A tale of two Floridas: Real estate industry torn over DeSantis' push to eliminate property taxes
On the surface, not paying property taxes may sound nice. However, real estate experts in the Sunshine State seem to be at odds over the issue.
Gov. Ron DeSantis recently doubled down on completely eliminating property taxes, a move that would crown Florida as the only U.S. region with no state income or property tax, and live up to its "free state" moniker. While many may view lower taxes as an attractive play, there could be unintended consequences.
"I don't see how this could possibly hurt anybody that's going to vote to pass it, but again, it's all going to come down to exactly what gets affected, because I know that that money does need to be replaced somehow, somewhere by someone," Continuum Realty President Phil Gutman told Fox News Digital.
"I am a native Floridian, and I believe that we have created an environment which is among the best in the entire country as far as the balance of business-friendly and lifestyle, and it is imperative that we maintain that advantage that we have," Budge Huskey, president and CEO of Premier Sotheby’s International Realty, also told Fox News Digital.
"But at the same time, it has to be responsible, and it has to be based on real numbers."
Lawmakers are reportedly evaluating a number of changes to the state’s housing structure, including a $500,000 homestead exemption (maximum $1 million for seniors), capping property assessment increases at 15% and eliminating property taxes altogether.
"Property taxes effectively require homeowners to pay rent to the government," DeSantis said in the original press release. "Constitutional protections for Florida homeowners require approval of the voters in 2026. In the meantime, Floridians need relief. I am today proposing a plan that will result in—on average—$1,000 rebate checks for each homestead as a discount on their property taxes. If the Legislature acts on this plan now, we can get this done this year."
DeSantis’ office pitched the proposal in March, and has since vetoed a study on property taxes that evaluates how local governments use tax revenue and what happens if they are reduced. U.S. House Rep. Greg Steube, R-Fla., said he supports the veto on "Mornings with Maria," Tuesday, as it would reveal "what we already know."
"It's been annoying me paying those property taxes since I bought a home. So for me, obviously, it sounded great and it sounds great. I've followed it closely. I know there's still a lot of detail left to what he's proposing," Gutman reacted. "I have gotten a lot of calls, a lot of questions from clients, potential buyers, a lot of people out of the Northeast and all over the country, for that matter, asking my thoughts on it and what the probability of something like that happening. So for me, I very much welcome it. I think it would be great."
"It's creating really a perfect storm for us to be completely flooded with buyers," he added. "Why wouldn't you want to move here at that point?"
"I think we're all of the same mindset that lower taxes are better as long as it's done with a methodology that is sensible, and it actually allows for the investments that are necessary to maintain the quality of life that is also such a key aspect of attracting future residents or retaining residents within the state," Huskey agreed before rebutting, "at the end of the day, you cannot simply lower property taxes or eliminate property taxes without replacing at least a significant majority of that revenue through alternative means."
The Florida Policy Institute reports that property taxes generate $55 billion annually and account for 18% of county revenues, 17% of municipal revenues and up to 60% of public education funds. The group estimates that Florida’s sales tax may need to rise from 6% to 12% to account for the potential property tax loss.
"When you look at the amount of revenue that is collected in property taxes within this state and the implications, if the math is wrong on any of this, especially in the absence of clarity as to alternative funding, to suggest that an investment of $1,000,000, which is a pittance compared to what we are looking at shifting in terms of revenues, it makes no financial or business sense to me," Huskey argued.
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"It appears as though people do not wish to actually have a thoughtful, well-researched basis on which decisions are made."
During an interview with Fox News’ Sean Hannity last week, Florida’s governor teased an "entry tax" for a new wave of residents that could be enticed by zero property taxes in order to make up for the loss of revenue.
"For the real estate world, it doesn't benefit or negatively affect us in any way. Obviously, it depends on how much that entry tax would be," Gutman said. "At some point, you have to be okay with paying some sort of fee and entry tax or whatever it takes to get here."
"From the standpoint of real estate sales in general, it would be very much a positive," Huskey noted. "However, I do think that in order to try to offset any kind of entry tax, [it] would have to be almost at an exorbitant level based upon the current migration that we have. We are not experiencing the same levels of migration that we had during COVID by any stretch of the imagination."
"Who's gonna build the roads? Who's gonna fund the [police]? Who's going to fund education? Who's to do all the things that need to be done to have a productive society?" Huskey also posed. "It gets back to the fact that everybody wants lower taxes, but it must be strategic."
"I don't think he's gonna do anything that's going to make the roadways less safe, the schooling worse. He's just not that type of a governor," Gutman countered. "He truly cares, in my opinion, about the people and the state of Florida. So he's not gonna do something that's gonna have a negative impact from Jacksonville down."
Both industry execs additionally addressed concerns that this proposal disproportionately favors the area’s wealthiest residents.
"When you pass a law like that and eliminate property taxes, it's obviously gonna benefit a lot of people that really didn't need that benefit to begin with, right? But that's just a really small percentage of the people that will be positively impacted… Something like this is a really broad stroke that will be across the entire state. And, ultimately, I do think that there's a lot of people who are in need of it," Gutman said.
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"I tend to believe it is a very regressive form of tax because, ultimately, the burden is going to fall on a percentage basis to those with more limited means," Huskey said. "The elimination of property taxes essentially strips municipalities of any kind of local decisions with regard to funding."
"I am very much in favor of overall studies to examine what is the best methodology for raising revenues in the state and whether that involves a reduction in property taxes as part of the mix… at the end of the day, I'm a business person. I run a large business. I know the numbers. And I want to have somebody show me the numbers rather than legislating in the absence of clarity," Huskey concluded.