Florida Governor Ron DeSantis is making waves with his bold proposal to eliminate property taxes in the state—a move that, if successful, could fundamentally reshape the real estate market. With property taxes generating more than $40 billion annually for Florida’s local governments, the question remains: Who will cover the shortfall, and what does this mean for developers, investors, and property owners?

For those in real estate, this debate presents both risks and opportunities. The elimination of property taxes could drive demand for homeownership and boost property values, but it also raises concerns about how essential services—such as schools, police, and infrastructure—would be funded. If Florida eliminates property taxes without a viable replacement revenue source, the ripple effects could be significant.

How Florida’s Property Tax Plan Could Impact Real Estate Investors

1. Increased Demand for Housing—But at What Cost?

DeSantis argues that property taxes force homeowners to “pay rent to the government” and that eliminating them would provide significant relief, particularly to seniors and middle-class homeowners. In theory, removing property taxes could increase homeownership demand and drive up property values.

However, home prices in Florida have already surged nearly 60% since 2019, far outpacing income growth. With an already-tight housing market, a tax elimination could further inflate prices, making affordability even more of a challenge—potentially creating a speculative bubble.

For investors, this could mean short-term appreciation, but it also raises concerns about market volatility and the sustainability of such price growth.

2. Who Pays for Essential Services?

Property taxes are the backbone of local government funding, covering critical services such as:

• Schools: 50-60% of Florida school district revenue comes from property taxes.

• Police & Fire Departments: Many local departments, such as in Oviedo, are entirely funded by property tax revenue.

• Infrastructure & Public Works: Roads, utilities, and local improvements rely heavily on these funds.

If property taxes disappear, what’s the alternative?

• Florida does not have a state income tax, meaning sales taxes, fees, or alternative funding sources would need to fill the $40+ billion gap.

• The Florida Policy Institute estimates that doubling the state’s sales tax from 6% to 12% would be required to make up for lost property tax revenue—giving Florida the highest sales tax in the nation.

• Increased reliance on fines, fees, and other taxes on businesses could impact commercial real estate and tourism.

For developers and investors, an underfunded public sector could mean declining school quality, infrastructure delays, and reduced municipal services—all of which can negatively impact property values in the long run.

3. The Political and Legal Uncertainty

While DeSantis has made eliminating property taxes a key priority, no state has ever successfully done this, and Florida’s legislature has yet to agree on a concrete plan to replace the lost revenue.

• Some lawmakers have proposed commissioning a study on how to transition away from property taxes before committing to a repeal.

• Others have suggested targeted reductions instead of outright elimination.

• With local governments strongly opposed, legal challenges are almost certain.

For real estate investors, uncertainty is a risk factor—and without a clear replacement funding mechanism, local instability could affect long-term investment prospects.

What Should Developers and Investors Watch For?

1. Legislative Progress – Will DeSantis get enough support to advance this policy? If so, what replacement tax structures will emerge?

2. Market Reaction – If property taxes are eliminated, will demand spike and drive speculative buying?

3. Municipal Response – If local governments lose tax revenue, will they impose new impact fees or alternative taxes that affect property investment?

4. Infrastructure & Public Services – If funding gaps emerge, will local governments cut services, impacting property values?

Final Thoughts: Opportunity or Uncertainty?

The idea of eliminating property taxes is an attractive headline-grabbing proposal, but without a viable alternative revenue source, Florida’s real estate market could face significant disruptions.

For developers and investors, this proposal presents both risks and opportunities:

• Short-term, it could drive demand and increase property values.

• Long-term, it raises serious concerns about funding for infrastructure, schools, and public safety—key factors that impact real estate desirability.

Until Florida provides a clear, sustainable plan, investors should proceed with caution and monitor developments closely.

Would eliminating property taxes help or hurt Florida’s real estate market? Drop your thoughts in the comments!