Published by U.S. News & World Report | April 14, 2025
Gov. DeSantis’ proposal to eliminate Florida’s property taxes would have a big impact on homeowners, residents and businesses.
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.
