Florida voters approved Amendment 3 on November 3, 2026. Effective January 1, 2027, the measure lowers the annual assessment-growth limit for qualifying non-homestead property from 10% to 5%. It also expands the homestead exemption for eligible permanent residents. The changes do not affect 2026 property tax bills. Leon County Property Appraiser
For South Florida rental owners, multifamily investors and second-home buyers, the key distinction is straightforward: a 5% assessment cap is not a 5% cap on the total tax bill.
The investment question is how the lower limit interacts with an acquisition, existing assessment benefits, improvements and local tax rates.
What the 5% non-homestead assessment cap actually changes
Beginning in 2027, the lower limit applies to annual increases in assessed value for eligible non-homestead property, including rental homes, second homes and qualifying commercial property. It applies to non-school levies. School taxes remain outside this assessment limitation. Seminole County Property Appraiser
The potential benefit is slower growth in part of the property's tax base over an extended holding period. It does not guarantee lower taxes, stable net operating income or a particular refinancing outcome. Millage rates, school taxes and non-ad valorem assessments still affect the amount payable. Leon County Property Appraiser
How the difference can compound
Consider an illustrative property with a starting non-school assessed value of $1 million:
- Starting assessment: $1,000,000 under either limit.
- After one annual increase: $1,050,000 at 5%; $1,100,000 at the former 10%.
- After five annual increases: $1,276,282 at 5%; $1,610,510 at the former 10%.
Author calculations: $1,000,000 × 1.05ⁿ and $1,000,000 × 1.10ⁿ, rounded to the nearest dollar. This comparison assumes just value supports every maximum increase, uninterrupted eligibility, and no ownership reset or improvement adjustment. The 10% scenario is a hypothetical comparison with the former limit, not a second option available to owners.
The difference after five increases is approximately $334,228 in assessed value. That is not a dollar amount of tax savings. Actual taxes require the applicable taxable values and millage rates.
The acquisition risk: inheriting the seller's tax assumptions
An existing owner's capped assessment can materially understate a buyer's future tax base.
Under Florida's existing reassessment rules, a qualifying change of ownership or control generally resets a non-homestead property's assessment to just value on January 1 of the following year, subject to statutory exceptions. Buying interests in the property-owning entity can also trigger reassessment: the rules address cumulative transfers of control or more than 50% of entity ownership. A recorded deed is not the only possible trigger. Florida Statutes §193.1554 and §193.1555
For underwriting, estimate the first tax year following acquisition, then model later years separately. Use the county property appraiser's buyer estimator where available, the anticipated post-transfer just value, parcel-specific millages and applicable assessments. Purchase price can inform the estimate; it is not an automatic determination of assessed value.
For a December 2026 purchase, the relevant January 1 follows almost immediately. For a 2027 purchase, it falls in 2028. A generic “Year 2” label can obscure that timing.
Owners must promptly notify the property appraiser of qualifying ownership or control changes; recording the relevant deed or instrument serves as notice. Failure to report can expose improperly retained benefits to back taxes, interest, penalties and liens. Florida Statutes §193.1556
Renovations can change more than the improvement's assessment
Florida law distinguishes property categories. For non-homestead residential property with nine or fewer units, additions and improvements generally enter the assessment at just value on the first January 1 after substantial completion, subject to exceptions. Florida Statutes §193.1554
For property assessed under §193.1555, including many larger multifamily and commercial assets, a qualifying improvement that increases the property's just value by at least 25% can trigger reassessment of the property itself to just value the following January 1. Repairs, replacements and specified reconstruction circumstances receive different treatment. Florida Statutes §193.1555
Value-add investors should have their renovation scope reviewed before assuming the existing assessment benefit will survive the project.
Homestead changes: relevant to relocation, not every investment purchase
For qualifying homesteads, the new non-school exemption is up to $150,000 in 2027 and $250,000 in 2028, with positive inflation adjustments beginning in 2029. The school-tax exemption remains up to $25,000. These are exemptions from assessed value, not tax credits. Enrolled CS/HJR 1F, Article VII, Section 6
Owners who were not permanent Florida residents by December 31, 2026, face a different initial structure: up to $50,000 for non-school taxes, adjusted for inflation beginning in 2028. The larger exemption begins with the fifth year of homestead exemption, subject to constitutional and implementation requirements. Simply spending five calendar years in Florida is not the stated test. Seminole County Property Appraiser
Purchasing by December 31 does not, by itself, establish permanent residency or homestead eligibility. Owners planning a move should confirm their circumstances with the property appraiser and counsel. An investment or second-home purchase does not automatically qualify for homestead benefits.
Local rates and assessments still matter
The revised millage voting rules come from separate legislation, Chapter 2026-240, rather than Amendment 3 itself. That law took effect June 24, 2026. It generally uses a rolled-back-rate framework, with a two-thirds vote for certain increases up to 110% of the applicable baseline. Higher rates can require unanimity, a three-fourths vote for governing bodies with nine or more members, or a referendum. Additional exceptions apply. Chapter 2026-240, Sections 2 and 9
Do not assume either automatic rate increases or permanently frozen rates. Underwrite the property's actual taxing districts and review non-ad valorem charges separately. Forecasting tax savings before future rates and implementation details are settled would be premature. Leon County Property Appraiser
What South Florida investors should do now
- Separate the tax components. Identify just value, capped assessed value, exemptions, school taxes and non-ad valorem assessments for each holding.
- Rebuild acquisition assumptions. Compare the seller's current bill with an estimated post-transfer bill and stress-test local rates.
- Review ownership and renovation plans. Have counsel and the property appraiser examine potential reassessment triggers before restructuring or committing to major work.
- Compare holding and selling on net proceeds. Include operating costs, capital needs, transaction expenses and your tax adviser's analysis. The assessment cap alone is not a reason to sell, refinance or undertake a 1031 exchange.
Request a private property strategy review
A sound listing strategy starts with understanding the asset: its operating profile, likely buyer questions, competing inventory and the owner's timing.
Carlos Uzcategui has been licensed in Florida since 2001 and is affiliated with United Realty Group. We help South Florida owners evaluate positioning and plan buyer-agent outreach, with bilingual coordination for clients and referral partners in Spain and Latin America.
Request a Private Property Strategy Call on WhatsApp or email contact@carlosre.com. Share the property address, current use and anticipated timing. We will clarify your objectives, identify the information needed and outline the next step for a property-specific review, coordinating with your tax and legal advisers where appropriate.
Carlos Uzcategui Certified Luxury Home Marketing Specialist · Certified Seller Representative United Realty Group — Weston Office 15951 SW 41st Street, Suite 700, Weston, FL 33331 HomesProfessional.com · contact@carlosre.com · WhatsApp / Direct: +1 954-865-6622
Reviewed November 10, 2026. Some administrative details remain subject to implementing legislation and state guidance. This article provides general information, not legal, tax or investment advice. Confirm parcel-specific treatment with the county property appraiser and qualified advisers.
Florida Licensed Realtor® SL705771 · United Realty Group · Equal Housing Opportunity.