Florida Could Increase Homestead Exemptions: How Does This Affect Estate Planning?
In late May of 2026, Governor DeSantis announced a new proposal to drastically cut property taxes in the Sunshine State. The measure would increase property tax exemptions to such an extent that many homeowners could completely forget about this financial burden. If this bill passes into law, it may have major implications for estate planning in St. Petersburg.
DeSantis Suggests Raising Property Tax Exemptions to $500,000
Governor DeSantis envisions a future where property taxes are virtually non-existent for most Floridian homeowners. In late May, he suggested that exemptions could eventually reach a level of $500,000, which is more than the value of most homes in the state. If this ambitious plan comes to fruition, property taxes would become a thing of the past for 92 percent of Floridian homeowners.
However, the immediate impact of the property tax proposal would be far more modest. If this bill passes, property tax exemptions would rise from $50,000 to $150,000 by January 1st, 2027. Property tax exemptions would then rise once more on January 1st, 2028, to a total of $250,000. This is expected to eliminate property taxes for 60 percent of Floridian homeowners.
How Do Property Tax Exemptions Affect My Estate Plan in Florida?
Higher property tax exemptions obviously provide you with reduced financial burdens each year. If this bill passes, most Floridians will not have to pay any property taxes at all. This should make it easier to retire and live on a fixed income while minimizing the impact of inflation. However, Florida homeowners still have to contend with rising property insurance costs, which some now describe as a “second mortgage.”
One of the most popular reasons to place a homestead into an irrevocable trust is for Medicaid planning purposes. However, an irrevocable trust strips your personal residence of its homestead status while also eliminating the “step-up in basis” for your beneficiaries when they inherit the property.
If the state eventually eliminates property taxes altogether for the vast majority of Floridians, property owners may need to discuss how this affects their existing trust-related strategies. Some of the more complex irrevocable trusts may no longer be necessary due to these potential changes. Of course, each family’s circumstances are slightly different, and it makes sense to discuss the specifics of each case in more detail with an experienced estate planning attorney.
Can a St. Petersburg Estate Planning Lawyer Help Me?
Drastically increased property tax exemptions in Florida have major implications for estate planning strategies. Retirees or those approaching retirement may enjoy much lower annual tax burdens at a time when greater affordability is a major concern. Property tax changes may also affect various trust-based estate planning strategies in St. Petersburg. Continue this discussion by contacting Drude Tomori Law at 727-300-8900. We serve residents of Lakewood Ranch, Bradenton, and Sarasota.
Sources:
miamiherald.com/news/politics-government/state-politics/article315905790.html
fox13news.com/news/florida-tax-proposal-seeks-eliminate-homestead-property-taxes-2028