Florida Amendment 3: What individuals, businesses, and investors need to know about proposed changes to the state’s homestead exemption

Florida voters will decide Amendment 3 on November 3, 2026. For business owners and investors, the effects could extend well beyond the homestead savings.

Key takeaways

• Amendment 3 is a proposed change to the Florida Constitution that would alter how residential and commercial property is taxed. The Florida Legislature passed it as CS/HJR 1F during a June 2026 special session and it will appear on the November 3, 2026 general election ballot under the title “Increased Homestead Exemption; Lower Cap on Increases in Non-Homestead Property Assessments.” Like any amendment to the Florida Constitution, it needs approval from at least 60% of voters. If approved, it will take effect January 1, 2027.
• If passed, Amendment 3 will raise Florida’s homestead exemption for non-school taxes to $150,000 in 2027 and $250,000 in 2028. It will also lower the annual assessment cap on non-homestead property from 10% to 5%.
• The homestead savings are a fixed dollar amount. Owners of high-value homes save no more than owners of homes assessed just above the exemption.
• Second homes, rentals and commercial property get no exemption. The lower cap slows assessment growth, but local governments may raise millage rates to replace lost revenue.
• A lower cap can make the reassessment after a sale or change of control larger, which matters for business sales and private equity transactions.
• Anyone who becomes a Florida resident after December 31, 2026 will have to wait until their fifth year of residency to become eligible for the full exemption.
• Anyone accelerating a move to Florida should weigh income tax audit risk in their former state, since a rushed homestead application could create more income tax exposure than it saves in property tax.

What is Amendment 3 and what will change if it passes?

Amendment 3 is a proposed change to the Florida Constitution that would alter how residential and commercial property is taxed. If passed, Amendment 3 will raise Florida’s homestead exemption for non-school taxes to $150,000 in 2027 and $250,000 in 2028 with annual inflation adjustments after that. It will also lower the annual assessment cap on non-homestead property from 10% to 5%. Individuals who did not maintain a permanent residence in Florida as of December 31, 2026 would receive a smaller exemption until their fifth year of residency. The amendment would also limit what counties and municipalities can spend property tax revenue on.

Much of the public discussion so far has focused on how much homeowners could save and how much tax revenue counties and municipalities will lose under the proposed changes. But for many business owners and investors, the amendment has additional important implications.

Florida property tax: current law compared with Amendment 3

Sources: enrolled CS/HJR 1F; Pinellas County Property Appraiser.

How much will homeowners save under Amendment 3?

Homestead savings depend on local millage rates, and they stop growing once a home’s assessed value passes the exemption amount. The exemption removes a fixed dollar amount from assessed value, so above that amount the savings stay the same. A home assessed at $4 million would save the same dollar amount as one assessed at $400,000.

For example, the Pinellas County Property Appraiser estimates savings of about $2,423 a year in 2028 for a home receiving the full exemption, based on that county’s average non-school millage rate. School taxes would still apply. These savings are real, but for many of Kaufman Rossin’s clients they aren’t the most important part of the proposed changes.

How will Amendment 3 affect second homes, rentals and commercial property?

Second homes, rental property and commercial buildings will not receive the homestead exemption. For this class of property, the only change is a lower cap on annual assessment increases, from 10% to 5%, for non-school taxes. That includes commercial buildings a business owns or leases. The cap will limit how fast assessed value can grow, but it’s important to keep in mind that tax rates are set separately each year by local governments and school taxes will continue to be levied on full market value.

The state’s Revenue Estimating Conference projects that the amendment will reduce local non-school property tax revenue by about $4.95 billion in fiscal year 2027-28. Once the amendment is fully phased in, the estimate rises to about $11.86 billion a year. Kaufman Rossin expects local governments will need to make up some of that revenue. The Tax Foundation has pointed to higher millage rates on property that remains taxable as one likely response. Businesses with leases that pass property taxes through to tenants will feel any rate increase directly.

Whether the lower cap offsets higher millage rates will depend on the county the property is in and on budget decisions local governments have not yet made. In the meantime, owners of non-homestead property shouldn’t assume a net saving.

How does Amendment 3 affect a sale or change of control of Florida property?

Amendment 3 keeps Florida’s rule that non-homestead property is reassessed at full market value after a change of ownership or control. Under Florida Statute Sections 193.1554 and 193.1555, the reassessment happens on January 1 following the change. A change of control includes a cumulative transfer of more than 50% of the entity that owns the property.

A reset can be costly even under today’s 10% cap. In a case we wrote about in 2023, S and A Property Investment Services, LLC v. Garcia, a married couple transferred non-homestead residential property to their own LLC. The Miami-Dade Property Appraiser reassessed the property at just value, which was more than double the prior year’s assessed value, and the court upheld the increase.

The lower cap is good news for owners. In any year that market values rise more than 5%, the lower cap keeps the assessed value, and the tax bill, from rising as fast. But that benefit only lasts until the property is sold. When the property, or a controlling interest in the company that holds it, changes hands, the property is reassessed at full market value and the savings built up under the cap go away. The more an owner has saved under the cap, the bigger the jump in the new owner’s tax bill. Buyers should model the post-closing property tax during due diligence, and sellers should expect them to.

Owners must also notify the property appraiser of any change of ownership or control that isn’t recorded by deed. Failure to do so can result in a lien for the back taxes, plus interest of 15% per year and a penalty of 50% of the taxes avoided.

When will new and part-time Florida residents qualify for the full exemption?

New residents qualify for the full exemption in their fifth year of residency on a homesteaded property, but part-time residents with a second home in Florida won’t qualify at all. The larger exemption depends on maintaining permanent residency in Florida as of December 31, 2026. Individuals who don’t meet this criteria receive a $50,000 non-school exemption, adjusted for inflation beginning in 2028, until the fifth year. Part-time residents with a second home in Florida receive no homestead exemption under current law, and the amendment won’t change that.

Individuals considering an accelerated move to meet the December 31 date should also weigh the income tax consequences. Declaring Florida as a permanent residence is a claim a former home state can challenge. New York, for example, evaluates five primary factors in a residency audit: home, active business involvement, time, items “near and dear,” and family connections. A Florida driver’s license and voter registration are helpful, but they don’t settle the question on their own. If the facts haven’t caught up with the filing, a rushed homestead application could create more income tax exposure than it saves in property tax.

The official ballot summary also states that the new-resident rule applies “to the extent permitted by the U.S. Constitution.” Anyone planning around the rule should factor in that qualifier.

What should Florida property owners do before November 3?

Regardless of the outcome, property owners should review their non-homestead Florida holdings and identify any that may change hands in the next few years. Individuals who have moved to Florida, or plan to, should make sure their residency documentation is complete and consistent. If the amendment passes, the Legislature will need to adopt implementing legislation, and the details could change. Kaufman Rossin’s tax professionals continue to monitor Amendment 3 and its implementation. If you have questions about how it may affect you or your business, contact me or another member of our State and Local Tax team.

Ken Rios, JD, is a Tax Principal and the leader of the State and Local Tax practice at Kaufman Rossin, one of the Top 50 CPA and advisory firms in the U.S.