Florida voters approved Amendment 3 on November 3, 2026, creating new property tax benefits for permanent residents, second-home owners, and real estate investors. The changes take effect January 1, 2027, but an important residency deadline is approaching for anyone considering making Florida their permanent home.
The amendment makes two major changes to Florida property taxes:
- Larger homestead exemptions: The exemption for qualifying primary residences increases to $150,000 in 2027 and $250,000 in 2028 for non-school property taxes, with inflation adjustments beginning in 2029.
- Lower assessment caps: The maximum annual increase in assessed value for qualifying non-homestead properties drops from 10% to 5% for non-school property taxes.
Three Ways Florida Property Owners and Buyers Benefit
1. Already Own a Florida Second Home? Consider Establishing Residency Before December 31
Many South Florida homeowners maintain permanent residences in other states while spending winters or vacations at their Florida properties. If you’ve been considering making Florida your permanent home, establishing residency by December 31, 2026, could allow you to qualify for the expanded homestead exemption without the five-year waiting period that applies to new residents beginning in 2027.
For example, someone who owns a condominium in Fort Lauderdale but currently resides in New York could convert that property into their permanent residence before year-end. To qualify for the 2027 homestead exemption, the owner generally must own and occupy the property as their permanent residence on January 1, 2027, and apply by March 1, 2027.
The change must be genuine. Simply owning a home in Florida, obtaining a Florida driver’s license, or changing a mailing address does not automatically establish permanent residency.
2. Planning to Move to Florida? You May Not Need to Buy Before Year-End
People considering relocating to Florida have another opportunity under Amendment 3. You can establish permanent Florida residency by December 31, 2026, without necessarily purchasing a home before that date.
For example, a family relocating from New Jersey could move into a Florida rental property before the end of 2026, establish permanent residency, and purchase a home in 2027. Under the amendment, people who establish permanent Florida residency by December 31, 2026, can qualify for the expanded homestead exemption when they establish a qualifying Florida homestead, even if they purchase their home later.
Someone who first establishes Florida residency in 2027 would generally receive the smaller existing exemption initially and become eligible for the expanded exemption beginning in their fifth year of qualifying for homestead. For prospective buyers, the important distinction is that the December 31 deadline applies to establishing permanent residency, not necessarily completing a real estate purchase.
3. Own or Plan to Buy a Second Home, Investment Property, or Commercial Property? You Benefit Too!
Amendment 3 isn’t just for permanent Florida residents. Owners of second homes, rental properties, and commercial real estate can also benefit from the amendment, even if they have no plans to establish Florida residency.
Beginning in 2027, the annual cap on increases in assessed value for qualifying non-homestead properties decreases from 10% to 5% for non-school property taxes. This applies to many types of property, including vacation homes, investment condos, residential rental properties, office buildings, and other commercial real estate.
The lower cap can help protect property owners against substantial increases in assessed value over time, particularly in markets where property values are rising. Unlike the expanded homestead exemption, there is no December 31, 2026, residency deadline to qualify for the lower assessment cap. The change applies to qualifying non-homestead properties beginning in 2027.
One important consideration for buyers: purchasing a property generally triggers reassessment at its current just value. The lower cap limits subsequent annual assessment increases; it does not prevent reassessment upon a change in ownership. School district taxes are also excluded from this 5% limitation.
What Should Property Owners Do Before the End of 2026?
For anyone considering establishing Florida residency, December 31, 2026, is an important date. Establishing residency generally involves making Florida your genuine permanent home, supported by documentation such as a Florida driver’s license, voter registration, Declaration of Domicile, and other records.
For second-home owners and investors who plan to maintain permanent residency elsewhere, there’s no need to relocate to benefit from the lower non-homestead assessment cap. Whether you’re considering turning your Florida vacation home into your primary residence, relocating to South Florida, or purchasing a second home or investment property, Amendment 3 introduces property tax changes worth taking advantage of.
At By The Sea Realty, we help buyers, homeowners, and investors throughout Fort Lauderdale and South Florida’s coastal communities navigate their real estate options.
Important: Amendment 3’s November 3 election results remain subject to official certification. Residency, homestead eligibility, assessment limitations, and actual property tax savings depend on individual circumstances and applicable law. Consult your county property appraiser and a qualified tax professional before making residency or property ownership decisions.
