Two Real Estate Tax Changes Every Florida Homeowner Should Understand
— the November property tax vote and federal capital gains. Here's what each really means:
Market Education · Northeast Florida
Two tax changes are making headlines this year — one in Tallahassee, one in Washington. They sound similar, but they affect your home in completely different ways. Here's the plain-English version.
If you own a home in Florida (or you're hoping to), you've probably seen both of these in the news and felt your eyes glaze over. One is the Florida property tax amendment you'll vote on this November. The other is the federal capital gains tax you may owe when you sell. They're easy to confuse — so let's take them one at a time, with just the facts that actually touch your wallet.
First: The Florida Property Tax Amendment
On June 2, 2026, the Florida Legislature passed HJR 1 — the "Save Our Homes from Excessive Property Taxes" amendment. It now heads to the November 2026 ballot, and it needs 60% of voters to pass. This is the tax you pay every year simply for owning your home.
What it would do for homeowners (the upside)
- A bigger homestead exemption. The amount of your primary home's value that's exempt from property taxes would rise to $150,000 in 2027, then $250,000 in 2028 — and be indexed to inflation after that. That means a lower annual tax bill for most Florida homeowners.
- More protection on other property. Annual assessment increases on non-homestead property would be capped at 5% a year, down from 10% today.
What to watch closely (the fine print)
- New residents wait five years. If you move to Florida in 2027 or later, you'd get only a $50,000 exemption for your first five years before qualifying for the larger one. Important for relocating and military families.
- Schools aren't included. The larger exemption applies to most local levies — but not school district taxes.
- The money has to come from somewhere. Property taxes fund roughly 74% of local services in Florida. Analysts estimate this change could cut local revenue by billions a year, and the proposal includes no plan to replace it.
The real risk: a tax cut in one place can be a tax raise in another
To make up the lost revenue, local governments could raise sales taxes, raise millage rates on the property that's still taxable (think second homes, rentals, businesses, and new residents), or add new fees. So while your homestead bill may drop, the trade-offs are worth understanding before you vote. You can read the official announcement of the proposal straight from the Florida Senate here.
Two Taxes, Easily Confused
Before we go further, here's the single chart that clears up almost all the confusion. These are two completely different taxes:
| Capital Gains Tax | Florida Property Tax (Nov 2026) | |
|---|---|---|
| When you pay | Once, when you sell | Every year you own |
| Who charges it | Federal (the IRS) | Local Florida governments |
| Based on | Your profit (gain) — not the sale price | Your home's assessed value |
| What's changing | A bill in Congress may raise the exclusion (not law yet) | A ballot amendment to raise the homestead exemption |
| Affects your sale? | Yes — it reduces your net proceeds | No — it's your annual bill while you live there |
Bottom line: the November vote changes your yearly property bill. It does nothing to what you might owe when you sell. That second tax — capital gains — is its own conversation.
Next: Federal Capital Gains Tax
A capital gain is simply your profit when you sell something for more than you paid. On a home, capital gains tax is a federal tax on that profit. And here's a Florida point people get wrong: our state has no income tax, so there's no state capital gains tax — but the federal tax still applies to Florida sellers like everyone else.
The "2-year rule" — and the part most people miss
If you owned and lived in your home as your primary residence for at least 2 of the last 5 years, you can exclude a big chunk of profit from tax:
- $250,000 of profit if you file single
- $500,000 of profit if you're married filing jointly
Here's the catch many homeowners don't realize: living there 2 years doesn't mean zero tax — it means the first $250k/$500k of gain is shielded. Profit above that cap is still taxable. And remember, the tax is on your gain, not the sale price — your original purchase price, plus improvements and selling costs, all reduce the taxable number.
Why this is suddenly a bigger deal
Those $250k/$500k caps were set in 1997 and never raised — not even for inflation. Meanwhile, the median U.S. home went from about $129,000 to roughly $419,300. So long-time owners who simply held an appreciating home are now bumping into a cap built for a very different market. In Florida specifically, here's the share of homeowners whose gains already exceed the cap — and how it climbs if prices keep rising:
The proposed change in Washington
A bipartisan bill — the More Homes on the Market Act — would double the exclusion and index it to inflation going forward, restoring its original value. The goal is to free up long-time owners who feel "stuck" because selling would trigger a tax hit, which keeps inventory low and prices high for buyers too. Important: this is proposed, not yet law.
Who feels this most
Long-tenured owners, empty nesters looking to downsize, and single filers — whose cap is only half of a married couple's, so they reach it twice as fast. That often means a widowed or divorced owner who's been in the same home for decades.
What This Means for You
If you're selling: most owners won't owe capital gains — the tax is only on profit above the cap, and your purchase price, improvements, and selling costs all lower that number. But if you've owned a long time, gather your closing documents and improvement receipts and talk to a tax professional before you set a timeline.
If you're buying: a lower future property tax bill could help affordability — just know that if you're moving to Florida in 2027 or later, the bigger homestead exemption takes five years to fully kick in.
I'm a Realtor, not a tax advisor — so anything specific to your situation should go to a CPA. But understanding these two changes before you buy, sell, or vote puts you in the driver's seat. That's exactly the kind of clarity I want every client to have.
Does living here 2 years mean I pay no capital gains?
Does Florida have its own capital gains tax?
Will the November property tax vote change capital gains?
Could the property tax cut raise other taxes?
Thinking About Your Next Move?
Whether you're weighing a sale, a purchase, or just want to understand your numbers, start with what your home is worth today — with our Street Market Update, no strings attached.
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Rosalyna Avila
Broker/Owner · Living Truth Homes Realty · Serving Jacksonville, FL
www.livingtruthhomes.com | info@livingtruthhomes.com | (904) 203-8027
Clear Guidance. Strong Systems. Faith-Centered Leadership.
Educational only — not tax, legal, or financial advice. For your specific situation, consult a licensed CPA or tax professional. Figures are current as of 2026 and subject to change; the Florida amendment is subject to voter approval, and the federal bill referenced is proposed legislation that has not become law. Sources: National Association of REALTORS®, Florida Realtors, Tax Foundation, Florida Legislature (HJR 1).
