Imagine buying a home in Florida with no state income tax—but still facing the ongoing impact of property tax. For homeowners and real estate investors in cities like Boca Raton, Delray Beach, and Miami, Florida property taxes are central to planning your next move. In this article, we’ll explain how property taxes are structured in Florida, explore key strategies for minimizing tax burden, and highlight how KSR Properties helps clients make smart investment decisions in this dynamic market.

Understanding Florida’s Property Tax Landscape

Florida does not levy state income tax, making it highly attractive for high net-worth individuals and retirees. However, property taxes remain the main revenue source for local governments—supporting education, public safety, and infrastructure. The average effective rate in Florida is around 0.74% to 0.80%, below the national average of ~0.99%.

As property values have risen—some markets like Miami and Jacksonville have seen tax assessments climb nearly 60% since 2019—tax bills are increasing even without rate hikes.

Homeowners can take advantage of a generous homestead exemption: you may exempt up to $50,000 of assessed value from property tax, and your annual assessed value can only rise by a maximum of 3% or CPI, whichever is lower.

Key Tax Updates and Relief Proposals for 2025–26

In March 2025, Governor DeSantis proposed a plan to provide $1,000 tax rebate checks to homesteaded homeowners, covering state-mandated school property taxes. The relief could reach around 5 million homes by year-end 2025.

Despite pushback, the state also proposed options for long-term reform—even putting the notion of constitutional abolition of property taxes on the 2026 ballot. While controversial, the proposal highlights the political importance of property tax relief in Floridaʼs future.

Impact of Improvements and Renovations

A real-life case in Pompano Beach made headlines: after major renovations, homeowners triggered a full reassessment—which removed long-held “Save Our Homes” benefits—leading their property tax bill to skyrocket from $15K to over $90K/year.

Bottom line: significant upgrades may trigger reassessment of the entire property, not just the improvement—making tax planning critical when renovating or developing in Florida markets.

Investment Strategies: Tax Planning for Real Estate Buyers

Homestead Strategies & Portability

  • Claim homestead exemption on your primary residence to save up to $50,000.
  • If relocating within the state, you can transfer up to $500,000 of accrued “Save Our Homes” benefits to your next homestead—provided applications are made within the allowable timeframe.

Using 1031 Exchanges for Investment Properties

Investors may defer federal capital gains tax via Section 1031 exchanges, which can allow them to swap real estate investments while preserving cost basis. This applies to qualifying investment property only.

Structuring via LLCs

Many investors, including foreign buyers, hold properties through LLCs for privacy, estate planning, and ease of transfer—while still subject to property tax assessments at the parcel level.

Applying These Strategies — What to Consider

  • Primary vs. investment property: Homestead protections apply only to a primary residence. Secondary homes and rentals are fully taxed without exemption.
  • Improvements vs. value maintenance: Understand how renovations may impact assessed value and future tax liability.
  • Portability and timing: Plan your purchase and homestead claim to maximize carried-over benefits.
  • Local rebates and incentives: Take advantage of local tax packages, early-payment discounts, and proposed rebate programs.

How KSR Properties Supports You

  • Ownership Structuring: We guide investors and homeowners in structuring property ownership (personal vs. LLC) consistent with tax outcomes and asset protection goals.
  • Renovation Timing: Advising on development timelines to avoid triggering reassessment unintentionally.
  • Homestead Planning: Assisting eligible buyers in declaring exemption and transferring “Save Our Homes” benefits strategically.
  • Investor Guidance: Helping non-residents or investors utilize 1031 exchange structuring for tax-efficient portfolio growth.

Conclusion

While Florida’s attractive tax environment with no personal income tax remains a powerful draw, property taxes still play a critical role in real estate decisions. The homestead exemption, portability options, and emerging rebate programs offer opportunities—but navigating improvements, redevelopment, and investment structures can complicate tax outcomes.

Whether you’re a South Florida homeowner, an investor expanding your portfolio, or an overseas buyer looking at Broward or Palm Beach County, KSR Properties offers the expertise and strategic insight to help you minimize tax risk and maximize value.

Q1: How are Florida property taxes calculated?

A: Property taxes in Florida are based on assessed value and local millage rates, averaging 0.74%–0.80%, which is below the U.S. national average of ~0.99%.

Q2: What is the homestead exemption in Florida?

A: The homestead exemption allows up to $50,000 of assessed value to be excluded from taxation and caps annual increases in taxable value at 3% or CPI.

Q3: Can I transfer my homestead tax benefits if I move within Florida?

A: Yes. The “Save Our Homes” portability provision allows up to $500,000 of tax benefits to transfer to a new homestead if claimed within 3 years.

Q4: Do renovations increase property taxes in Florida?

A: Yes. Major improvements can trigger reassessment of the full property value, potentially removing long-standing tax caps and significantly raising tax bills.

Q5: How does KSR Properties help with property tax planning?

A: KSR Properties advises on ownership structuring, homestead planning, renovation timing, and investor strategies like 1031 exchanges to optimize tax outcomes.