Amazon (AMZN) founder Jeff Bezos paid $237 million for a compound on Indian Creek Island after moving to Miami in 2023, and Citadel's founder Ken Griffin moved the hedge fund's headquarters there from Chicago in 2022. Florida's billionaire magnet is the obvious frame for the property-tax cut the state's voters approved on November 3, and it is the wrong one. The story is not what the cut saves them. It is that a $350,000 house and a $50 million mansion save about the same amount.
Amendment 3, which passed with about 62% of the vote according to the Associated Press, raises the homestead exemption on non-school property taxes from $50,000 to $150,000 in 2027 and to $250,000 in 2028. It also cuts the annual cap on increases in the taxable value of non-homestead property, such as second homes and rentals, from 10% to 5%. Because the exemption is a flat dollar amount taken off a home's assessed value, the savings is a flat dollar amount too, whatever the home is worth.
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Raul Gastesi, a real-estate attorney and co-founder of the Miami firm Gastesi Lopez Mestre & Cobiella, ran the arithmetic for Fortune at the statewide average non-school tax rate, with the exemption fully phased in. A $350,000 homestead's bill for local services falls from about $3,135 to about $1,050, a saving of roughly $2,085 a year. A $50 million homestead's bill falls from about $524,000 to about $522,000. "For the typical family it is real money," Gastesi said. "For the mansion owner, it is a rounding error."
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Those are estimates, and they move with the county. An actual bill depends on the local millage rate and on the home's assessed value under Florida's Save Our Homes cap, so the figures describe the shape of the savings rather than any particular household's tax bill. Michael Ligon, a strategic capital investor with The Ligon Group in Miami, put the shape in one sentence: "Proportionally, this is middle-class relief wearing a luxury headline."
The second half of the amendment is where a $50 million owner comes out ahead. By Gastesi's estimate, assuming 8% annual appreciation, the new 5% cap on growth in taxable value saves a $50 million non-homestead property about $15,750 in its first year and roughly $280,000 over five years. Those savings apply to a second home or an investment property, not the house someone lives in, and it is the one part of the measure whose benefit scales with price.
The cost side has its own numbers. State economists estimate that cities, counties and special districts will eventually lose about $11.86 billion a year, and Miami-Dade County has estimated a first-year loss of roughly $385 million, figures Fortune cites from Florida news reports. The amendment changes what is exempt from local tax; it does not, by itself, provide replacement revenue to the governments that collect it.
That is why the attorney who did the savings arithmetic also issued a warning. "Homeowners should read their tax bills closely next year, because the savings on one line may come back on another," Gastesi said. By his arithmetic, a rate increase of $1 per $1,000 of taxable value would cost a $50 million homestead about $49,750 a year, which is far more than the exemption saves it, and a $350,000 homestead about $100 more a year against its roughly $2,085 saving.
Not everyone gets the full amount on day one. Anyone who is not a permanent Florida resident by December 31 starts at the current $50,000 exemption and does not reach the full exemption until their fifth year; Gastesi estimates a late-arriving owner forgoes about $8,400 in savings over that period. Renters receive nothing directly, because the exemption attaches to owner-occupied homesteads, while landlords benefit from the 5% cap.
Whether either billionaire's Miami property is homesteaded is a matter of county records, and Fortune put no savings figure on Bezos or Griffin; nor does this article. The billionaires are the frame. The mechanism is a flat $250,000 taken off the taxable value of every eligible home, which is why a starter home and a waterfront compound end up with about the same $2,000 in savings, and why the number to watch next year is the rate on the bill, not the exemption.
On the date of publication, Caleb Naysmith did not directly have a position in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.