Florida Home Values Could Rise 7-9% If Property Taxes Are Eliminated

An economic analysis by Realtor.com Senior Economist Joel Berner suggests that eliminating property taxes in Florida could increase home values statewide by 7 to 9 percent. The rationale behind this projection is the reduction of user costs associated with homeownership, which decreases negative future cash flows, thereby raising current home values. This potential policy change comes amid a slight pullback in Florida housing prices following significant increases during the COVID-19 pandemic. Real estate agents in markets from Vero Beach to Boca Raton are already noting early signs of price recovery as seasonal demand intensifies, particularly from seasonal renters and 'snowbirds.' However, experts caution that while property tax elimination and seasonal demand could benefit existing homeowners, it may present affordability challenges for first-time buyers. Rising living costs, including student and credit card debt, compound difficulties in accumulating upfront funds for home purchases, potentially impacting homeownership rates. Any changes to Florida’s property tax system would require legislative approval and voter consent, with no decisions expected for at least another year. These insights are especially relevant for insurance professionals and real estate market stakeholders monitoring regulatory shifts and market dynamics affecting property values and risk assessment in Florida.