Florida Commercial Real Estate Taxes: Amendment 3, the Rent Tax Repeal and What Owners Should Know

Updated November 5, 2026 to cover Amendment 3, approved by Florida voters on November 3, 2026, and the October 1, 2025 repeal of sales tax on commercial rent. Originally published June 30, 2025.

Florida commercial real estate taxes have changed more in the past eighteen months than in the previous two decades. The state repealed its sales tax on commercial rent in October 2025, and on November 3, 2026 voters approved Amendment 3, which rewrites how homestead and non-homestead property is assessed beginning with the 2027 tax roll. For anyone buying, selling, leasing or holding commercial property in Florida, both changes belong in the underwriting.

This guide explains how commercial property taxation works in Florida, what Amendment 3 does and does not do for commercial owners, the status of the commercial rent tax, the exemptions and incentives that may apply, and the questions to raise with your tax advisor before closing.

1. How Commercial Property Taxes Work in Florida

Florida’s property tax is administered at the county level under state guidelines. The county property appraiser assesses commercial property at just value, which represents fair market value as of January 1 each year. Each taxing authority (county, municipality, school district and special districts) then applies its millage rate, the tax per $1,000 of taxable value, and the bill is the sum of those levies.

For example, a commercial building in Miami-Dade County with a taxable value of $2,000,000 and a combined millage rate of 20 mills (2%) carries an annual tax of approximately $40,000. Rates vary considerably by county, municipality and special district, so two similar buildings a few miles apart can carry different bills.

Two features matter most to commercial buyers. First, non-homestead property has an annual cap on assessment increases for non-school levies (10% through the 2026 tax roll, 5% beginning in 2027 under Amendment 3, discussed below). Second, that cap resets on a change of ownership: the property is reassessed at just value in the year after the sale. A buyer should underwrite taxes on the purchase price, not on the seller’s current bill.

Florida does not impose a personal state income tax. Corporate income tax may apply depending on the ownership structure and tax classification, so the entity that holds the property is a decision for your CPA, not an afterthought.

2. Amendment 3: What Changed on November 3, 2026

Florida voters approved Amendment 3, titled “Increased Homestead Exemption; Lower Cap on Increases in Non-Homestead Property Assessments,” with roughly 62% of the vote, clearing the 60% threshold required for a constitutional amendment. It takes effect January 1, 2027, beginning with the 2027 tax roll. Implementing legislation is expected in the 2027 session, so some administrative details may still be refined.

The amendment has four parts:

• Larger homestead exemption for non-school levies. The exemption from county, municipal and special-district taxes rises to $150,000 of assessed value in 2027 and $250,000 in 2028, with inflation adjustments after that. The existing $25,000 exemption that applies to school levies is unchanged; the increase does not apply to school taxes.
• Lower cap on non-homestead assessment increases. The annual limit on increases in the assessed value of non-homestead property, which includes commercial buildings, rental property and vacant land, is cut from 10% to 5% for non-school levies.
• Residency rule for new homeowners. People who were not Florida residents on December 31, 2026 receive the existing exemption when they first qualify, and the increased exemption beginning in their fifth year of residence. Counties and municipalities can shorten that period by a two-thirds vote.
• Limits on how local property tax revenue is used. County and municipal property tax revenue is directed to public safety, education, infrastructure, natural resources, bond debt service, employee retirement benefits and operations, unless general law provides otherwise.

What Amendment 3 means for commercial owners

The 5% cap is the direct benefit. Commercial property is not eligible for the homestead exemption, so the larger exemption does not reduce a commercial tax bill. What commercial owners gain is a slower ramp: once a property is reassessed after purchase, its assessed value for non-school levies can rise no more than 5% a year, rather than 10%, regardless of how fast market values move. For an owner holding through a rising market, the gap between assessed value and just value, and therefore the tax savings, compounds year over year. Note that the cap still resets at sale, so the benefit accrues to the holding period and does not transfer to a buyer.

Millage pressure is the thing to watch. The state’s Revenue Estimating Conference projected that the amendment reduces local government revenue by roughly $5 billion in its first year, approaching $9 billion the following year, with a recurring impact near $12 billion. Local governments that choose to recover some of that revenue can do so only by raising millage rates within statutory limits, and a millage increase applies to every property in the jurisdiction. Because the homestead exemption shields a larger share of residential value, a greater proportion of any rate increase would fall on non-homestead property. Owners should expect more contested budget seasons each summer and should read the TRIM notice every August rather than assuming the bill will track last year’s.

Underwriting checklist for 2027 and after:

• Model year-one taxes at the purchase price times the current combined millage, then grow assessed value at no more than 5% a year for non-school levies (school levies remain uncapped at just value).
• Stress-test the millage rate. A one-mill increase on a $5,000,000 assessment is $5,000 a year.
• For multifamily, note that units occupied by owners as a primary residence are homestead property while rental units are not; a mixed building can carry both treatments.
• For long-held assets, request the property appraiser’s just value and assessed value history. A large gap means a buyer’s bill will step up sharply after closing, which affects pricing.

Sources: Florida Chamber of Commerce, Amendment 3 guide; WUSF, election results; News4JAX, amendment results.

3. Sales Tax on Commercial Rent: Repealed October 1, 2025

For decades Florida was the only state that charged sales tax on commercial rent. That ended on October 1, 2025, when the state sales tax on rent and license fees for the use of real property under section 212.031, Florida Statutes, was repealed (Chapter 2025-208, Laws of Florida). Before the repeal the state rate was 2%, plus any county discretionary sales surtax.

Points that still matter for owners and tenants:

• Occupancy period controls, not payment date. Rent for occupancy periods through September 30, 2025 remains taxable even if paid after October 1, 2025. Rent paid in advance for periods beginning October 1, 2025 or later is not taxable.
• Some rentals remain taxable under section 212.03, F.S.: transient accommodations rented for six months or less, parking or storage spaces for motor vehicles, boat docking or storage at docks and marinas, and aircraft tie-down or storage at airports.
• Leases and operating statements should be updated. Lease clauses that pass sales tax through to tenants, and pro formas that still include it, should be revised. Buyers underwriting a leased property should confirm that trailing income statements do not overstate rent by including tax collected on behalf of the state.

Source: Florida Department of Revenue, Tax Information Publication 25A01-04.

4. Exemptions, Reductions and Incentives

Commercial property does not receive the homestead exemptions available to residential owners, but there are ways to reduce the burden, depending on the property and its location:

• Economic development programs: some cities and counties offer incentives for redevelopment areas, community redevelopment agencies (CRAs) and targeted industries.
• Historic property programs: some jurisdictions offer ad valorem reductions for qualifying rehabilitation of historically designated commercial buildings.
• Green building incentives: certain local governments offer expedited permitting or fee reductions for certified energy-efficient buildings; availability varies by jurisdiction.
• Agricultural classification: land in bona fide agricultural use can be assessed on that use rather than market value, which matters for land held ahead of development. (Amendment 2, which would have exempted farm equipment from tangible personal property tax, fell short of the 60% threshold on November 3 and did not pass.)
• Assessment appeals: owners can petition the county Value Adjustment Board when an assessment exceeds market value. Petition deadlines run from the TRIM notice mailed each August.

Eligibility is determined locally. The Florida Department of Revenue publishes property tax data, forms and millage information, and each county property appraiser publishes its own exemption and appeal procedures.

5. Common Mistakes to Avoid

• Underwriting the seller’s tax bill instead of the reassessed amount after a change of ownership.
• Applying the 5% cap to school levies. The cap on non-homestead assessment increases applies to non-school levies; the school portion of the bill follows just value.
• Assuming uniform rates across counties and municipalities, or assuming rates will hold steady while local governments absorb Amendment 3.
• Overlooking reassessment after improvements or a change in use.
• Misclassifying mixed-use property where commercial, rental and owner-occupied residential components are taxed differently.
• Treating pre-October 2025 rent as tax-free because it was paid late, or leaving sales tax in a current pro forma.

If you are evaluating an acquisition, our guide to evaluating commercial properties in Florida covers how to build taxes into cap rate and return projections.

6. Tax Planning Questions for Investors

These are the questions worth raising with a CPA or tax attorney before closing. GoCommercial coordinates the real estate side of the transaction; your tax advisor determines what applies to you.

• Ownership structure: how the holding entity affects federal and Florida corporate income tax, liability and a future sale.
• Hold period and the 5% cap: whether a longer hold captures more of the assessment-cap benefit under Amendment 3, and how that compares with the reset a buyer will face.
• 1031 exchange: whether a like-kind exchange fits your timeline. See our 1031 exchange guide.
• Cost segregation: whether a study to accelerate depreciation is worthwhile for the asset.
• Property tax history and reassessment: request the history before closing and model the post-sale assessment.

Our advisory services include due diligence support on these items, working alongside your tax and legal advisors.

7. What to Watch in 2027

Three things will shape commercial tax bills over the next two years. The 2027 legislative session will write the implementing statutes for Amendment 3, including how the 5% cap and the new residency rules are administered. Local budget hearings in summer 2027 will show how each county and city responds to the revenue reduction; TRIM notices in August will carry the proposed millage. And county property appraisers will apply the new cap to the 2027 roll, which is the first year the lower cap shows up on a bill. Owners should review every notice rather than assume continuity, and should raise an appeal within the petition window when an assessment exceeds market value.

Final Thoughts on Florida Commercial Real Estate Taxes

Florida has removed a cost no other state imposed, the sales tax on commercial rent, and has now slowed the rate at which commercial assessments can climb. Both are favorable for owners. The offsetting risk is upward pressure on millage as local governments adjust to Amendment 3, which makes the annual TRIM notice and the post-sale reassessment the two numbers every commercial investor should model carefully. Property taxes remain one of the most under-modeled line items in commercial acquisitions, and the rules have just changed.

Looking for guidance on a specific property?
Contact our team to discuss how taxes and other carrying costs affect your next transaction.

This article is general information, not tax or legal advice. Tax treatment depends on your facts; confirm with your CPA or tax attorney. Amendment 3 implementing legislation had not been enacted as of the update date; details may be refined in the 2027 session.