Property Tax Reform FAQs

HJR 1F is a House Joint Resolution passed by the Florida House and Senate proposing amendments to the Florida Constitution. Because it is a proposed constitutional amendment, it does not become effective merely because the Legislature approved it. At least 60 percent of the voters casting ballots on the amendment must vote “yes.” If approved, the amendment would take effect January 1, 2027.

• House Joint Resolution (HJR) 1F (PDF)

The homestead exemptions proposed would apply to levies other than school-district levies. The existing constitutional treatment of the school-tax homestead exemption would remain separate.

For that reason, statements that a qualifying homeowner would pay “no property taxes” are incomplete. A homeowner could owe little or nothing for certain county, municipal, or special-district levies, while still owing school-district property taxes. A tax bill may also include non-ad valorem assessments, which are not calculated in the same manner as property taxes.

The legislature is instructed by the proposal, should it pass, to establish a uniform process by which full elimination of homestead property taxes can be achieved by counties and cities, but it does not provide further details. There is no implementing bill for this proposal yet.

Going forward, the terms “property tax” and “levies” (and variations thereof) should be understood to mean property taxes payable to non-school taxing authorities, such as the Town of Orchid, Indian River County, St. Johns River Water Management District, Mosquito Control District, the Hospital District, the Sebastian Inlet District, etc.

For a person who maintained permanent residence in Florida as of December 31, 2026, the exemption from property taxes would increase to as much as $150,000 beginning January 1, 2027, and to as much as $250,000 beginning January 1, 2028.

Beginning in 2029, the $250,000 amount would be adjusted upward annually based on the rate of inflation.

The aim of these increased exemptions is to provide property tax relief and save homesteaded property owners money.

The amount of savings would vary according to each property’s value, benefits under the Save-Our-Homes program, the millage rates adopted by the affected taxing authorities, and more.

A larger exemption reduces the taxable value to which a millage rate applies. But a higher millage rate increases the tax charged on the taxable value that remains. The proposal does not restrict increases in millage rates by taxing authorities, though a different 2026 bill, which is already in effect, requires a higher voting threshold of governing boards to raise the millage rate.

Owners of homesteaded properties with taxable value in excess of the increased homestead exemption would be taxed on that remaining value and could be affected by millage-rate increases approved by taxing authorities impacted by a decrease in gross taxable value across their jurisdictions.

If a property’s taxable value would be wholly below the increased homestead exemption, then those potential increases in millage rate would not affect its owners. This may include properties with a wide range of market value, because assessed value, to which the homestead exemptions apply, takes into account “Save our Homes” protections, which generally limit annual increases in the assessed value of a homesteaded property to the lesser of 3% or the rate of inflation, even when the property’s market value rises more quickly.

In 2025, according to the Office of Economic and Demographic Research, the statewide median market value of a Florida homestead parcel was approximately $337,907. Statewide, assessment differentials, including Save Our Homes and portability, reduced the aggregate just value of homestead property by approximately 37.6%.

Two different homesteaded property owners could experience very different outcomes. For example, the first could see a reduction of taxable value to $0, while another, with remaining taxable value, could potentially pay more if taxing authorities increase their millage rates across what is a smaller tax base.

Importantly, it is not known at this time whether taxing authorities with jurisdiction in Orchid will increase their millage rates as a result of this proposal.

For levies, the annual assessment-growth limit applicable to specified non-homestead residential and nonresidential property would be reduced from 10% to 5% beginning January 1, 2027. The property would remain subject to reassessment rules following certain ownership changes or qualifying improvements.

Non-homestead owners, including those of commercial properties, would be impacted by potential increases in millage rates levied by taxing authorities seeking to offset revenue losses.

Rental or leased properties generally do not receive the homestead exemption. Their owners could benefit from the reduction in the non-homestead assessment-growth limit, but could also be affected by future millage-rate changes. Any effect on rent would be indirect and would depend on the property, lease terms, market conditions, and the owner’s decisions.

Importantly, it is not known at this time whether taxing authorities with jurisdiction in Orchid will increase their millage rates as a result of this proposal.

A person who first becomes a permanent Florida resident on or after January 1, 2027, generally would initially receive an exemption of up to $50,000 from levies on a homesteaded property. After maintaining Florida residency for five years, that person could qualify for the larger exemption. The proposal also provides a procedure under which a county or municipality could shorten that period for a critical local need beginning in 2030.

The proposal expressly identifies public safety, including law enforcement, fire service, and emergency medical service, as an authorized use of local county and municipal property-tax revenue, along with infrastructure, stormwater, flood-control and natural-resource projects, debt obligations, retirement obligations, and municipal and county operations.

That provision should not be understood as a guarantee of current funding, however. The proposal does not require that police or fire-rescue budgets funded by property taxes remain unchanged or be exempt from cuts.

The Town of Orchid relies on Indian River County for these services.

The proposal does not provide for the receipt by local governments of funds to make up for lost revenue by means of a state trust fund or dedicated state revenue source.

The proposal does not address other types of taxes to which Florida’s property owners may be subject. There is no increase in the sales tax rate proposed in this measure, for instance.

It may be of interest to some property owners that, generally, local property taxes may be deductible on a federal income-tax return for taxpayers who itemize, subject to federal limitations. Fees for services and many assessments are generally not deductible.

The proposal does not require any taxing authority to adopt or eschew any particular response. Depending on the size of its revenue reduction, a taxing authority could:

• Reduce, cut, or defer services, programs, staffing, maintenance, or capital projects
• Use available reserves on a temporary basis
• Increase its millage rate within applicable constitutional and statutory limits
• Increase existing fees or establish new charges for services
• Use special assessments where legally authorized
• Seek more state, federal, or grant funding, and/or
• Use some combination of these approaches

Any millage-rate increase, fee, assessment, service reduction, or other budget action would be considered separately through the applicable and established public processes. Some entities may determine no adjustment strategy is needed.

For this reason, the ultimate effect of the proposal may depend not only on the amount of a property owner’s new exemption, but also on the budget and revenue decisions made by each taxing authority appearing on the property-tax bill.

Broadening of the tax base may be another strategy used by some taxing authorities. This could include prioritizing or otherwise encouraging commercial, rental, or other non-homestead development. However, this approach could create additional service and infrastructure costs that would need to be balanced. Any such strategy would need to be consistent with the community’s comprehensive plan, environmental and coastal constraints, infrastructure capacity, and long-term vision. Furthermore, development depends on market conditions, as well as available land. The effect of this proposal on growth is not predictable.

The Town of Orchid is platted and almost entirely built out. No additional growth is estimated, regardless of the outcome of the proposal.

The Florida Legislature’s Revenue Estimating Conference published taxing-authority estimates.

• Revenue Estimating Conference (PDF)

Its July 10, 2026, analysis projects the following reductions in revenue for the Town of Orchid:

• Estimated Reduction Fiscal Year 2026 to 2027: $0
• Estimated Reduction Fiscal Year 2027 to 2028: $23,173
• Estimated Reduction Fiscal Year 2028 to 2029: $47,628
• Estimated Reduction Fiscal Year 2029 to 2030: $53,931
• Estimated Reduction Fiscal Year 2030 to 2031: $60,175
• Estimated Reduction Fiscal Year 2031 to 2032: $66,972

These are state estimates rather than guaranteed results. They depend on future property values, exemptions, residency patterns, millage rates, implementing legislation, and other assumptions used in the state model.

For context, Orchid collected approximately $423,000 in property-tax revenue during the fiscal year ended September 30, 2025, per the Town’s most recent independently audited financial statements. Property taxes generally make up at least 50% of the Town’s regular revenues. About a quarter of regular revenues are restricted to specific uses.

Orchid’s projected dollar impact is comparatively modest based on these official estimates, but the effects are cumulative.

The proposal directs the Legislature to establish by general law a uniform procedure for counties and municipalities to increase the exemption. Because implementing legislation is not available, the potential additional effect on Orchid cannot yet be quantified, but it is helpful to note that more than half of properties in Orchid are currently homesteaded.

Like the boards of all other non-school taxing authorities with jurisdiction in Orchid, the Town Council would need to address any recurring revenue reduction through its annual budget process.

An Orchid property owner pays property taxes to several taxing authorities. A typical tax bill includes levies from the Town of Orchid, but also from Indian River County, the School Board, and a variety of special districts, including Mosquito Control and Water Management. Search for your property’s most recent tax bill to see them all.

The Revenue Estimating Conference projects that the Indian River County Board of County Commissioners would experience reductions of approximately $30,400,000 in 2027 to 2028 and $54,000,000 in 2028 to 2029. Independent special districts in Indian River County are collectively projected to lose approximately $5,700,000 in fiscal year 2027 to 2028 and $10,100,000 in fiscal year 2028 to 2029.

Each taxing authority adopts its own budget and millage rate. Florida law requires a public budget and notice process when a taxing authority establishes that rate, and local governments retain legal authority, within constitutional and statutory limits, to change their millage rates.

Not with certainty. The result will depend on:

• Whether the amendment is approved;
• The property’s future assessed and taxable values;
• Whether the property qualifies for homestead treatment;
• The owner’s Florida residency status under the new provisions;
• Future implementing legislation;
• The millage rates adopted by each taxing authority; and
• Any non-ad valorem assessments appearing on the tax bill.

Property taxes are the Town of Orchid’s principal revenue source and help support the Town’s general operations, services, and ability to respond to local needs, including but not limited to:

• Dune repair and other resilience activities for the physical protection of the community;
• Twice-weekly garage-side trash collection;
• Enhanced recycling collection;
• Maintenance of the Town’s streetlights;
• Staff specifically dedicated to Orchid’s residents and responsive to community needs on a governmental basis, available in a locally accessible Town Hall facility.

Importantly, the proposal does not require the Town to discontinue any particular service.

Because revenues are deposited into the Town’s General Fund, property taxes, which generally make up more than half of all regular revenues, should be understood as supporting the Town’s overall operations rather than being assigned exclusively to particular services. Town services and activities may also be supported by intergovernmental revenues, fees, investment earnings, and other sources.

Property taxes paid to other local taxing authorities may support services such as:

• Law enforcement, fire rescue, and emergency medical services;
• Emergency management;
• Mosquito control;
• Parks and recreation;
• Roads, transportation, traffic management, and public works;
• Growth management and planning;
• Elections;
• Animal control services;
• Natural-resource protection;
• Water-supply planning, water-quality improvements, and flood protection;
• Healthcare-related programs; and
• Community services and programs in support of a wide variety of demographics.

Each taxing authority adopts its own budget and determines how its revenues will be used. Apart from authorizing uses for property taxes, the proposal does not make requirements on local taxing authorities regarding where to make cuts, if those are part of a taxing authority’s funding strategy.

If approved, HJR 1F would become part of the Florida Constitution. The State Legislature could enact implementing laws consistent with the amendment, but a material change to the constitutional requirements ordinarily would require another constitutional amendment approved by at least 60% of Florida voters participating in a referendum.

Florida voters will decide on the amendment at the November 2026 general election, when approval will require at least 60% of the votes cast on the measure to be in favor of it. If that threshold is reached, the principal constitutional changes would take effect on January 1, 2027. Implementing legislation and local budget decisions thereafter would determine many practical details.

In November, we shared with you an overview of financial governance in the Town of Orchid, with a particular emphasis on property taxes.

Additionally, please review the Town’s independently audited annual financial statements for recent years or find the Town’s annual financial reports to the Florida Department of Financial Services. You may also request copies of the monthly financial snapshot reports prepared for Councilmembers and/or monthly bank and investment statements.