Florida is leading a multistate revolt to lower property taxes, another aspect of the growing divide between older homeowners and young homebuyers.
Voters in Florida, Oklahoma, North Carolina, Wyoming, and other states will all vote on ballot measures in the midterm elections that would lower property tax burdens for homeowners. Proponents argue that such initiatives would provide much-needed relief for taxpayers who have seen the value of their homes explode in recent years, while critics contend that the reduced revenue will have to be shouldered by taxpayers in other ways or that crucial spending would have to be cut.
“We are in the midst of a new property tax revolt in states across the country,” Jared Walczak, vice president of state projects at the Tax Foundation, told the Washington Examiner.
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Amendment 3 in Florida would significantly increase the state’s homestead exemption from $50,000 to $150,000 in 2027 and then to $250,000 in 2028.
Homeowners have seen their homes’ assessed value increase since the pandemic, leading to much higher tax bills.
“Homeowners have been clamoring for property tax relief, and they have some good reason for this,” Walczak said. “Asset values have risen dramatically in the past six years, and if the rates have not been reduced in response to that, then they’re paying dramatically more on the same property.”
Critics, though, point out that property tax reductions would crimp revenues, and communities would need to fill that gap by cutting spending or by increasing other taxes or rates.
And, while property tax breaks would provide relief to homeowners, they would raise home prices, pushing ownership further out of reach for would-be homebuyers, who have already seen the monthly payment for a typical home roughly double since the pandemic, thanks to higher mortgage rates coupled with the steeper prices.
Florida’s would be the most dramatic of the ballot initiatives, especially because the Sunshine State already has the “Save Our Homes” amendment to the Florida Constitution, which makes it so that the assessed value of someone’s homestead property can increase by no more than 3% above the previous year’s assessed value.
For instance, if a young homebuyer purchases a home for $600,000 in Florida this year, he or she will end up having to pay property taxes on $600,000 worth of that property. But if a homebuyer had bought that same property back in 1995, he or she is more likely to face an assessed value of about $225,000, given how much cheaper homes were back then and the 3% cap in Florida, Walczak told the Washington Examiner during a separate interview back in August.
Amendment 3 would add a $250,000 homestead exemption on top of that.
“So houses that are quite large and well above average prices in Florida could well be fully exempt from non-school property taxes under this measure,” Walczak said.
Notably, Walczak said that if Amendment 3 passed — which it would need a 60% vote to do — it would result in an estimated $8.7 billion annual reduction in tax collections by fiscal 2029. For reference, the budget for the entire state of Florida was $117.6 billion in 2026.
Counties and municipalities affected by the lower tax base, if the measure is approved, could respond by reducing spending, increasing the property tax rate on the property that remains within the tax base, or increasing fees.
“Most likely, they’re going to do some combination of the three, where there’ll be some spending reductions, belt-tightening, also some higher fees, and maybe some higher property tax rates on what remains,” Walczak said.
The revolt across the country
Ryan Young, a senior economist at the Competitive Enterprise Institute, emphasized just how much property values have gone up in recent years in the context of this property tax revolt.
“Because housing prices go up faster than inflation consistently over time, every once in a while states are just going to have to lower property tax rates, whether it’s the percentage rate or something like Florida is doing with changing how they do exemptions,” he told the Washington Examiner.
And the increase in home costs has been dramatic, contributing to what some describe as a housing crisis in the country. In the first quarter of 2000, the median sales price of a new home was just over $165,000. The corresponding number is $410,700 this year — a 149% increase. That’s compared to a 97% increase in the overall price level during that same period.
In Wyoming, Initiative 1, if passed, would exempt 50% of the assessed value of a qualified homeowner’s main residence from property taxes.
In Oklahoma, the state will vote on whether to limit annual growth in taxable value from 3% for homesteads to 1.75%.
In North Carolina, voters will decide whether to amend the state constitution to require the legislature to pass laws limiting the amount that property taxes can increase, and in Tennessee, voters will face a question on whether to ban the legislature from imposing a state property tax altogether.
Intergenerational warfare
Some critics frame the revolt as part of a broader clash between generations.
Property tax reductions drive up housing prices. That is because a house subject to lower property taxes is more affordable at a higher price point. So, for example, a family that could afford only a $500,000 house with $3,500 in annual property taxes might be able to afford a $525,000 house if the taxes are halved.
That’s a problem for people who are looking to break into the market and need to save up for a down payment.
In a recent example of research on this topic, a study by economists at New York University and Baruch College, released in August, found that lower property taxes tend to discourage older homeowners from selling and limit access to housing for younger families. But higher property taxes can cause older homeowners to sell, thereby decreasing home prices for young prospective buyers.
Alex Brill, a senior fellow at the American Enterprise Institute, said that, logically speaking, higher property taxes could cause older people to sell their homes and downsize, thus increasing market supply and lowering home prices for younger people.
“The same thing would be true if you had a baseball card collection, and we imposed a tax on holding baseball cards and old people had baseball card collections — they would all sell their baseball cards, and the prices would collapse, and young people might be more willing to buy baseball cards,” Brill told the Washington Examiner last month.
PROPERTY TAXES ARE ANOTHER FRONT IN THE GENERATIONAL HOUSING DIVIDE
The latest effort by Florida on property taxes, if it passes, could be a harbinger for even more states pushing for lower property taxes in the coming years. Especially in the sense of how that $8.7 billion in reduced revenue will be handled.
“Florida’s doing an experiment, and they will see if it works for them,” Young said.