Why Are Property Taxes So High in Florida?

Florida property owners, especially those new to the state, question the size of their tax bills. The reasons for the state’s property tax levels stem from its financial structure, methods for property valuation, and rules designed to protect long-term residents. This system influences how local governments are funded and how the tax burden is distributed among property owners.

Florida’s No-Income-Tax Structure

Florida is one of a handful of states that does not levy a personal income tax. This constitutional prohibition means state and local jurisdictions must rely on other revenue sources to fund public services. While the state government relies on sales tax, property taxes are the primary source of funding for local governments, including counties, municipalities, and school districts.

This reliance makes property taxes a major component of the fiscal picture. The absence of a state income tax creates a direct dependency on property-based revenue for local entities. This structure concentrates the fiscal pressure on property owners, as the need to fund services for a growing population often translates into adjustments in property tax revenues.

While residents benefit from keeping more of their earnings without a state income tax, they experience the trade-off through their property tax obligations. The cost of government operations, from public safety to schools, must be covered. In Florida’s system, real estate carries a large portion of that responsibility.

The Property Valuation Process

A property tax bill begins with establishing the property’s value. In Florida, the county Property Appraiser assesses all real property within their county as of January 1 each year. The standard used is “just value,” which is the same as market value—the price a property would likely sell for on the open market. This valuation is determined by analyzing the real estate market and recent sales of comparable properties.

The Property Appraiser’s office undertakes a reassessment each year to ensure values reflect current market conditions. This annual process means that as the real estate market fluctuates, so does the value upon which taxes are based. A booming market with rising home prices will lead to higher just value assessments.

Property owners receive a Notice of Proposed Property Taxes, called a TRIM notice, in August. This document is not the final bill but discloses the property’s just value, any applied exemptions, and the proposed tax rates from local entities. It provides property owners an opportunity to review their valuation and appeal it with the Property Appraiser’s office if they believe it is inaccurate.

Understanding Millage Rates

Once a property’s value is determined, the next component is the millage rate. A “mill” represents $1 of tax for every $1,000 of a property’s taxable value. The total millage rate is a composite of several individual rates set by different local government bodies, including the county, city, school board, and various special districts.

Each of these taxing authorities independently determines its own millage rate based on its budgetary needs. For example, the county commission approves a rate to fund law enforcement, while the school board sets a rate for public education. Special districts for services like water management also set their own rates, which are all added together to create the total millage rate.

The process is driven by budget requirements. Local entities calculate the revenue needed and divide that by the total taxable value of property in their jurisdiction to establish the millage rate. An increase in a tax bill can be caused by a rise in property value or by a local body increasing its millage rate to meet higher costs or fund new projects.

Impact of the Save Our Homes Cap

The Save Our Homes (SOH) amendment to the Florida Constitution is a major factor influencing property taxes. It places a limitation on how much the assessed value of a homesteaded property can increase annually. The cap is set at 3% or the percentage change in the Consumer Price Index (CPI), whichever is lower. This means the value used for tax calculation cannot increase dramatically, even if the market value skyrockets.

The SOH cap benefits long-term homeowners, as their property’s assessed value can become significantly lower than its market value over time. This protection is paired with the standard homestead exemption. The first $25,000 of a property’s value is exempt from all property taxes. An additional exemption of up to $25,000 applies to the assessed value between $50,000 and $75,000, but this second part does not apply to school district taxes.

When a property is sold, the SOH protection is removed, and its assessed value is reset to full just value. This reset is a primary reason new homeowners receive a tax bill that is substantially higher than what the previous owner paid. The system creates a situation where neighbors in identical houses can have different tax liabilities. This mechanism shifts the tax load from long-term residents to new buyers and owners of non-homestead properties.

Funding Local Community Services

Revenue from property taxes funds a wide range of local government services and infrastructure projects. These funds remain within the local communities where they are collected to pay for day-to-day operations. The services that define a community’s quality of life are directly tied to the collection of these taxes, which support:

• The public school system, which is often one of the largest components of a local budget.
• Public safety, including salaries and equipment for sheriff’s offices, police departments, and fire and rescue services.
• Public infrastructure, such as the repair of roads, management of water systems, and climate-resiliency projects.
• Community amenities like public parks, recreational facilities, and local library systems.
• The operational costs of the county court system and other administrative functions of local government.