Quite a few of our Michigan clients own homes or condominiums in Florida. Some spend their winters there, while others have made Florida their permanent home.

That’s why a recent change in Florida’s property tax law caught my attention.

On November 3, Florida voters approved Amendment 3, which will provide significant property tax relief for many homeowners beginning in 2027.

The new law increases Florida’s homestead exemption to $150,000 for eligible homeowners. That could mean hundreds or even thousands of dollars in annual property tax savings, depending on the home’s location and taxable value.

But there’s an important catch, especially for Michigan residents who also own property in Florida.

Not every Florida homeowner will qualify.

Why This Matters

First, What Is Florida’s Homestead Exemption?

Florida offers a property tax benefit called the homestead exemption to people who own a home and use it as their permanent residence.

The exemption reduces the value of the home that is subject to certain property taxes.

For example, if your home is worth $400,000 and you qualify for a $150,000 exemption, the taxable value could be reduced to $250,000 for the taxes covered by that exemption.

The lower the taxable value, the lower your property tax bill may be.

What’s Changing in 2027?

Under the newly approved Amendment 3, eligible Florida homeowners will receive an increased homestead exemption of up to $150,000.

Here’s what homeowners should understand:

  • Current Florida homestead owners: If you already qualify for Florida’s homestead exemption, the increase should be applied automatically. You don’t need to file a new application just to receive the increase.
  • When savings begin: The increased exemption should appear on property tax notices in August 2027, with the actual savings reflected in tax bills issued later that year.
  • New Florida residents: People who establish Florida residency in 2027 will generally have to wait five years before qualifying for the higher exemption.
  • Existing Florida residents who rent: People who established Florida residency by December 31, 2026, may qualify for the increased exemption if they purchase a home in the future, provided they meet the other requirements.

The new exemption does not eliminate property taxes entirely.

Homeowners will still pay school property taxes and certain special assessments, such as fees for trash collection and other local services.

What About Michigan Residents Who Own Florida Property?

This is where things get particularly interesting for our clients.

Many Michigan families own a second home or condominium in Florida. They may spend several months there each winter but still consider Michigan their permanent home.

Simply owning property in Florida does not mean you qualify for Florida’s homestead exemption.

Generally, the Florida property must be your permanent residence.

If you live in Michigan and use your Florida property only for vacations or winter visits, you generally won’t qualify for the increased exemption.

On the other hand, if you’ve made Florida your permanent home, you may be eligible.

And that brings up another important issue.

Changing Your Residency Can Affect More Than Property Taxes

For some people, the potential property tax and income tax savings may make Florida residency more attractive.

But establishing Florida as your permanent home involves more than changing your mailing address or getting a Florida driver’s license.

Your residency can affect your income taxes, estate planning, homestead rights, and how your property passes to your family when you die.

For example, Florida has special laws protecting a homestead from certain creditors and restricting how it can be transferred at death in some family situations (short version, very strong homestead protections, but also inheritance restrictions on bypassing a spouse which may cause problems — for example, in a second marriage situation).

Those rules are different from Michigan’s laws.

If you own property in both states, your estate plan should account for those differences.

And if you’re thinking about changing your permanent residence from Michigan to Florida, it’s important to understand the full picture before making that decision.

Will Florida Property Taxes Disappear?

No.

Although Amendment 3 increases the exemption, homeowners will still have property tax obligations.

Florida cities and counties will also receive less property tax revenue because of the change.

That may lead to future discussions about local services, government budgets, and other ways to raise revenue.

Florida lawmakers are expected to address some of these issues in a special legislative session.

So while the new exemption offers potential savings, there may be additional details to work through as the law is put into practice.

If you want to dig in to the details a little deeper, click here to go to Florida’s Chamber of Commerce website that has a good explanation.

Simple Lesson

Owning a home in two states can create opportunities, but it can also make planning more complicated.

A property tax benefit is certainly worth understanding. But decisions about where you establish your permanent residence should also take into account your estate plan, taxes, and long-term goals.

Sometimes a decision that saves money today can create unexpected issues for your family later.

Action Step

If you own a home or condominium in Florida, take a few minutes to check whether it currently qualifies for Florida’s homestead exemption.

If Florida is your permanent residence, confirm that your exemption is properly recorded with your county property appraiser.

And if you own homes in both Michigan and Florida, consider reviewing your estate plan to make sure it works properly in both states.

A little coordination now can prevent confusion and unnecessary expenses for your family later.

If this topic raises questions for you or your family, feel free to call (517) 548-7400 or contact us online: https://www.michiganestateplans.com/contact-us