Florida looks to replace property tax with sales tax

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Florida looks to replace property tax with sales tax

DeSantis wants to ban property taxes in Florida

Florida governor calls them “the more oppressive and ineffective” form of taxation

Florida Gov. Ron DeSantis said that he wants to eliminate property taxes in the state.

In a post on X, the governor said that taxing land/property “is the more oppressive and ineffective” form of taxation.

“Property taxes are local, not state. So we’d need to do a constitutional amendment (requires 60% of voters to approve) to eliminate them (which I would support) or even to reform/lower them… We should put the boldest amendment on the ballot that has a chance of getting that 60%… “

Though Florida’s statewide budget mostly comes from the sales tax, property taxes fund critical services like police, fire and schools.

Amir Neto, the Florida Gulf Coast University Director of the Original Economic Research Institute, told ABC Action News that if the source of revenue is lost, you “either have to stop spending the money right, or you need to make up that revenue with something else.”

According to CoreLogic data, the median 2024 property tax in Florida was $3,101, a 9.5% increase over the prior year and up 47.5% from 2019. Property taxes have skyrocketed in South Florida in particular. Median property tax payments in Miami-Dade County have risen 56.8% since 2019, and they’ve jumped 56.8% in neighboring Broward County. Home-price appreciation over that period has been 58.9% and 59.9%, respectively.

Broward experienced an 11.4% year-over-year jump in median property taxes last year and Miami-Dade’s rose by 9.9%.

Nationally, the highest effective property tax rates in 2023 were in Northeast and Midwest states, led by Illinois (1.88%), New Jersey (1.64%), Connecticut (1.54%), New York (1.46%) and Nebraska (1.46%), ATTOM reported.

Northeast states had seven of the 10 highest average property taxes in 2023, Attom reported. New Jersey led the way at $9,488, which was nearly 10 times the average of $989 in West Virginia, the state with the nation’s smallest average levy.

Because of its revenues from tourism, Florida does not have an income tax. Following several expensive hurricanes in recent years, Florida home insurance rates among the highest in the nation. According to Insurify, home insurance premiums rose about 7% in 2024 and are expected to keep rising.

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On the heels of my long, arcane entries about the Massachusetts property tax, etc., comes this:

In an attempt to solve one of the state’s highest-profile problems – high property taxes – the Florida House of Representatives this week proposed eliminating property taxes in favor of a higher state sales tax.

The plan would leave millions of Floridians without a property tax bill, but would require everyone, including tourists, to pay a statewide sales tax rate of 8.5 percent, the highest in the United States.

This would have two positive outcomes: everyone would share in paying taxes to support their governments, not just those who own homes (or rental buildings); and tourists and visitors would pick up more of the tab for paying the state’s bills.

The negative outcome, of course, is that sales taxes are considered “regressive” – those who are poor or on the lower levels of income end up having to pay the tax, which takes up a higher percentage of their income.

Source: Legislature Seeks to Eliminate Property Tax – By Alex Leary and Aaron Sharockman, St. Petersburg Times, by way of Realtor.org