cuts
- Increased tourism tax
- Locally determined special assessments for certain services
- A combination of these
Suzanne Hollander, an attorney and associate professor at Florida International University’s Tibor and Sheila Hollo School of Real Estate in Miami, feels the best solution is to combine multiple funding sources to ensure a balanced budget without excessive cuts.
“There are a lot of ways it could be funded,” says Hollander. “Increasing restaurant, hotel and tourist attraction taxes. They could trim the municipal budget to make sure there’s no waste. They could increase property transfer fees so that when you buy or sell a property, you pay a one-time fee, like documentary stamps. They could implement different millage rates for different uses of the property. Maybe there is no property tax for residential homesteaded property, but there is one for commercial property.”
While these ideas and others could theoretically offset the $55 billion deficit for municipalities, implementing them proves challenging.
The Hurdle of Replacing Property Taxes
Florida law requires a supermajority for tax increases, meaning any changes to millage rates, tourist taxes or consumption taxes, among others, would need an individual joint bill where two-thirds of both chambers to vote in favor of the change.
“Each funding solution would need its own joint bill and pass a majority within the Legislature. This makes it difficult to combine funding solutions versus having one option to replace the funding. It’s not impossible, but it’s a hurdle because of all the levers to pull,” says the Florida Policy Institute’s Santis.
Impacts of Eliminating Florida’s Property Taxes
It’s unclear how eliminating property taxes would fully impact homeowners, renters, buyers and sellers. The Senate bill should help provide a more concrete picture, but for now, there are theories.
Improve Homeownership Affordability
Florida homeowners are struggling with rising housing costs. According to Redfin and CoreLogic data, home prices in Florida rose an astronomical 64% over the last five years, while property taxes increased 47.5% from 2019 to 2024.
Florida’s Save Our Homes program caps annual increases in the assessed value of homestead properties at 3% or the Consumer Price Index, whichever is less. This is designed to prevent property taxes from rising too rapidly compared with home price increases. The goal is for assessed values to remain lower than market values, reducing the property tax burden.
Eliminating property taxes removes a fluctuating cost for homeowners, offering more security, particularly for those on fixed incomes, such as retirees and the elderly.
No Risk of Losing Your Home From Unpaid Taxes
“Taxing land/property is the most oppressive and ineffective form of taxation,” DeSantis said in his initial post in early February about the proposal on the social platform X. He followed up later that month, saying, “You’re basically paying rent to the government to live on your own property,” during a press conference on Feb. 24.
Right now a municipality can file a lien against a property for unpaid taxes. If the amount remains unpaid for long enough, the lien can be sold at a tax deed auction, resulting in loss of ownership, even if the home is owned free and clear. This would eliminate that risk entirely.
Property Values Would Likely Increase
“Property taxes have an interesting double-sided impact on property values,” says Tassey, who has observed that in the New England market, lower property tax states often have higher median home prices.
For example, Connecticut’s lower property taxes result in significantly higher home values compared with neighboring Massachusetts. While Massachusetts home prices are also comparatively high, its property taxes hike the overall cost of homeownership.
“Massachusetts has a much higher property tax, so the price of the home accounts for the higher cost of property taxes,” Tassey says.
Higher property taxes can have appeal when they fund an attractive level of services, but that is often a harder case to make when home shopping. Generally, lower property taxes tend to have a positive impact on home prices by making properties more attractive to buyers.
Foreign Investment and Buyer Interest Could Increase
“Florida is one of the lowest tax-burdened states to live in. Many people are already interested in moving there for that reason,” says Tassey. Eliminating or further reducing property taxes could lead to more foreign investment and out-of-state buyers, she says.
This could be a good thing to help gobble up some of the oversupply certain housing markets like Miami are facing, but it may also drive up prices, making homeownership even less attainable for renters looking to buy, says Tassey.
Rents Could Come Down
“Landlords bake the property taxes and insurance into your rental rate. So, if property taxes can be eliminated, it takes away a big cost that landlords have,” says Hollander.
This could theoretically make rents more affordable, but market supply and demand will ultimately dictate pricing. A lower cost for landlords doesn’t necessarily mean they’ll pass those savings on to renters.
It Could Result in Underfunded Services
Some proposed replacements, like sales and tourism taxes, fluctuate with consumer spending, raising concerns about whether Florida can reliably replace billions in lost revenue without cutting public services.
If a viable funding plan isn’t approved, cutting services is the only option impacting schools, infrastructure, transportation and libraries among other public services.
Tassey again highlights Connecticut as an example. She says wealthier rural areas have access to well-funded public services, while many densely populated cities with lower-income households are struggling with urban decay due to insufficient funding.
Property Values Could Decrease
Tassey and Hollander believe property values could rise as demand increases from foreign investors and out-of-state buyers. However, Santis argues that if public services are cut, affluent homeowners may relocate to areas with better services, reducing demand and potentially driving prices down. “Eventually, the people who can will vote with their feet and move to areas that have services provided,” he says.
Residents Might Pay More in Other Ways
In 2024, Florida legislators proposed a property tax cut, suggesting replacing the lost revenue with a consumption tax increase, but that bill died in committee. DeSantis has said on X he would not allow a sales tax increase to fund the property tax change. However, makeup income has to come from somewhere, and given the substantial hurdles of a multifunding solution, a single tax increase is a potential solution.
According to the Florida Policy Institute, Florida would have to double the current sales tax, which sits at 6% at the state level. Depending on how much you spend in a given year, a 12% sales tax could result in you paying more for public services.
Will Florida Eliminate Property Taxes?
This proposal is something the state is taking seriously, says Hollander. However, before moving forward, lawmakers must determine viable funding solutions and assess economic impact.
DeSantis is term-limited and will not be able to seek re-election in 2026, so there is always a chance this idea fizzles after he leaves office. However, if a joint bill is proposed and passes a supermajority before the 2026 election cycle, it could appear on the 2026 ballot. Any vote on eliminating or changing property tax law would require a 60% majority vote by registered Florida voters. Nonetheless, it is a serious topic Florida residents should pay attention to as it progresses.
Shared from April 14, 2025 U.S. News & World Report Article by Liz Brumer-Smith Reviewed by Liisa Rajala Edited by Dawn Bradbury
Disclaimer: Professor Real Estate® written materials apply generally to real estate subjects and are not intended to apply to specific legal issues.
2025 ~ All rights reserved. ~ Professor Real Estate® Suzanne Hollander
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