ORLANDO, Fla. – Six constitutional amendments will be on the ballot for Florida voters this election. Four of the amendments were proposed by the Florida Legislature, and Amendment 5 is one of them.
The amendment, if passed, would change the way some property taxes are calculated for Florida homeowners who have a homestead exemption. The amendment needs approval from 60% of Florida voters to pass.
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For people with homestead exemptions, this amendment could help lower annual property tax increases. For county governments though, it could lead to budget cuts that could affect services, and critics say it would shift the tax burden onto businesses and rental properties.
Here’s what you need to know.
[RESULTS 2024: Complete Coverage | Voter Guide for the Nov. 5 election | Here are the 6 amendments that will be on the Florida ballot in November]
Ballot language
BALLOT SUMMARY
From the Florida Division of Elections website:
Proposing an amendment to the State Constitution to require an annual adjustment for inflation to the value of current or future homestead exemptions that apply solely to levies other than school district levies and for which every person who has legal or equitable title to real estate and maintains thereon the permanent residence of the owner, or another person legally or naturally dependent upon the owner is eligible. This amendment takes effect January 1, 2025.
AMENDMENT LANGUAGE
The amendment would insert new language into the homestead exemptions section of Article VII of the Florida Constitution:
“The twenty-five thousand dollar amount of assessed valuation exempt from taxation provided in subparagraph (a)(1)b. shall be adjusted annually on January 1 of each year for inflation using the percent change in the Consumer Price Index for All Urban Consumers, U.S. City Average, all items 1967=100, or successor reports for the preceding calendar year as initially reported by the United States Department of Labor, Bureau of Labor Statistics, if such percent change is positive.
“The amount of assessed valuation exempt from taxation for which every person who has the legal or equitable title to real estate and maintains thereon the permanent residence of the owner, or another person legally or naturally dependent upon the owner, is eligible, and which applies solely to levies other than school district levies, that is added to this constitution after January 1, 2025, shall be adjusted annually on January 1 of each year for inflation using the percent change in the Consumer Price Index for All Urban Consumers, U.S. City Average, all items 1967=100, or successor reports for the preceding calendar year as initially reported by the United States Department of Labor, Bureau of Labor Statistics, if such percent change is positive, beginning the year following the effective date of such exemption.”
It would also create a new section in Article XII of the Constitution:
“Annual adjustment to homestead exemption value .— This section and the amendment to Section 6 of Article VII requiring an annual adjustment for inflation of specified homestead exemptions shall take effect January 1, 2025.”
You can read what the full language looks like by going to the resolution passed by the Florida Legislature HERE.
Breaking down the amendment
In Florida, property values are reassessed every year, as required by state law. That assessment figures into the amount of your property taxes. County and municipal governments, school districts, and special districts levy these ad valorem taxes.
Property owners get a homestead exemption on their primary residence only.
Say a house has an assessed value of $100,000. In Florida, the property is taxed like this:
- First $25,000 – tax-exempt (first exemption)
- $25,000-$50,000 – taxed
- $50,000-$75,000 - exempt from all ad valorem taxes except school taxes (second exemption)
- $75,000-$100,000 - taxed
All property value after that $100,000 would also be taxed unless you qualify for another exemption.
Florida also has a number of additional property tax exemptions, all approved by voters through constitutional amendments over the years, such as benefits for active duty military and veterans, or people 65 and older. You can learn more about property tax exemptions on the Florida Dept. of Revenue website.
What this amendment does is change the way that the second exemption is adjusted. It would now be adjusted for positive annual inflation growth based on the Consumer Price Index. This is the same index that is used to decide annual cost-of-living adjustments for things like Social Security benefits.
This means that over time, homestead property owners could see a larger exemption and greater savings on their property taxes, according to the legislative analysis of the amendment. If the CPI is up 2%, the second exemption would be the base $25,000, plus 2%.
The Florida Legislature passed the amendment on largely party lines earlier this year. Republican sponsors said they saw the amendment as a way to help with the cost of owning a home.
Democrats opposing the amendment, however, agreed with the Florida League of Cities that the amendment would further squeeze city and county budgets and could affect services like first responders or road repairs.
The Florida League of Cities has not officially taken a position against the amendment, according to a league spokesperson, but league officials did speak out against the amendment during the legislative session, asking lawmakers not to pass it.
The league told lawmakers that if it passes the changes would shift the burden away from homeowners to both businesses and rental properties, and create uncertainty from year to year since inflation shifts, along with a higher hurdle for cities and counties to recover from if there is another economic downturn.
The league said this would be especially problematic for smaller cities that don’t have a large commercial property tax base to draw from.
According to the legislative analysis mentioned before, the Florida Revenue Estimating Conference estimates that, if passed, Amendment 5 would cost local governments $22.8 million in the 2025-2026 fiscal year, which is the first year the amendment would be in effect.
However, by the 2028-2029 fiscal year, assuming tax rates stay at current levels, that amount would grow to $111.8 million.
If the amendment does not pass, nothing will change with how property taxes are assessed. It will stay the same.
Bottom line
A “YES” vote on Amendment 5 means you are in favor of changing the way homestead exemptions are assessed based on inflation growth.
A “NO” vote on Amendment 5 means you are against changing the way homestead exemptions are assessed, and want to maintain the current system.
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