The Florida Senate on Monday released a wide-ranging tax package that includes a directive to study the state’s property tax system and evaluate the feasibility of reducing or eliminating ad valorem taxes on homestead property.
The proposal, Senate Proposed Bill 7034 by the Committee on Finance and Tax, instructs the Legislature’s Office of Economic and Demographic Research to complete the review and deliver a report to lawmakers by November 1, 2025.
The study is required to assess the fiscal impact of major property tax changes, particularly those affecting primary residences, and to develop a range of policy options. According to the bill, the review must include findings on how reductions in property tax revenues could affect local governments and schools, along with recommendations to mitigate those effects. Any options presented may involve statutory changes or proposed amendments to the Florida Constitution.
The bill states that the “primary purpose of the study is to analyze the potential impact of eliminating or significantly reducing ad valorem assessments on homestead property and provide policy options for mitigating negative fiscal consequences.” Analysts are also instructed to consider how essential public services might be preserved in the event of tax base reductions.
Florida’s ad valorem property taxes are a critical source of revenue for counties, municipalities, school districts, and independent taxing districts. Homestead properties benefit from both assessment caps and exemptions, but any effort to reduce or phase out property taxes entirely would require constitutional amendments and the restructuring of how local governments are funded.
Property tax reform has been a recurring topic among legislative leaders and in gubernatorial priorities, with Gov. Ron DeSantis signaling interest in reducing property taxes as part of a long-term economic strategy.
SPB 7034 appropriates $1 million in general revenue to fund the study. The Office of Economic and Demographic Research is authorized to contract with outside experts and must collaborate with the Department of Revenue for data and technical assistance. The report must present multiple policy paths, weighing the trade-offs between tax relief and the continued delivery of services such as public safety, education, and infrastructure.
The study is one of several components in the tax package, which also includes expanded sales tax holidays, new corporate tax credits tied to rural economic development and nonprofit contributions, and limits on how counties may use tourist development tax revenue. The overall package is projected to reduce state and local revenues by $2.13 billion in the upcoming fiscal year.
The Senate Finance and Tax Committee is scheduled to take up the bill this week.
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