2024 General Election: Florida Voters Approve Amendment 5, Adjusting Homestead Tax Exemptions for Inflation. What does this mean for Flagler County, Florida homeowners and other Florida Counties?
On November 5, 2024, Florida voters made their voices heard, with many rallying to the polls to express concerns about economic pressures and financial burdens. Over 66% of voters across Florida supported linking the homestead tax exemption to rising inflation, which has been among the highest in the nation.The amendment, proposed by the Legislature earlier this year, saw a division along party lines. With the passage of Amendment 5, which increases the homestead tax exemption to adjust for inflation, homeowners may see some relief starting in 2025—but this change could also lead to potential budget shortfalls for Flagler County in the future.
Amendment 5’s Impact on Homeowners and Local Budgets:
The Florida homestead tax exemption will now include an inflation adjustment. Starting January 1, 2025, the portion of your primary home’s value that is exempt from property taxes will rise each year based on inflation, helping the exemption keep pace with the cost of living..
For homeowners in Palm Coast and Flagler County, this means you could see gradual reductions in your property tax bill over time as inflation-adjusted exemptions help lower your taxable home value. This is a win for homeowners across Florida. However, keep in mind that this adjustment does not affect the portion of property taxes that goes toward school funding, so school budgets will remain unchanged by this amendment.
Budget Implications for Florida Counties:
Understanding this dynamic is important as it may influence local budget decisions and the future of public services. While this exemption adjustment benefits homeowners, it could lead to a decrease in property tax revenue for Flagler County and other Florida Counties. To offset the potential shortfall, the county will seek to explore how to make up for this shortfall by possibly increasing millage rates (a solution that will not sit well with Flagler County homeowners) or finding alternative revenue sources. This decision could directly impact the funding for essential local services, including emergency response, public parks, and recreational facilities.
Flagler County could consider a few alternative strategies to address potential budget shortfalls from reduced property tax revenue without raising millage rates. Here are some options that you can expect to hear about: