How DeSantis’ Property Tax Proposal Could Reshape Florida’s Real Estate Market

Florida has long been known as a state with no income tax — a compelling draw for businesses, retirees, and out-of-state buyers. Now, Governor Ron DeSantis is pushing a proposal that could take Florida’s tax advantage even further by reducing or eliminating property taxes on primary residences, a move that would be unprecedented in the United States. 

But while this policy pitch is gaining attention for its potential tax relief, its effects on the real estate market are complex and far-reaching. Here’s what homeowners, buyers, investors, and industry professionals need to know.

What the Proposal Actually Entails

At its core, DeSantis’ proposal aims to:

1. Cut property taxes on homesteaded primary residences, potentially eliminating them over time; and
   
   
2. Provide near-term relief such as a one-time, state-funded $1,000 rebate for qualifying homeowners. 
   
   

To fully abolish property taxes on homesteads, a constitutional amendment approved by 60% of voters would be required, likely in the November 2026 election.

Why Property Taxes Matter to Real Estate

Property taxes are a major cost of owning real estate — and they’re a key source of revenue for local governments. In Florida, taxes on real property account for tens of billions of dollars annually, supporting schools, public safety, infrastructure, and more. 

Reducing or eliminating those taxes doesn’t just impact homeowners’ bills — it alters the financing landscape, property valuations, and the broader housing market dynamics.

Potential Impacts on Home Prices

Economists and real estate analysts have weighed in on the potential market effects:

🏠 Higher Home Values
Removing or reducing an ongoing cost like property taxes makes owning a home more attractive on a pure cost-basis. Independent analysis suggests that, should property taxes be eliminated on homesteads, Florida home prices could increase by approximately 7–9% almost immediately. 

In dollar terms, that could translate to tens of thousands of dollars added to median home prices across popular regions — a win for existing homeowners but a challenge for buyers. 

📈 Greater Wealth for Current Owners
For existing homeowners, increased property values mean more equity and stronger balance sheets — a major plus in any market.

Affordability & Market Access Challenges

While higher values sound positive on paper, they come with trade-offs:

🚪 Harder for First-Time Buyers
As prices rise, entry into the market becomes more expensive — the very problem the policy aims to alleviate for homeowners could make homeownership less affordable for those trying to get in. 


📊 Renters May Not Benefit
Renters — who don’t own property and thus wouldn’t directly receive tax cuts — could see landlords push higher rents if property tax burdens simply shift to other revenue streams like fees or increased rents.

Local Government Budgets & Service Funding

Property taxes are a core revenue source for local services. Eliminating them would force a funding rethink for:

• Public schools
  
  
• Police and fire departments
  
  
• Roads and infrastructure
  
  
• Parks and community services
  💡 Unless replacement revenue streams — such as higher sales taxes or new local fees — are created, public services could face cuts
  
  

Some policy analysts estimate annual revenue shortfalls in the billions if property taxes are substantially reduced, prompting debate about how local governments would adapt.

Investor & Market Strategy Considerations

From an investor’s perspective, this proposal presents both opportunities and risks:

✅ Upside in Primary Residence Markets
If taxes on homesteaded homes drop, markets with high owner occupation could see strong price appreciation.

⚠️ Uncertainty in Rental & Commercial Segments
Non-homestead properties — such as rentals, investment properties, and commercial real estate — may face a disproportionate share of future tax burdens if homesteads are largely exempted.

This could affect rental yields, operating costs, and overall investment returns.

Bottom Line: Potential Game Changer With Complex Outcomes

Gov. DeSantis’ property tax proposal strikes at the heart of one of the most fundamental costs of homeownership. If enacted, it would not just change tax bills, but could reshape Florida’s real estate market, impacting pricing dynamics, affordability, investment strategies, and public services.

The proposal carries clear benefits for current homeowners and could strengthen Florida’s reputation as a low-tax haven. But it also raises difficult questions about equity, housing access, and fiscal stability — making it essential reading for anyone vested in Florida real estate today.