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What St. Johns County businesses need to know about Amendment 3

Economic Development Public Policy Advocacy

When Florida voters go to the polls for the upcoming general election, they'll consider a proposed constitutional amendment would make significant changes to the Florida's property tax system.

The amendment includes changes to homestead exemptions, non-homestead property assessments, residency requirements and the use of local ad valorem tax revenue. These changes could have implications for businesses, residents, local governments and the entire community.

What it does

  • Expands non-school property tax exemption from $25,000 to $150,000 in 2027 and $250,000 in 2028, with the amount indexed to inflation starting in 2029.
  • This will create two separate homestead exemptions: a larger exemption for non-school property taxes and the existing $25,000 exemption for school property taxes.
  • Allows new Florida residents to receive a smaller exemption until they have lived in the state for 5 years.
  • Lowers the cap on annual assessment increases for non-homestead properties from 10% to 5%, except for school district taxes.
  • Limits counties and municipalities to spending property taxes on public safety, education, infrastructure, natural resource projects and flood control, local bonds, employee retirement benefits, and government operations.
  • Requires the Florida State Legislature to establish a procedure for localities to raise homestead exemptions beyond the constitutional minimum.


Potential impacts for St. Johns County
FOR RESIDENTS

  • Homeowners save money on non-school property taxes.
  • Greater benefit to homeowners in rising property values and increased purchasing power because more home value is exempt.
  • Lower property taxes can improve household cash flow to make homeownership more attainable.
  • Renters may pay more if property owners pass on additional fees or assessments levied by the county or municipalities.
  • Property tax savings could be offset by increased fees or other assessments levied by local government to limit revenue loss.
  • Services like parks and libraries could face cuts, slower expansion or reduced hours.
  • Infrastructure projects like road improvements and maintenance could be deferred or eliminated.

FOR BUSINESSES

  • Lower annual assessment-growth cap (from 10% to 5%) on non-homestead properties (e.g., commercial units, rental units). This could provide greater predictability, improve planning, and free up capital for investment and jobs.
  • Residents may spend tax savings with local businesses.
  • Commercial property owners might not pass along savings to renters/tenants to make housing more attainable.

FOR GOVERNMENT

  • Loss of revenue from property taxes, with an estimated cumulative loss of $830 million by FY2032 for St. Johns County and municipalities.
  • City and county government can face constraints on capital projects and staffing.
  • Reduced revenue could create pressure for greater government efficiency and more focus on core services.
  • May require counties and cities to replace lost revenue through an increased millage rate, new fees or assessments, or other sources.
  • Constitutional restrictions on use of revenue might limit ability of elected officials to respond to local needs.


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