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  • The Florida Property Tax Fight, Without the Talking Points

    What is actually on the table in 2026, what is not, and who would quietly win if any of it reaches the ballot

    FL Real Estate Insider — Week of May 18, 2026 By Luis Noronha

    For the last six months, every Florida real estate conversation I have been in eventually turns to the same question: “is the property tax thing actually happening?” The honest answer is that the political pressure is real, the proposals are real, and the mechanics of who would benefit are very real — but almost none of the public commentary you have read about it is accurate enough to use.

    So this week I want to do something different. I want to lay the actual proposals out side by side, with the bill numbers, what each one would do mechanically, where each one died in this past session, and what each would mean for a Florida property owner depending on whether you live in your house, rent it, or hold it as an investment.

    Then I will mark — clearly — what I think, separate from the statute.

    What is actually on the table

    Florida’s 2026 regular session produced a cluster of House Joint Resolutions aimed at homestead property taxes. They are not interchangeable. Each does something different, each cleared a different point in the process, and each carries a different bet about who benefits.

    HJR 203 — phased elimination of non-school property tax on homesteads. Increases the homestead exemption from non-school ad valorem taxes by $100,000 per year for ten years beginning in 2027, until homesteaded primary residences are fully exempt from non-school property tax by 2037. School property taxes are preserved. HJR 203 passed the House 80–30 on February 19, 2026 — the only proposal to receive a floor vote — and then died in the Senate Appropriations Committee when the regular session ended March 13, 2026 without a hearing. (HJR 203 bill page, Florida House, Florida Phoenix coverage, Florida Policy Institute bill summary)

    HJR 209 — a new $200,000 second homestead exemption conditioned on carrying comprehensive property insurance. Stacks on top of the existing homestead exemption, applies only to non-school ad valorem taxes, and applies only to homesteads carrying a comprehensive multiperil policy. The Revenue Estimating Conference put the local-government revenue cost at roughly $8.6 billion per year, and the legislative analysis estimated that about 83 percent of Florida homesteaded homeowners would qualify. HJR 209 cleared all of its committees but died on the Second Reading Calendar without a floor vote. (HJR 209 bill page, Florida House, Florida Policy Institute bill summary)

    HJR 213 — reassess homestead property every three years instead of every year, with the cumulative cap held at 3 percent or CPI. Materially slows assessed-value creep for long-tenured homesteaders. Cleared committees, died on the Second Reading Calendar. (Florida Policy Institute bill summary)

    HJR 211 — remove the $500,000 cap on Save Our Homes portability. Allows a homesteader to transfer the full accumulated SOH benefit to a new primary residence, not just the first $500,000. Stalled before Ways and Means. (Pegasus Lends portability summary, Florida Policy Institute bill summary)

    HJR 201, 205, 207 — additional homestead-exemption increases of varying sizes and structures. All stalled before Ways and Means. (Florida Policy Institute bill summary)

    Net of all of that: the 2026 regular session produced exactly one proposal that made it to a full chamber vote, and the April 2026 special session — which also covered the budget — adjourned without putting any property tax measure on the November 2026 ballot. (WFLX coverage of session end, Barnes Walker post-session update)

    What everyone is now waiting on

    The path forward, if there is one, runs through a third special session this summer. Governor DeSantis has signaled July or August 2026 as the likely window, contingent on a deal with the Senate. To get a constitutional amendment on the November 2026 ballot, both chambers need to approve it with a 60 percent supermajority, and the Secretary of State has a late-August certification deadline. Voters would then need to approve the amendment with a 60 percent supermajority to ratify it. (Fox Business — DeSantis phased approach, WFLX — third special session)

    The Senate is the real story. Senate President Ben Albritton has been explicit that the Senate is not ready to send a property tax amendment to the ballot without first solving for the impact on what he has called Florida’s “fiscally constrained” counties. Senate Appropriations Chair Ed Hooper put it more plainly: “There’s 67 totally different counties in this state, and a property tax issue that is great for one county could crush 31 poor counties.” (Florida Voice — Albritton final message, Florida Realtors — Lawmakers continue work on property tax plan)

    That is the negotiating wall. The House wants to give voters an option in November. The Senate wants to first answer the question “and how do small counties pay for sheriffs and roads?” before it agrees to anything.

    The replacement-revenue math, which is the part nobody on the political side wants to be specific about

    The piece of this that the talking points consistently soft-pedal is what replaces the revenue. Florida’s homestead non-school property tax base is large enough that the only credible single-lever replacement is a substantially higher sales tax. The Florida Policy Institute’s analysis concluded that fully replacing the lost revenue with sales tax would require Florida to roughly double its state sales tax to about 12 percent — which would be the highest state sales tax rate in the country. (Kiplinger summary of FPI analysis)

    Florida TaxWatch has not endorsed elimination either. Brandi Gunder, Florida TaxWatch’s vice president for research, said publicly that “tax levies are growing at an unsustainable pace” but also that any restructure “has to be a partnership between local, state — everybody on board to know how critical government services will be funded.” (WUSF — TaxWatch on property tax elimination)

    Translation: even the conservative-leaning fiscal watchdog is not going to wave this through without a credible replacement plan.

    What the live bills would actually do, for the actual people who own actual property

    This is where most of the public commentary breaks down. Let me put the mechanics in plain English.

    If you own and live in your home (homesteaded primary residence): every live proposal benefits you, on different timelines. HJR 209 would deliver the biggest immediate cut on day one — a $200,000 additional exemption stacked on the existing $50,722 baseline exemption (propertyexemption.com — Save Our Homes 2026 guide), conditional on carrying comprehensive insurance, for a total exemption around $250,722 on non-school taxes. HJR 203 would deliver a deeper cut but over a decade. HJR 213 would slow your assessed value growth. HJR 211 would let you carry your full SOH benefit to your next primary residence with no $500,000 cap.

    If you own a second home, an investment property, an Airbnb, or commercial property: none of the live proposals reduce your property tax. The phased elimination in HJR 203 specifically excludes non-homestead property; HJR 209 explicitly excludes non-homestead property; the SOH-related proposals are structurally tied to homestead status. The existing 10 percent non-homestead assessment cap (Florida Statute 193.1556) continues to apply, with the standard reset to full market value upon ownership change. (Pinellas County PA — Non-Homestead 10% Cap)

    If you rent in Florida: none of these proposals delivers you direct relief, and the replacement math is structurally regressive — sales tax falls more heavily on lower-income households as a share of income than property tax does. (Kiplinger summary of FPI analysis)

    If you are about to close on a new construction primary residence: this is the corner of the market that gets the least public attention and where the mechanics are most interesting. Under existing law, new construction is reassessed at full market value as of the first January 1 after substantial completion, and is added to the capped assessed value of the land. Once homestead is filed, the 3 percent (or CPI) Save Our Homes cap kicks in for the following year. (Florida Department of Revenue — Property Tax Information for First-Time Florida Homebuyers (PDF), § 193.155, Florida Statutes) Layering HJR 209 or HJR 203 on top of that mechanic would compress non-school property tax on a new code-current primary residence faster than on essentially any other asset class in the state.

    What I think — clearly marked as opinion

    I want to clearly mark what follows as my view, not statute.

    The political framing of this debate has been “homeowners versus government,” and that framing is making people miss the more important story. Every live proposal that came out of the 2026 session — HJR 203, HJR 209, HJR 213, HJR 211, all of them — concentrates the benefit on owner-occupied primary residences. By design. Some of them go further and condition the benefit on the property carrying insurance that an actual carrier is willing to write, which in Florida in 2026 means a structure built to current code is materially advantaged over older, harder-to-insure stock.

    If any version of this package reaches the November 2026 ballot and passes, three things follow.

    First, the relative carrying cost of a homesteaded primary residence drops, and drops most for higher-assessed-value homes — which is the segment with the largest absolute non-school millage bill. That is a transfer toward the move-up and luxury primary-residence buyer, which is the segment new code-current construction is built for.

    Second, the relative carrying cost of investor-held inventory — second homes, short-term rentals, institutional single-family-rental portfolios — does not drop. The owner-occupied buyer is being explicitly advantaged versus the investor buyer at the margin. That is a small but real tailwind for end-buyer-driven new construction and a small but real headwind for institutional SFR exposure in Florida — which builds on the pattern I have written about in prior issues. (FL Real Estate Insider — Wall Street Landlords)

    Third, the insurance-conditioned design of HJR 209 specifically rewards buildings that current Florida carriers are willing to write — which means, in practice, FBC-current construction. The reform package and the insurance market are quietly pointing at the same asset.

    I am not predicting any of these proposals passes. The Senate roadblock is real, the replacement-revenue problem is unsolved, and the political appetite for raising sales tax to 12 percent does not exist. The most likely outcome remains a partial package — most plausibly some form of HJR 209 (insured-homestead exemption) plus an expanded portability fix — rather than full HJR 203 elimination.

    But the part of this that will happen, whatever the November ballot ends up looking like, is that the political conversation is now permanently anchored on giving more of the tax relief to owner-occupied primary residences. That anchor is not moving. And whoever is positioned to sell or hold owner-occupied primary residences in Florida is on the right side of that anchor.

    From the Developer’s Seat

    This section is my view, not statute.

    I read the entire 2026 property tax package as a slow tilt of the rules toward exactly one buyer profile: the homesteaded, well-insured, primary-residence owner of a code-current Florida home. Every live proposal advantages that buyer. The 10 percent non-homestead cap (and the reassessment-on-sale mechanic) keeps the rules less favorable for investor-held and second-home inventory. The insurance condition in HJR 209 quietly favors structures that today’s carriers will write — which means structures built to current FBC. None of this is accidental.

    The practical implication for capital is straightforward. The Florida residential lane with the most political wind at its back is owner-occupied, code-current, primary-residence new construction priced for an HNWI move-up buyer. That is the lane Lana operates in. It is also the lane in which family-office and HNWI capital has a structural advantage over institutional capital, because the holding period, the buyer profile, and the underwriting risk are all things patient private capital handles better than a public REIT or a Wall Street SFR vehicle. If you are an accredited investor and want to see how this thesis is actually expressed in live projects with named underwriting, that is what the Lana Investor Memo is for. Reply to this email and I will add you to the next memo distribution.

    Sources

  • The One Big Beautiful Bill Boosts Impact for Real Estate Investors

    In mid-2025, Congress introduced what’s being called the One Big Beautiful Bill—a sweeping tax reform package aimed at reigniting economic growth, incentivizing investment, and easing burdens on individuals and businesses alike. For real estate investors and developers, this legislation represents more than just another tax cut—it is a potential game-changer.

    With targeted provisions benefiting property developers, syndicators, and even passive investors, the bill’s real estate-friendly measures offer new tools to boost profitability, unlock liquidity, and optimize long-term strategies. In this article, we’ll unpack the most relevant parts of the bill and explain how each can positively affect real estate investing in the coming years.

    1. 100% Bonus Depreciation Extended (and Expanded)

    One of the most powerful tools in the investor’s tax toolbox is bonus depreciation, and the Big Beautiful Tax Cut gives it a significant revival. Originally set to phase out after 2026, the bill extends 100% bonus depreciation through 2029. Even more significantly, it expands the list of eligible property and reintroduces enhanced Section 179 expensing limits, raising the cap to $2.5 million (phasing out at $4 million).

    Why This Matters:

    For developers and property owners, bonus depreciation allows for immediate deduction of the full cost of qualifying improvements, such as appliances, HVAC systems, roofing, and other building components. Typically, these items would be depreciated over 5, 15, or even 39 years.

    By deducting them in the first year, investors can significantly reduce taxable income, improving short-term cash flow and increasing the internal rate of return (IRR). This is especially impactful for value-add projects or new developments where heavy capital expenditures occur early in the investment cycle.

    Practical Example:

    Suppose a developer spends $600,000 on qualified improvements across a portfolio of rental properties. In that case, they can deduct that full amount in the first year rather than over decades, saving as much as $200,000 in taxes depending on their tax bracket.

    2. SALT Deduction Cap Raised

    The bill loosens the controversial State and Local Tax (SALT) deduction cap introduced in the 2017 Tax Cuts and Jobs Act. That law limited SALT deductions to $10,000, disproportionately hurting taxpayers in high-cost states like New York, California, and Florida. The new legislation raises the cap significantly, to $30,000 or even $40,000, depending on the version of the bill and income levels.

    Why This Matters:

    Real estate professionals and high-net-worth individuals who invest through pass-through entities often report their income on personal returns. The new SALT deduction cap offers meaningful relief—especially for investors based in high-tax states—by allowing more of their state and local taxes to be deducted at the federal level, thereby reducing overall taxable income.

    Investor Takeaway:

    With larger SALT deductions, net after-tax returns improve. For sponsors marketing high-end or urban projects, this also improves the financial picture for potential investors deciding between asset classes.

    3. Qualified Business Income (QBI) Deduction Improved

    The QBI deduction under Section 199A has been a significant benefit for investors and developers operating through LLCs, S corporations, or partnerships. The Big Beautiful Tax Cut increases this deduction from 20% to 23% of qualified business income after 2025.

    Why This Matters:

    A higher QBI deduction increases the effective return for investors who receive income from rental activities classified as a qualified trade or business. This extra 3% might seem minor, but it adds up, especially for those with seven- or eight-figure income from real estate operations.

    Strategic Implication:

    Sponsors should consider revisiting their entity structures to maximize QBI eligibility, especially for joint ventures and development deals where income distributions can be optimized.

    4. Opportunity Zones Extended with Enhancements

    Initially established in 2017, Opportunity Zones (OZs) have driven billions in investment into underserved communities. The Big Beautiful Tax Cut extends the OZ program through 2033. It introduces enhancements aimed at rural areas, as well as long-term holding benefits.

    Key updates include:

    • 30% basis step-up after 5 years (up from 10% at 5 years previously) for rural OZs
    • Expanded eligibility for zones in tribal and economically distressed areas
    • Greater clarity on reporting and compliance requirements

    Why This Matters:

    The enhancements create a fresh incentive for developers to look outside major metros for projects in rural or emerging markets. Investors get greater tax deferral and permanent capital gains exclusion benefits for qualified OZ investments.

    Long-Term View:

    For firms with experience in secondary markets, this presents an excellent opportunity to pursue affordable housing, hospitality, or mixed-use projects in underutilized areas, now with enhanced tax incentives to support them.

    5. Enhanced Low-Income Housing Tax Credit (LIHTC)

    Affordable housing developers have long relied on the LIHTC to bring equity into deals that may otherwise be financially infeasible. The new tax law increases the 9% credit allocation by 12.5% from 2026 to 2029 and reduces the 4% credit bond-financing threshold from 50% to 25%.

    Why This Matters:

    These changes make it easier to qualify and raise capital for LIHTC-funded projects. Developers working on affordable or mixed-income housing can now access larger equity contributions from syndicators or institutional partners.

    The 25% bond financing threshold makes it easier for smaller or more complex projects to get approved, reducing project delays and allowing for faster execution.

    6. Passive Activity and Business Interest Deduction Clarifications

    The bill also refines the business interest expense limitation rules under Section 163(j), reintroducing the ability to add back depreciation and amortization, at least through 2029.

    Additionally, the excess business loss limitations for non-corporate taxpayers were retained but clarified in favor of certain real estate activities.

    Why This Matters:

    Investors using leverage as a growth tool will benefit from more favorable treatment of interest expense, especially in capital-intensive development or syndication structures. The ability to fully deduct interest improves project feasibility and post-tax returns.

    7. New Withholding Rules for Foreign Investors

    Foreign investors play a critical role in U.S. real estate, particularly in gateway cities and large-scale commercial developments. The new bill introduces withholding requirements ranging from 5% to 20% on capital repatriation from certain U.S. real estate investments.

    Why This Matters:

    While this introduces more administrative work and potential delays in repatriation, it also increases regulatory clarity. For developers working with foreign limited partners (LPs), the new withholding rules can be built into the project’s waterfall and modeled accordingly.

    It’s essential to note that these provisions do not eliminate the appeal of U.S. real estate for international investors. The U.S. remains a stable, appreciating, and dollar-denominated market, now with more explicit rules for taxation and compliance.

    Final Thoughts: A Golden Window for Real Estate Investment

    While the political future of the bill remains uncertain, one thing is clear: the tax code is leaning in favor of real estate, and savvy investors should act accordingly. Whether it’s capturing faster depreciation, unlocking capital in Opportunity Zones, or restructuring pass-through entities to maximize deductions, the legislation offers a compelling case for reassessing strategy.

    Of course, it’s not without complexity. Developers and investors will need to work closely with tax advisors, legal counsel, and underwriters to ensure full compliance and maximize the benefit of each provision.

    However, overall, the Big Beautiful Tax Cut presents real estate professionals with a rare opportunity to increase after-tax returns, access new capital, and expand into previously underutilized markets. With the right structure and timing, the benefits could echo throughout the next investment cycle.