Amendment 3 Passed. Here's What It Means If You're Moving to Florida

So picture this, two families buy the exact same house, same street, same price. One family becomes a resident on December 31st of this year, the other one two days later. And starting in 2028, the second family is going to pay almost $2,400 more a year in property tax for four straight years. We're talking about the same house. The only difference is going to be the date that they They moved in. And that's what's going on with Amendment 3 and you need to know about it. Because Florida residents passed this amendment this week with 62% of the vote. And the reason that's important is because it needed 60%. Now the headlines are going to read, Florida just cut property taxes, which is true. But if you're moving here, that's not the whole story. So if you're planning to move here to Tampa Bay, whether it's in three weeks, three months, or three years, this video is for you. And by the end, you'll know what Amendment 3 does in plain English. What you'd actually save buying a 300, 600, or even an $800,000 home, how to become a Florida resident, and what this could do to home prices moving forward. And there's one line in the fine print of this amendment that most people are going to miss. And if we've never met before, my name is Juan Alcala and almost eight years ago now my wife Kate and I moved our family of five 1,200 miles south here to the Tampa Bay area and we've been loving it ever since. I'm also a licensed realtor and a team leader here at The True Living Group where we've helped over 200 families make the exact same move. And this amendment has been has been coming up on our Zoom calls all year. And I'll give you a real example. This summer, a couple from Boston asked me straight out. They said, Juan, should we become a Florida resident before the end of the year? A few weeks later, a client who wanted to move to Seminole asked me about the homestead exemption. And these clients were at the opposite end of the price range. One was looking at around $500,000 purchase. The other one was looking up to 1.5 million. Now the thing I want to make sure you understand is I'm not a politician and I don't play one on YouTube so we're not going to talk about the politics of this. I'm not here to tell you whether this was a good idea or a bad idea. All we know is that it passed and my job is to show you what it does to your math. Now let's talk about what you get for just living here. Most people hear that Florida has no income tax and they basically stop there. But it's more than that. It's actually an entire stack of breaks and they work together. And the first one is there is no state income tax. If you're coming from Illinois, that's almost 5% of what you earn. I think 4.95% is the actual income tax in that state. So a household making $150,000 sends the state of Illinois is roughly $7,000 a year just for living there. Here, that number goes to zero. Social security, your pension, your 401k withdrawals. Florida doesn't tax any of that. Number two, there are no estate taxes and no inheritance tax. Number three is the homestead exemption. This is the one amendment three changes. So let me slow down because we're going to get in the weeds here. Your property tax bill is really two bills stapled together. One part pays for public education, the schools, the other part pays for everything else. County, city, fire, police, parks, pensions, all of it. And when Florida is your permanent home, the state takes a chunk of your home's value off the table before it even figures your tax. Today, that's $25,000 off the school part and about $51,000 off of everything else. And it's $51,411 because we just got our tax bill on Monday. Number four, and this is the one that most people sleep on, Save Our Homes Act. Once you're homesteaded, the value they tax you on can only go up a maximum 3% a year or inflation, whichever is lower. And even if the housing market were to go up 10% on a $600,000 home, five years of 5% growth, put your home about $1,300 a year ahead by that fifth year. Now, insurance isn't a tax, but it's going to feel like one, so make sure you run the math and include your insurance cost. Now, as I was saying earlier, these tax breaks stack on top of each other, and Amendment 3 just made one layer a lot thicker, but it's not the way that the headlines make it sound. Remember those two bills we stapled together? Amendment 3 only touches So beginning in 2027, the other part of your bill gets $150,000 exemption instead of that $51,000 exemption. And in 2028, that number goes up to $250,000. After that, it grows with inflation, according to the amendment. Now, remember the school part doesn't get affected. It doesn't move. It's still $25,000 as a discount. So yes, almost everybody still gets a school tax bill and that's a good thing if we want to continue to invest in our future and education. Now the amendment also limits what cities and counties can spend property tax money on. Public safety, schools, roads, flood control, paying off debt, and running the government. Now here's something else to keep in mind. If you own a second home here, or apartment buildings as an example, The yearly cap used to be 10%. They could increase your taxes by up to 10%. The new amendment will limit that to 5% going forward. So it's actually a decrease. So here's the part that nobody knows yet. The state has essentially eliminated $5 billion in revenue to our local governments in 2028 and about $9 billion less every single year after. Now, some counties could raise their taxes in the future. Some could add fees. And fees like trash, stormwater, and CDD fees in newer communities aren't touched by the exemption at all. So every number I'm about to share, you should put an asterisk next to it. But we're going to assume that rates are going to stay where they are today for the sake of this conversation. Now, if you have more questions and you want to go deeper, don't hesitate to reach out to me and the team. We offer a... So let's put real houses on the table because this is where it's going to get interesting. So I ran the numbers on three different houses using 2025 tax bills from unincorporated Hillsborough County. This was right out by Westchase and it works out to be about $18 and 25 cents for every $1,000 of value that the county assesses to that home. And out of that 1825, $6 and 34 cents of that is going to go to the school system. So to keep this example simple, we're just going to I'm going to pretend that each home is valued exactly at what you paid for it. Now in real life, this usually comes in a little bit lower, but I like to be conservative with numbers. Assume the worst case scenario. $300,000, $600,000, $800,000. Now I want you to think back to our numbers, $300,000, $600,000, and $800,000. I want you to think which home is going to save the most money because of this amendment. And almost everyone is going to say the $800,000 home, right? Bigger house should equal bigger savings. But the way that the amendment was designed, they're all going to save the same. About $2,365 a year in 2028 using this scenario. And the reason that's going to happen is because the exemption is a fixed dollar amount, not a percentage. And there were a lot of people that were saying that this was just for the rich. But as you can see, it's not designed that way. So the cheaper the house, the bigger the percentage of this bill that it's actually going to cover every year. On a $300,000 home, your property tax drops from about $4,700 a year to $2,300 a year. That's roughly cutting it in half. On a $600,000 home, it's going to be about 23% lower. On an $800,000 home, it'll be about 17% lower. Now, the Pinellas County Property Appraiser ran their own example with county averages and got about $2,400. Same ballpark. And if you look at that first column, the same $300,000 house as a second home pays roughly about $5,475 on their property taxes. So being a full-time Florida resident in that specific house is worth more than $3,100 a year now. That's the real headline. So if we break the numbers down even further, that $2,365 a year is roughly $200 a month off of your payment. And that could be the difference between feeling tight and giving you more breathing room or purchase power depending on your financial situation. But all this assumes that you actually get the new homestead exemption, which brings us back to the two families So here's how you can take advantage of the amendment. If you're a Florida permanent resident on or before December 31st, 2026, you get the new, bigger exemption. Become a resident any time after December 31st, 2026, and you're going to start with the $50,000 exemption. And it's basically the same version of the homestead exemption we have today, which is still really nice to have. And you'll have to be a Florida resident and keep that home home for four years, and then the big one will kick in on your fifth year. Now, I want you guys to look at the middle column of this table. That's your first four years. And since you can't homestead until the January after you move, your clock is really starting in 2028. Now, in our example, that's about $2,400 more a year or about $9,500 over that four year period. And that's the same for all three of those home prices we discussed earlier, the $300,000, $600,000, and $800,000 properties. Now, here's that line in the fine print that I told you about The date is about becoming a resident, not about buying a house. And this is where people get confused. And I'll use Pinellas County where I live as an example. This is Clearwater, St. Pete area. The Pinellas County property appraiser says, if you establish Florida residency on or before December 31st and buy later, you're still eligible for that bigger tax exemption once you buy and then file for that homestead. This is the caveat that people need to be aware of. You don't have to buy a house by December 31st of 2026. You just have to establish Florida residency. So I'm not telling you you should rush out and buy a house if you're not ready. That's not what this is about. But if you're in the mix and you've been paying attention, now is your time to make a decision. That might be renting. It might be purchasing. But you need to make a decision because right now that clock is ticking and you have about eight weeks. Which raises the obvious question, which is how do you actually become a Florida resident? So let's break it down. For Amendment 3, the legislature still has to spell out what a permanent resident means. And there's already talk that a newcomer rule could get challenged in court, so nobody can promise you exactly what will count yet. But here's what becoming a Florida resident has always looked like. And all you really have to do is think of it as a It's a paper trail that says, I live here now. So let's go step by step. One, we need to actually live here. Two, you need to get a Florida driver's license within 30 days of moving here. And yes, you're going to turn in your old one. Number three, your car. You're going to get Florida car insurance first. Then you're going to go register it with the county that you live in. Number four, register to vote. Number five, you want to file a declaration of domicile with your county clerk. And all this is, is a short little statement that says Florida is your permanent home and there is a small fee attached to it. Number six, move the rest of your life, your mailing address, your bank, doctors, and your address with the IRS. Now, number seven is the homestead exemption. Remember, the other six you can do without owning, if you're filing for the homestead exemption, that's what we're talking about now. So you're going to own a home and live in it on or before December 31st. Then you file with the county property appraiser by March 1st. It's very easy to do. I did it online when we bought our home. Super simple. I think it was done in less than five minutes. Now, on the flip side, the state you're leaving may want proof that you actually left. I'll give you an example. New York and New Jersey take that very serious compared to other states that I've seen, especially if you own a house up there. So make sure that you call your CPA, your county property appraiser before the end of the year. And that brings us to one of the biggest questions that we keep getting from our clients about the amendment is what's all this going to do to home prices? So here's what conventional wisdom would say taxes go down. Homes get cheaper to own, so prices will go up, right? Yes, and there's something to that. You're really shopping for a monthly payment if you're going to use a mortgage rather than buying cash. And if your payments drop by $200 a month, some homebuyers will use that room to pay a little bit more for houses. You can expect that. How much more? Nobody really knows. Now, what's interesting is Realtor.com did a study where they removed taxes entirely. So this is going to be a little bit skewed, but I want to share it with you. They proposed that Florida home values could go up as much as 9%. Now, Amendment 3 only trims just a part of the bill off. It doesn't eliminate it entirely. So the reality is the effect of this is going to be much smaller than a total elimination of taxes would have ever been. And at the time of this recording, the typical single family home here in Tampa Bay sold for about $400,000. $400,000. Which is up a half a percent over last year. So home price appreciation coming into it is basically flat. And I don't see prices running away anytime soon. And the reason for that is, at the time of this recording today, mortgage interest rates on a 30-year conventional mortgage are 7.25%. Which makes the cost of borrowing money pretty expensive. Now here's where I think things get interesting for you specifically. If any of those tax savings get baked into home prices, It happens now and it happens for everybody. But if you become a Florida resident after December 31st, you're going to have to wait five years for your bigger tax break. Now you might be thinking, should you rush out and buy a house right away? No, absolutely not. And here's why. Because $9,500 over four years disappears really fast when you overpay by $20,000 or more for the wrong house in the wrong community. And I don't want anybody I'm working with to ever have to move twice. But if you were already planning to be here in the next couple of months, that's worth a phone call this week. Now, where do prices go from here? I don't know. I think that they will increase. I just don't know by how much. And anybody who tells you they know for sure is genuinely guessing. Listen, y'all, we don't have a crystal ball. One of my favorite quotes is from Ray Dalio, who says, whoever lives by the crystal ball ends up eating glass. And I agree. My professional opinion is telling me that we may see a steady increase, but honestly, with where the market is, I think the market's just going to stay flat over the next six months anyhow. Money is expensive to borrow. If you can pay cash, that changes things for you. But if you are considering moving to Tampa Bay, I want you to watch two things, what homes actually sell for and how long it's taking those homes to sell. And I made an entire video on this last week, breaking down how to read the market. And I think that would be very helpful for you if you're considering making the move here. So let's zoom out here and get the big picture. Amendment three has passed. The everything else part of your tax bill gets a $250,000 exemption by 2028. And the school part doesn't change. You're still going to be paying school taxes. Every homesteaded house over $250,000 in value saves About the same. Which makes it a much bigger deal at $300,000 or $600,000 or $800,000. If you become a Florida resident after December 31st of 2026, you're going to have to wait four more additional years to take advantage of that. And remember, do not overpay on a property to beat that date. So here's something you can do right away that I think is a really great exercise. Look up the home that you like on the county appraiser's website. Find last year's tax bill, this is going to be public information, and imagine that $250,000 more coming off the non-school portion of it. And that's going to be your rough property tax number moving forward. Now, if you want to hand matching the right part of Tampa Bay to how you actually want to live and running the real numbers on taxes, insurance, HOA, and CDD, that's part of that personalized relocation blueprint that I spoke about earlier. The links in the description below, it'll take you to our website. It'll ask you just a few basic questions and then give you personal access to my calendar. And here's the reality of it. You don't need to buy a house. You need to get this right. And that's what me and my team are here to do. Now I'm going to put two more videos up here that are going to help you on this journey, including the one that I spoke about earlier that helps you break down the numbers. If you got any value, don't hesitate to subscribe to this video, hit that like button. And as always, until next time, go out and live that Tampa life.