Florida voters have approved Amendment 3, significantly expanding the state’s homestead tax exemption beginning in 2027. While the amendment increases tax benefits for Florida homeowners, it also creates a significant distinction between existing Florida residents and those who establish Florida residency after December 31, 2026.
This distinction presents an important planning consideration for anyone considering a move to Florida, because the timing of establishing Florida residency may affect eligibility for enhanced homestead tax benefits in the future.
Current Homestead Benefits Through December 31, 2026
Currently, Florida’s homestead exemption, as it applies to homeowners’ property taxes, generally consists of:
- A $25,000 exemption applicable to all ad valorem property taxes
- An additional $25,000 exemption applicable to certain non-school property taxes
- The “Save Our Homes” limitation, which generally caps annual increases in a home’s assessed value at the lesser of 3 percent or the Consumer Price Index
These benefits have long made Florida an attractive destination for retirees, business owners, investors, and other individuals seeking both favorable tax treatment and long-term property tax stability.
What Changes Are Coming in 2027 Under Amendment 3?
The new amendment leaves the existing $25,000 ad valorem exemption unchanged but substantially increases the additional exemption available for non-school taxes. Beginning in 2027, the non-school tax exemption will increase from $25,000 to $150,000. In 2028, the exemption will increase further to $250,000 and will thereafter be indexed annually for inflation beginning in 2029.
As a result, qualifying Florida homeowners may eventually receive up to:
- A $25,000 exemption applicable to all property taxes
- A $250,000 exemption, indexed annually for inflation, applicable to non-school property taxes
The Five-Year Waiting Period for New Florida Residents
Perhaps the most significant aspect of the amendment is a new residency-based limitation. Individuals who establish Florida residency after December 31, 2026, will generally be limited to the current exemption structure, totaling $50,000, for their first five years of Florida residency. Only after satisfying the five-year residency requirement will they become eligible for the enhanced exemption amounts enacted by Amendment 3.
In contrast, individuals who establish Florida residency and obtain homestead status on or before December 31, 2026, will generally be eligible to benefit from the expanded exemption immediately when it becomes available.
Why This Matters for Residency Planning
The amendment creates a new incentive for individuals who are already contemplating a move to Florida. Those who expect to relocate in the near future may wish to evaluate whether establishing Florida domicile before the end of 2026 makes sense in light of the expanded exemption.
These considerations may be particularly relevant for:
- Individuals maintaining homes in both Florida and another state
- “Snowbirds” who spend substantial time in Florida but have not formally changed domicile
- Retirees planning to relocate within the next several years
- High-net-worth individuals seeking to establish Florida residency for tax and estate planning purposes
- Owners of Florida residences who have not yet applied for a homestead exemption
Establishing Florida Residency Requires More Than Owning a Florida Home
It’s important to remember that simply purchasing a residence in Florida does not automatically establish Florida domicile or qualify an individual for homestead benefits. Florida residency and domicile determinations typically involve a fact-specific analysis that may include:
- Demonstrating an intent to make Florida a permanent home, including spending a substantial amount of time in Florida
- Relocating “near and dear” items to Florida
- Claiming Florida as the individual’s primary residence
- Filing a Declaration of Domicile
- Obtaining a Florida driver’s license
- Registering vehicles in Florida
- Registering to vote in Florida
- Updating estate-planning documents and official records
Individuals seeking to change domicile should take a coordinated approach, particularly if they are leaving a state with an income tax, estate tax, or an aggressive residency audit program, like New York. Our attorneys regularly assist clients with change of domicile and provide a comprehensive Florida residency checklist [EK1.1]designed to help New York residents establish and document a successful change of domicile to Florida.
How Barclay Damon Can Help
The passage of Amendment 3 does not necessarily mean that individuals should rush to change residency immediately. However, establishing Florida residency and qualifying for homestead status before December 31, 2026, may help individuals avoid a five-year delay in eligibility for the enhanced homestead exemption. Individuals who wait until after that date generally will not lose access to Florida’s existing homestead protections, but they may need to wait several years before receiving the full benefit of the expanded exemption.
Our Trusts & Estates Practice Area attorneys regularly advise individuals and families regarding Florida domicile planning, homestead exemption qualification, residency audits, and related estate and tax planning matters. If you are considering a move to Florida or would like to evaluate whether your current residency position is consistent with your estate planning goals, please contact Kaitlynn Chopra, associate, at kchopra@barclaydamon.com; or Rachelle Nuhfer, partner, at rnuhfer@barclaydamon.com.