BREAKING: Florida House Advances Homestead Tax Elimination; Keys Officials Brace for Fiscal Uncertainty
Measure could strip billions from local governments if approved by voters
A sweeping proposal to eliminate most homestead property taxes in Florida cleared the state House on Thursday, setting up what could become one of the most consequential ballot measures for local governments in decades — including municipalities and public schools across the Florida Keys.
The Republican-controlled House voted 80-30 along party lines to approve a proposed constitutional amendment that would eliminate all non-school property taxes on homesteaded properties beginning in the 2027 tax year, if at least 60 percent of voters approve it in the November 2026 general election.
The Senate has not advanced a companion measure, leaving the proposal’s ultimate fate uncertain as the regular legislative session approaches its scheduled March 13 end.
State economists estimate the proposal would reduce local government revenue statewide by roughly $14.8 billion annually. For Monroe County — a small, geographically isolated county with limited land mass and a heavy reliance on property taxes — the potential impact remains unclear but could be significant.
What It Would Mean in the Florida Keys
Unlike many larger counties, Monroe County has no large industrial tax base and limited commercial development.
Property taxes represent the primary revenue source for:
Monroe County Board of County Commissioners
The cities of Key West, Marathon, Key Colony Beach, Layton and Islamorada
Independent special districts, including fire and emergency services
Under the House proposal, school district taxes would not be eliminated. However, city and county general fund revenues derived from homesteaded properties would disappear unless replaced through alternative funding mechanisms.
That raises questions for:
Law enforcement funding
Fire and emergency medical services
Infrastructure and stormwater systems
Transit services
Affordable housing initiatives
Workforce housing subsidies
Monroe County officials have not yet released a fiscal impact analysis specific to the Keys, and it remains unclear how smaller, fiscally constrained counties would be backfilled — if at all — by the state.
School District Questions Remain
The proposal exempts school property taxes from elimination, but indirect impacts are still possible.
The Monroe County School District relies primarily on state funding and local required effort millage. While its core school tax authority would remain intact under the current language, uncertainty remains about:
Local capital funding
Shared service agreements with municipalities
Future legislative adjustments if revenue shortfalls ripple statewide
State lawmakers have offered no formal assurance of long-term stabilization funding for smaller districts.
Political Divide
House Speaker Daniel Perez described the measure as the chamber’s “contribution” to the property tax debate, while Senate Appropriations Chairman Ed Hooper has emphasized caution, noting that all 67 counties would be affected differently.
Democrats warned that eliminating homestead taxes could shift the burden to businesses and renters, potentially increasing fees or sales taxes at the local level.
Gov. Ron DeSantis has publicly supported eliminating homestead property taxes but indicated he prefers a carefully structured plan over a rushed one.
Local Budget Exposure
In Monroe County, where high property values generate significant ad valorem revenue, homesteaded properties represent a substantial portion of the taxable base — particularly in Key West and portions of the Upper and Middle Keys.
If voters approve the amendment in 2026 and it takes effect in 2027:
Municipal governments could face structural deficits
Counties may be forced to reduce services or increase non-ad valorem assessments
Special districts could consider new fees
Law enforcement and emergency services funding structures may require redesign
Local officials have not publicly modeled worst-case scenarios, and it is unclear whether the Legislature would provide offsetting state appropriations.
What Happens Next
The proposal must pass the Senate to appear on the 2026 ballot. If approved by 60 percent of voters statewide, it would take effect in 2027.
Until then, Keys municipalities, Monroe County officials and school administrators face months of uncertainty over what could become the largest structural shift in local taxation in modern Florida history.
For a county surrounded by water and bound by growth restrictions, the question is not simply how much revenue might be lost — but how, or whether, it could be replaced.