Retirees have flocked to Florida for many generations. Now, it has become an even more attractive place to spend your golden years.
In the November election, Florida voters passed Amendment No. 5, which adds an inflation adjustment to the Sunshine State’s existing homestead exemption, a property tax break for primary homes. The change took effect Jan. 1, 2025.
Florida is one of several states that recently enacted such a measure, as we detail in “7 States With New Property Tax Breaks in 2025.”
Prior to 2025, Florida’s homestead exemption gave eligible homeowners a pair of $25,000 exemptions that knocked up to $50,000 off a primary home’s taxable value. Now, the second of the two $25,000 exemptions is indexed to the Consumer Price Index, which is one of the federal government’s measures of inflation.
So, much like how Social Security payments get a cost-of-living adjustment, or COLA, each year to help counteract the effect of inflation, $25,000 of Florida’s homestead exemption will be adjusted annually to reflect inflation. In other words, as inflation rises, the $25,000 amount will rise.
The amendment secured the 60% of votes it needed to pass, with 66% of Florida voters supporting it. Had it failed, the homestead exemption amount would have remained as is, meaning property taxes would have continued rising as property values rise.
So, the passage of the amendment is likely to result in lower property tax bills for Florida homeowners than otherwise would have been the case.
However, opponents of the amendment say it will hurt landlords, who do not qualify for the exemption. (Again, Florida’s homestead exemption is specifically for primary homes, so a property must be a person’s permanent residence to qualify for the exemption.)
Those opposed to Amendment No. 5 also voiced concerns that counties and cities might need to hike local tax rates to compensate for revenue lost as a result of the measure.
When a homeowner pays property taxes, the amount is typically divvied up among multiple local governments. These can include the county and the city or town that a homeowner lives in, as well as a homeowner’s local governmental utilities, school district, and law enforcement and fire departments, among others.
Amendment No. 5 contains an exception for school districts, ensuring that they will not lose out on future property tax revenue as a result of the measure. But it does not contain exceptions for any other types of local government. So, counties and cities, for example, technically stand to lose out on property tax revenue as a result of the amendment.
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