Senior economists and local officials in Florida have warned that rising property taxes could put increasing pressure on households, as the state continues to rely heavily on real estate levies in the absence of a state income tax.

Florida is one of nine U.S. states that do not collect personal income tax, a policy long promoted as a draw for residents and businesses. Instead, local governments depend largely on property taxes and sales taxes to fund schools, infrastructure and public safety.

According to the U.S. Census Bureau, property taxes account for more than 40 per cent of local government revenues in Florida, compared with a national average of about 30 per cent.

Home values in the state have risen sharply in recent years. The S&P CoreLogic Case-Shiller index shows that Florida home prices increased by roughly 35 per cent between 2020 and 2023, pushing up tax bills even when rates have remained unchanged. “Even if tax rates stay the same, higher assessed values mean people are paying more every year,” said a county budget official in South Florida.

Florida’s “Save Our Homes” exemption caps annual increases in assessed value for primary residences at 3 per cent, protecting long-term homeowners. However, economists say the policy creates disparities between existing homeowners and new buyers, who face tax bills based on current market values. “When property taxes rise faster than incomes, it becomes a barrier for younger households entering the housing market,” said one housing economist.

Supporters of the system argue that the absence of an income tax keeps Florida competitive. But analysts warn that as population growth strains local services, debates over fairness and affordability in Florida’s tax structure are likely to intensify.

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