Property Tax: Florida vs. California
Understand the core differences in how Florida and California tax property and the financial consequences for homeowners at every stage of ownership.
Property taxes represent a recurring expense for homeowners, and the methods for calculating these taxes vary significantly between states. Florida and California, two of the nation’s most populous states, exemplify this contrast with property tax systems that are distinct in their approach to valuation and limitation, impacting a homeowner’s annual financial obligations. Understanding these differences is part of comprehending the long-term cost of homeownership in either state.
California’s system offers predictability tied to a property’s purchase history, while Florida’s is based on fluctuating market conditions, though it includes protections for primary residences. These two tax structures shape the financial experience of a homeowner differently from the initial purchase to long-term ownership.
The California Property Tax Model
California’s property tax system is defined by Proposition 13. This law established a property’s “base year value,” which is its assessed value at the time of purchase, and limits the tax rate to 1% of this value. For example, a home purchased for $500,000 would have a base general tax levy of $5,000.
This system provides a predictable tax liability, as the assessed value is permitted to increase annually by the rate of inflation or 2%, whichever is lower. This cap prevents tax bills from rising dramatically even if the home’s market value increases substantially. For the 2025–2026 tax year, the maximum 2% increase applies.
A reassessment to current market value is triggered by a change in ownership or new construction. When a property is sold, the purchase price establishes a new base year value. If a homeowner builds an addition, only the value of the new construction is assessed at current market value and added to the existing base value.
The 1% base tax is not always the final amount on a tax bill. Local governments can levy additional voter-approved taxes, known as “Mello-Roos” taxes or special assessments, to fund local services. These are added to the base property tax, meaning the total effective tax rate can be higher than 1%.
The Florida Property Tax Model
Florida operates on an “ad valorem” tax system, where taxes are based on the property’s current market value, or “just value.” This value is determined annually by county property appraisers as of January 1st. The tax rate itself is not a single statewide figure but is composed of “millage rates” set by various local government entities. A millage rate is the tax rate per $1,000 of assessed property value, and a homeowner’s total rate is a combination of rates from the county, city, and school district.
A defining feature for primary residences is the “Save Our Homes” (SOH) amendment. After a homeowner qualifies for a homestead exemption, the annual increase in the property’s assessed value is capped at 3% or the percentage change in the Consumer Price Index, whichever is less. This SOH benefit creates a gap between the lower “assessed value” for tax calculation and the higher market “just value.”
Florida also provides a Homestead Exemption, reducing a primary residence’s taxable value by up to $50,000. The first $25,000 exemption applies to all property taxes, while an additional amount applies to the assessed value between $50,000 and $75,000, but not to school district taxes. For the 2025 tax year, the total available exemption is $50,722 due to an inflation adjustment.
The state also allows for SOH “portability,” which lets homeowners transfer accumulated tax savings to a new homestead. A homeowner must apply for this benefit with their new homestead exemption application by the March 1 deadline.
A Direct Comparison for Homeowners
The differences between California’s and Florida’s property tax systems lead to distinct financial realities for homeowners at various stages of ownership.
Initial Purchase
In California, the property tax is reset to 1% of the purchase price, creating a clear understanding of the tax liability for the new owner. The tax bill is directly tied to what the buyer paid, establishing a predictable base for future years.
In Florida, the situation can lead to a “tax shock” for new buyers. A new owner initially inherits the seller’s lower assessed value for the remainder of the calendar year. On January 1 of the following year, the property is reassessed to its full market value and all prior SOH caps are removed, which can cause property taxes to increase substantially.
Long-Term Ownership
California property owners have a high degree of certainty, as their assessed value cannot increase by more than 2% annually. This creates a stable, slowly rising tax bill that is easy to budget for over many years.
Florida homeowners with a homestead exemption also have their assessment increases capped by the SOH amendment. However, the overall tax bill can be less predictable because the other part of the tax equation, the millage rate, can change annually. If local governments increase millage rates, a homeowner’s tax bill can rise more than the SOH cap suggests.
Selling and Moving Within the State
Florida’s SOH portability allows a homeowner to transfer up to $500,000 of their accumulated tax savings to a new homestead within the state. This benefit lowers the tax base of the new property and encourages mobility.
California’s system, updated by Proposition 19, also allows for the transfer of a home’s tax base. Homeowners who are over 55, severely disabled, or victims of natural disasters can transfer the taxable value of their original primary residence to a new one. This can be done up to three times for those over 55 or disabled. If the replacement home is more expensive, the difference in value is added to the transferred tax base.
Non-Homestead Properties
The treatment of investment properties and second homes differs between the states. In California, Proposition 13’s protections apply to all real property, including investment properties. These properties benefit from the same 1% tax rate on their base year value and the 2% annual cap on assessment increases, providing predictability for investors.
Florida offers less protection for non-homestead properties, which are reassessed annually at their full market value. A 10% cap on annual assessment increases applies to these properties, but this is less protective than the SOH cap, making real estate investment potentially more costly from a tax perspective.