Florida may do away with property taxes as home prices soar

• Florida is considering doing away with property taxes. The move, encouraged by Republican Gov. Ron DeSantis, comes as home values rise and insurance costs soar in the state, which has been hit by several hurricanes in recent years. It’s a long shot, though, as eliminating that revenue stream would likely result in a huge spike in sales taxes.

As home prices continue to hit new heights in Florida, legislators are considering a fairly revolutionary tactic to keep the market healthy: Doing away with property taxes.

Should that happen, Florida would be the first state in the country to do so. The big question is: How would the state make up the lost revenue?

To be clear, a full repeal of property taxes is a long shot, though it is under discussion. The Wall Street Journal reports dozens of bills hoping to overhaul the property tax system have been filed with the state legislature and Gov. Ron DeSantis has made it a priority, saying he would like to get a constitutional amendment in front of voters in 2026 which would either abolish or reduce property taxes. (That would need 60% approval from voters to pass.)

Property taxes vary widely across the state, but the average homeowner pays 0.79% of the assessed value of their home. For a home valued at the state median of $385,000, that’s an average bill of $3,041. Add that on top of insurance costs (which can top $8,000 per year in some cities) and it can be overwhelming.

Florida does not charge residents personal income tax, which makes the state more reliant on other forms of income, with a heavy emphasis on property taxes. One study from the Florida Policy Institute estimated the state sales tax would have to be raised to at least 12% should property taxes be eliminated. DeSantis has suggested DOGE-like cuts, eliminating waste and cutting spending by local governments, would help make up the difference.

Among the other ideas legislators have floated include increasing exemptions to lower the taxable value of houses in Florida (including the homestead exemption for someone's permanent residence).

This story was originally featured on Fortune.com