Read Newsweek’s interview of Suzanne Hollander Professor Real Estate® about her views on the elimination of Property Tax in Florida. 

Governor Ron DeSantis‘ proposal to eliminate property taxes in Florida could have huge consequences for the state’s housing market, experts told Newsweek, potentially boosting homeowners’ wealth while slashing aspiring homebuyers’ chances to get on the property ladder.

Why It Matters

Florida is among several GOP-led states that are currently trying to drastically reduce, reform, or even abolish property taxes to offer relief to homeowners struggling with rising housing costs. While the proposal has not yet fully been planned out, DeSantis said he is supportive of eliminating property taxes in the Sunshine State, an action that would require in the end a constitutional amendment approved by 60 percent of voters. What To Know While several states are actively considering abolishing their property taxes, every state currently has one, “so there are no test cases that show the true cost of elimination,” Manish Bhatt, senior policy analyst at the Tax Foundation, told Newsweek. “However, where voters were given a choice, they opted to keep the tax, perhaps realizing that the dangers of elimination were not properly considered,” the analyst said, referring to previous attempts in other states that have failed to eliminate property taxes. In 2024, a proposal to eliminate all property and income taxes in Nebraska, including the inheritance tax, failed to make the ballot. However, Florida lawmakers seem determined to offer homeowners in the state some kind of property tax relief as soon as possible. Earlier this year, DeSantis described property taxes as “the most oppressive and ineffective form of taxation,” saying that paying them is “basically” the same as “paying rent to the government to live on your own property.” Bhatt is skeptical of this concept. “Proponents of property tax elimination often cite fairness as a primary motivation. It is commonplace to hear the refrain ‘paying a property tax is akin to renting your property from the government,'” he said. “While this may generate strong sentiments, it is not an accurate assessment of the property tax or its function. The tax is not rent; it is payment for the local services received,” he said. “When structured well, the property tax is a good tax, and for that reason it merits reform not wholesale elimination.”

A Risky Move for Less Wealthy Florida Homeowners

The Sunshine State does not have an official plan yet of how it would go about eliminating taxes or how local governments would replace lost revenues—but experts have been thinking about how this could actually work. The Florida Policy Institute (FPI) told Newsweek it had not yet analyzed the potential impact of eliminating property taxes on the state’s housing market. However, it recently published a report that warned policymakers that, should they pursue eliminating property taxes without “a cohesive plan to raise taxes in a progressive manner,” households with low to moderate incomes would “end up paying more in taxes, as a percentage of their earnings, compared to wealthy residents if sales taxes increase to make up the lost revenue.” On top of that, homeowners who currently claim a property tax deduction in their federal income tax returns would lose the deduction, which means that their personal income taxes could potentially increase. Bhatt thinks that eliminating the property tax could represent “a significant transfer of wealth to existing homeowners whose houses would be worth more now that they do not bear tax liability, whereas future buyers would have to pay prices reflecting that fact.” Moreover, because the property tax better aligns with local benefits, it produces outcomes that are likely to be more favorable to the housing market than a replacement tax would be, Bhatt said. “For these reasons, Florida lawmakers would do well to reconsider the property tax elimination effort and instead seek strong levy limits which constrain the growth in local property tax revenue, adjusting for inflation and population growth,” Bhatt said. “Pairing this with narrowly tailored circuit breakers helps protect low- and fixed-income residents from being taxed out of their homes.”

Protecting the ‘American Dream’

Professor Suzanne Hollander, an attorney teaching real estate law and property rights in Miami at Florida International University, is more optimistic about the impact of eliminating property taxes. “In my opinion, efforts to protect and preserve the American Dream of Homeownership are the foundation for this trend [of growing interest toward eliminating property taxes],” she told Newsweek.