FORECAST 2026: Property tax reforms and its possible impacts

For the past year, Florida leaders have discussed property tax reforms to provide financial relief to citizens. 

Gov. Ron DeSantis said he wants to reform the property tax system, arguing homeowners should not have to pay “rent” to the government for a home they already own. 

For residents, this would mean significant financial relief. It also would mean relieving pressure on homeowners so they can own their homes without fear of losing them because of unpaid property taxes. 

But while homeowners might catch a break, this reform would challenge West Orange municipalities, which rely heavily on taxes to sustain services to residents in the area. 

PROPOSED REFORMS

The state’s House Select Committee on Property Taxes has developed multiple House Joint Resolution proposals for consideration during the 2026 Legislative Session beginning Tuesday, Jan. 13. 

HJR 201 would completely eliminate non-school homestead property taxes. 

HJR 203 would fully eliminate non-school homestead property taxes over a 10-year period, with homeowners getting an additional exemption of $100,000 each year. 

HJR 205 would exempt all Florida residents ages 65 and over from having to pay property taxes. 

HJR 207 would offer a homestead exemption of 25% of the assessed value of the home. 

HJR 209 would grant homestead property owners with insurance a $100,000 exemption. 

HJR 211 would help long-term homeowners carry over their tax savings when moving with no limit, which currently is set at $500,000. 

HJR 213 would change homestead property assessments from 3% per year to 3% every three years, and from 10% per year for non-homesteaded properties to 15% every three years. 

Finally, House Bill 215 would allow married couples to combine their tax savings when buying a new homestead property and would require a two-thirds vote from the governing bodies to increase millage rates. 

The difference between them are how they become law. HJR proposals will be placed on the general election ballot and House Bills only requiring approval from the Florida House and Senate and a signature from the governor.  

IMPACTS ON STATE/COUNTY

Wichita State University conducted a study, which the Florida League of Cities commissioned, regarding the proposed homestead property tax reforms and examined the fiscal, distributional and community-level impacts it would bring to the state. 

Its findings were simple: Property taxes are indispensable. 

According to the study, property taxes remain the fiscal backbone of municipal finances, accounting for around 43% of general funds. 

“Because the state lacks an income tax, the property tax functions as the stabilizing base that offsets volatility in consumption-based revenues,” the study said. “Any reform that significantly weakens this base directly compromises municipal fiscal resilience.” 

Property taxes are used to fund public safety — police, fire and EMS operations, which accounts for more than 56% of the state’s General Fund — as well as public works and infrastructure, capital projects and more. 

This means cities, towns and counties will be left to fund public safety services without their main source of revenue, leaving many areas around the state wondering what to do, compromising community safety. 

“It would be scary,” Orange County’s District 1 Commissioner Nicole Wilson said. “Do we want to go to a volunteer fire department? I don’t.” 

If any of the proposed reforms were to pass, the county would need to find some way to continue to fund these essential services. 

“We have to make it up somewhere,” Orange County Mayor Jerry Demings said. “(In) sales taxes or in some other scheme, but there’s no way that the state of Florida can function without property taxes.”

IMPACTS ON WEST ORANGE COUNTY 

The small and cozy town of Oakland would face serious consequences if property taxes were removed. The town’s General Fund is $11 million, of which public safety accounts for nearly $5.5 million. Having no ad valorem revenue would severely cut the town’s funds and could result in staff layoffs. 

“We already operate really lean,” Mayor Shane Taylor said. “(Losing those funds) could be very detrimental to a small town like ours.” 

The town has about 3,800 residents and does not have lots of commercial spaces in it, which means increasing sales taxes wouldn’t help with the lost funds. The town most likely would have to replace that revenue by increasing non-ad valorem fees, such as fire fees and more. Taylor said. However, there could be statutory limits to that. Even aggressive cuts to discretionary items are not likely to fund the projected revenue loss. 

Worst case scenario, the town will be “dead in the water” in 10 years if the town does not allocate funds for the lost revenue, Town Manager Elise Hui said. 

“You become stagnant,” Taylor said. “How can you continue to run the town with not being able to pay for services?” 

Taylor said the issue would be to get rid of all homestead property taxes, but he is not opposed to property tax reforms. 

The city of Winter Garden has about 49,000 residents. For Fiscal Year 2026, the general fund expenditure budget totals $68.2 million, with revenues projected at $70.3 million. Fifty-seven percent — $38.6 million — of the expenditure budget goes to public safety. Public safety is followed by general government, which accounts for $9.7 million; culture and recreation, $6.1 million; physical environment, $4.5 million; inter-fund transfers, $4.4 million; and economic environment and human services, $1.7 million. 

If ad valorem revenues were removed, the city would have to rely on different methods to continue funding essential services to provide community safety. Those could include increase in sales taxes, increase in millage rates, increase in fire fees and more. The city recently increased its millage rate and proposed an increase to fire assessment fees, but after hearing the community’s feedback and continuing through the budget process with zero-based budgeting, city staff found money in the budget and decided not to move forward with the proposed increase to fire assessment fees. 

The city of Ocoee has about 52,000 residents. The city collects about $25.5 million in property taxes, making up around 35% of the General Fund budget, which also is a major funding source. 

Because the city relies on ad valorem taxes to fund public safety services, it would be looking at “all sorts of cuts” to continue to fund those services, City Manager Craig Shadrix said. 

“There’s a trend of growing reliance on (ad valorem revenue) for the last five, six years,” he said. “We’re having to rely more and more on it because everything is starting to cost more. … The cornerstone of our services, typically, is public safety, quality of life services, parks, recreational facilities, community centers, events and things like that. … The cost of those is going up tremendously.” 

Without ad valorem revenue, all those services would be affected. 

“It would definitely affect us,” he said. “We’re not sure which version is going to (be on the ballot), so it’s kind of a hard target right now, but it could range from slightly affected to seriously affected.” 

Shadrix said if homestead property taxes were eliminated entirely, most municipalities will lose millions of dollars in revenue. 

Because public services would be affected, the city hopes to engage in community discussions. 

“There are all kinds of tools in the toolbox to try to lower our costs and things like that, but all of it really relates back to the services that our citizens get, so we need to engage our community,” Shadrix said. 

The town of Windermere has about 3,200 residents and one of the lowest property tax rates in the area at 3.7425 mills. 

The town prioritizes public safety with $3.9 million of the $4.3 million ad valorem revenue going toward those services.

Alike other towns and cities, the town would seek significant cuts across the board to be able to continue funding for police, fire and more. 

The town would have to increase its millage rate, sales taxes or non-ad valorem taxes, which would cause challenges for the town and its residents. 

WHAT TO EXPECT 

Municipalities soon will release educational pieces regarding the matter to inform residents of the pros and cons. 

City and town managers recommended residents engage with their local governments and stay informed to be able to come up with their own conclusions once those proposed reforms hit the ballot. 

Residents also are encouraged to reach out to state and county representatives to ask for clarity or express any concerns.