Real estate market value in Florida could fall under new law

A new bill signed by Governor Ron DeSantis on Friday could put an end to the rise in Florida’s real estate prices and reduce the property tax burden for homeowners who are currently struggling with skyrocketing housing costs, including skyrocketing insurance premiums.

House Bill 7019, signed by the Republican governor last week after previously being passed by the Republican-led state legislature, would implement an increase in Florida’s property tax exemption.

Under current law, homeowners in the Sunshine State can reduce the assessed value of their home by up to $50,000 if they use the property as their primary residence, thereby reducing their property taxes.

Newsweek emailed Governor DeSantis’ spokesman for comment Wednesday morning.

The bill, which will be voted on in November, would increase the tax exemption for homeowners in Florida based on inflation.

Eligible homeowners will receive an additional exemption of up to $25,000 on top of the $50,000, but the exact amount will be based on the Consumer Price Index for All Urban Consumers (CPI-U). The additional exemption will not apply to levies collected by school districts, even if the bill is approved by voters.

By tying the exemption to the Consumer Price Index (CPI-U), Florida lawmakers and DeSantis want to ensure that it remains relevant even if the cost of living suddenly increases.

According to 2023 data from ATTOM Data Solutions, Florida’s effective tax rate last year was 0.76 percent, about halfway between the highest (Illinois, 1.88 percent) and lowest (Hawaii, 0.31 percent) rates in the country. According to Zillow, the average home value in Florida at the end of May was $399,944, up 3.2 percent from a year ago.

Thus, homeowners in Florida paid an average tax of $3,039 on the average home value.

While the Sunshine State doesn’t have the highest property tax rates in the country, its homeowners already struggle with home insurance premiums that are four times higher than the national average.

It is up to Florida voters whether they agree to a larger property tax exemption that allows them to reduce their property taxes. To pass, the bill, which comes in the form of Amendment 5, must be approved by 60 percent of voters. Renters are not affected by the bill and will not see any tax cuts.

In the event that the bill passes, the Florida state government has already allocated funds to assist counties that are expected to experience significant revenue declines, NBC Miami reported.

Are you a Florida homeowner and/or voter? Let us know what you think about HB 7019 and why you would or would not support it in November at [email protected].