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Florida voters on Tuesday approved a major overhaul of the state\u2019s property tax system. But the droves of billionaires and other ultrawealthy people who recently moved there are unlikely to notice much of a difference from its headline tax break.<\/p>\n
Amendment 3\u2014which raises the homestead exemption on non-school property taxes from $50,000 to $150,000 in 2027 and to $250,000 in 2028\u2014passed with 62% of the vote, according to the Associated Press. Supporters pitched Amendment 3 as relief for everyday homeowners, and for many, it is. But because the exemption is a flat dollar amount, it does far less for the billionaires who turned South Florida into one of the country\u2019s wealthiest enclaves.\u00a0<\/p>\n
Take Citadel CEO Ken Griffin, who moved his firm from Chicago to Miami, and Amazon founder Jeff Bezos also moved to Miami in 2023 and has since bought a $237 million compound on Indian Creek, the island nicknamed \u201cBillionaire Bunker.\u201d Bezos is also reportedly buying a $69.5 million oceanfront estate in nearby Golden Beach.<\/p>\n
Experts told Fortune, though, the bigger factor of Amendment 3 for people like Griffin and Bezos is a less-noticed part: a tighter limit on how fast taxes can rise on second homes, rentals, and other properties that aren\u2019t a primary residence. Florida caps how much those properties\u2019 taxable values can increase each year, and Amendment 3 cuts that cap from 10% to 5%. In a hot market like South Florida\u2019s, that slows tax growth on homes whose values are climbing quickly, and many wealthy buyers own more than one.\u00a0<\/p>\n
But for a billionaire who claims a Florida homestead, the savings from Amendment 3 aren\u2019t that noticeable. Raul Gastesi, a real estate attorney and cofounder of Miami law firm Gastesi Lopez Mestre & Cobiella, calculated that at the statewide average non-school tax rate, the expanded exemption will save a homestead owner about $2,085 a year once fully in place. A home assessed at $350,000 would see its local services property tax bill fall from about $3,135 to about $1,050. A $50 million homestead would go from about $524,000 to about $522,000.\u00a0<\/p>\n
\u201cFor the typical family it is real money,\u201d Gastesi said. \u201cFor the mansion owner, it is a rounding error.\u201d<\/p>\n
That\u2019s because the relief is concentrated in the middle of the market. By 2028, a homeowner with a $400,000 house will see much of the portion of their property tax bill that funds cities, counties and local services disappear, Michael Ligon, a strategic capital investor with The Ligon Group in Miami, told Fortune.\u00a0<\/p>\n
\u201cProportionally, this is middle-class relief wearing a luxury headline,\u201d Ligon said.<\/p>\n
Therefore, Michael Martirena, a South Florida luxury real estate advisor, said the change isn\u2019t driving his clients\u2019 decisions.\u00a0<\/p>\n
\u201cSomeone buying a $20 million or $50 million home in Miami is coming for no state income tax, the lifestyle, and the business climate,\u201d he said. \u201cA few thousand dollars a year, and a five-year wait for the full exemption does not change that math. Where it does register is with clients who hold several properties.\u201d<\/p>\n
That wait applies to anyone who isn\u2019t a permanent Florida resident by Dec. 31, who will start at the current $50,000 exemption and won\u2019t get the full amount until their fifth year. Gastesi estimated that costs about $8,400 in forgone savings, which likely wouldn\u2019t be enough to sway the next billionaire thinking about a move.<\/p>\n
\u201cAmendment 3 may influence timing, but likely not destination,\u201d Abigail Hall, an economics professor at the University of Tampa, told Fortune.<\/p>\n
The real money is in second homes\u2014and so is the risk<\/p>\n
For wealthy owners with more than one Florida property, the lower cap matters more. In a market where values rise 8% a year, Gastesi estimated, it would save the owner of a $50 million second home about $15,750 in the first year and roughly $280,000 over five years.<\/p>\n
But local governments still have to cover the cut. State economists estimate cities, counties, and special districts will eventually lose $11.86 billion a year, and the amendment doesn\u2019t provide new state money to replace it. Miami-Dade County alone estimated it could lose roughly $385 million in the first year.\u00a0<\/p>\n
\u201cThere is not a reasonable way for local and municipal governments to fully close these gaps,\u201d Hall said.<\/p>\n
If they raise rates, an increase of just $1 for every $1,000 of taxable value would cost the owner of a $50 million homestead about $49,750 a year, Gastesi calculated, wiping out the exemption\u2019s savings many times over.<\/p>\n
\u201cHomeowners should read their tax bills closely next year, because the savings on one line may come back on another,\u201d Gastesi said.<\/p>\n
#Floridas #homestead #exemption #barely #dent #billionaires<\/p>\n","protected":false},"excerpt":{"rendered":"
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