By Brenden Rendo, Realtor · Updated July 9, 2026
It is affordability season in Florida politics. Proposals in Tallahassee and on the campaign trail promise to eliminate property taxes for most homeowners, paid for by new fees on real estate transactions and higher taxes on "out-of-state investors." As someone who believes markets work better than mandates, I keep asking a question nobody on a debate stage seems to ask: what happened to free markets? I read the fine print of the leading proposals and did the math the way I would for a client at a closing table. Here is what the headlines leave out.
- Leading Florida proposals would eliminate property taxes for most homesteads, funded by a 3% to 5% fee on real estate transactions. That is a 4x to 7x jump over today's 0.7% doc stamps.
- The fee is a tax on moving: roughly $12,750 on a median home sale, hitting downsizing seniors, growing families, and job relocations. Less moving means less inventory, which pushes prices up.
- The "Wall Street" villain owns about 1.7% of Florida's single-family homes and has been a net seller for nine straight quarters. The 5% rate would mostly hit 741,000+ seasonal-home owners and small landlords.
- Eliminating property taxes tends to capitalize into higher home prices, helping current owners and raising the bar for first-time buyers.
- The free-market read: investors already left because profits did. Florida's real cost problem is carry costs, insurance and taxes, not who owns 1 home in 58.
The promise: zero property taxes
The headline versions are genuinely appealing. One leading proposal would create a $1 million homestead exemption, ending property taxes for roughly 95% of Florida homeowners, with exemptions for small businesses and a per-unit break for rental housing. Separately, lawmakers have advanced a measure that would end city and county property taxes on homesteads if voters approve it. The pitch: you should truly own your home, not rent it from the government. As a homeowner, I get the appeal. As a Realtor, my job is to read what is on the other side of the ledger.
Big plans need big pay-fors. The largest proposal replaces roughly $34 billion in property tax revenue with, among other things, real estate transaction fees of 3% on homestead purchases and 5% on non-homestead purchases, higher tourist taxes, and increased millage on "out-of-state investors" who own single-family rentals. That is where the fine print gets expensive.
The fine print: a tax on every move
Florida already has a transfer tax. Documentary stamps run 70 cents per $100, or 0.7% of the sale price, per the Florida Department of Revenue. The proposed 3% to 5% is a four to seven times increase, which would be the heaviest transfer tax in the country. On Florida's median single-family sale price of $425,000, the 3% homestead rate is roughly $12,750, due at closing, every time you buy.
Economists call this a mobility tax, and the research on transfer taxes is unambiguous: they reduce transactions by double digits. People stay in homes that no longer fit: seniors delay downsizing, growing families squeeze, workers turn down jobs across town. Florida already has a lock-in effect from Save Our Homes assessment caps. Stacking a five-figure moving penalty on top means fewer listings, and fewer listings mean higher prices. A plan sold as affordability would make the state's inventory problem worse by design.
Who actually pays (hint: not Wall Street)
The pay-for is marketed as shifting the burden to "out-of-state private equity buying up our homes." Here is the arithmetic problem. Take the claim at face value: institutional investors own about 100,000 single-family rentals in Florida. The U.S. Census Bureau's American Community Survey counts about 5.8 million single-family detached homes in Florida. That is 1.7% of the stock. One home in 58.
Meanwhile the same Census data counts 741,429 Florida homes held for seasonal, recreational, or occasional use. That is 7.4 times the claimed Wall Street footprint, and every one of them is non-homestead. So is every small landlord's rental: national deed-record research finds mom-and-pop investors make up roughly 60% of investor purchases, while true institutions account for about 1% of home sales and have been net sellers for nine consecutive quarters. You cannot raise $20 billion from buyers who are not buying. The 5% rate lands where the transactions actually are: the retired couple from Ohio buying a winter condo, the nurse who owns two rentals, and, at 3%, you, the Florida family buying your next homestead.
Non-homestead owners already pay more, by the way. No homestead exemption, a 10% assessment cap instead of 3%, no portability. They fund schools their kids do not attend. They are not the subsidy problem; they are the subsidy.
The market already solved the investor "problem"
Here is the part that should bother anyone who believes in markets: the sell-off already happened, without a single new tax. Institutional buyers responded to rising insurance, rising taxes, and flattening rents exactly the way markets are supposed to respond. They stopped buying and started selling. Investor purchases in Orlando recently hit their lowest level since 2014. The biggest operators have sold more than they bought for nine straight quarters, and most of those homes go straight to traditional buyers.
Prices are signals. When the profit disappeared, so did the buyers. Proposing a punitive tax on an asset class that is already in retreat is not market correction; it is shooting at a target that left the range. And the mechanism, blame the outside speculator and tax him, is not a conservative idea. It is the same logic as foreign-buyer taxes and rent control, arriving from the opposite direction. Scapegoating capital is scapegoating capital, whoever does it.
Four consequences nobody is talking about
1. Zero property tax means higher home prices. When the annual cost of holding a home drops, buyers bid that savings into the price. Economists call it capitalization. Current owners gain equity; first-time buyers face a higher wall. The plan's headline benefit quietly inflates the barrier it promises to remove.
2. Renters likely pay more. Higher millage plus a 5% acquisition fee on rentals shrinks rental supply as landlords exit and new rental construction pencils out worse. In industry surveys, 90% of single-family rental operators say ownership restrictions would reduce housing supply. Less supply, higher rents, and renters are the least wealthy Floridians in this equation.
3. Stable revenue becomes boom-bust revenue. Property taxes are the steadiest funding source local governments have. Transaction fees are the most cyclical. Home sales are already near multi-year lows; in the next downturn, transactions freeze exactly when police, fire, and school budgets need stability. Cities would trade a predictable base for a revenue stream tied to market mood.
4. The plan is silent on the actual crisis. Florida's cost spiral is concentrated in insurance premiums, condo association fees, and special assessments. A property tax swap does not touch any of it, and the transaction fee adds a new cost on top for anyone trying to move out of an unaffordable situation.
What a free-market fix would actually look like
If the goal is affordability, the market-friendly checklist is not mysterious. Keep attacking the insurance cost stack: litigation reform is already working, with new carriers entering and rate filings flattening, and regulatory steps could push further. Cut the carry costs government controls directly, like the tax on insurance premiums. Speed up permitting and let builders build; supply is the only durable price fix. And if you want to cut property taxes, cut them honestly, with spending discipline, rather than swapping them for a bigger tax on the act of moving.
Free markets are not the obstacle to affordable housing in Florida. Carry costs are. Fix what makes a home expensive to hold and to insure, and the market, which is already correcting prices, price cuts, and investor exits without anyone's permission, will do the rest.
What this means for your next move
None of these proposals is law today. A constitutional change needs 60% voter approval, and the details will move. But if you are planning a purchase or sale in the next few years, the direction of this debate matters: the window before any multi-point transaction fee takes effect is a real financial consideration, and I am tracking every version of these plans as they develop. You can see how the current market is actually behaving, prices, inventory, and negotiating leverage, on our Central Florida housing market hub, updated monthly with primary-source data.
Want the closing-table math on your specific situation, what a sale or purchase costs today versus what these proposals would make it cost? Call or text Brenden Rendo at 407-616-9019, or start with a free home value estimate.
