As we approach 2026, Florida residents face significant tax changes that could reshape your financial landscape. From sales tax adjustments in specific counties to potentially transformative property tax relief proposals, understanding these changes isn't just advisable: it's essential for protecting your wealth and making informed financial decisions.
Whether you're a long-time Florida resident or recently relocated to enjoy our tax-friendly environment, these upcoming changes require immediate attention and strategic planning. The decisions you make today will directly impact your tax burden and overall financial position for years to come.
Table of Contents
- Sales Tax Changes Taking Effect January 1, 2026
- Major Property Tax Relief Proposals for 2026
- Understanding the Financial Impact
- Strategic Planning Considerations
- Action Steps for Florida Residents
- Working with Professional Guidance
Sales Tax Changes Taking Effect January 1, 2026 {#sales-tax-changes}
Several Florida counties are implementing sales and use tax rate changes beginning January 1, 2026. These modifications will affect both businesses and consumers, making it crucial to understand how they impact your specific area.
Martin County will experience a decrease in its total sales and use tax rate from 7 percent to 6.5 percent. The new rate consists of Florida's standard 6 percent state sales and use tax plus a 0.5 percent local government infrastructure surtax. This reduction represents meaningful savings for residents making significant purchases.
Palm Beach County residents will also benefit from a rate decrease from 7 percent to 6.5 percent, effective January 1, 2026. This new rate comprises the 6 percent state rate and a 0.5 percent school capital outlay surtax. The decrease results from the repeal of the county's 1 percent infrastructure surtax in April 2025, which was offset by a voter-approved 0.5 percent school surtax that took effect in November 2024.
Jackson County will maintain its existing rate structure through an extension of current surtaxes. The total rate consists of the 6 percent state rate, a 0.5 percent school capital outlay surtax, and a 1 percent small county surtax.
Hillsborough County residents should also prepare for changes, though specific rate adjustments are still being finalized through the legislative process.
For high-net-worth individuals and business owners, these changes require immediate attention to point-of-sale systems, invoicing processes, and tax calculation engines. Counties experiencing rate decreases present particular challenges, as businesses must avoid inadvertently over-collecting taxes at the old rate, which can trigger refund requests and customer disputes.
Major Property Tax Relief Proposals for 2026 {#property-tax-proposals}
The Florida House of Representatives has unveiled eight comprehensive property tax relief proposals, with seven designed as ballot initiatives for November 2026. These proposals represent the most significant potential changes to Florida's property tax structure in decades.
Complete and Phased Elimination Options
House Joint Resolution (HJR) 201 would eliminate non-school homestead property taxes entirely. This represents the most aggressive approach to property tax relief. Alternatively, HJR 203 would phase out these same taxes over a 10-year period, offering a more gradual transition that allows local governments time to adjust their revenue structures.
Age-Based Relief Measures
HJR 205 would exempt Florida residents age 65 and older from paying non-school homestead property taxes. This proposal specifically targets seniors on fixed incomes, addressing a primary concern among retirees who have chosen Florida as their permanent residence.
Enhanced Exemption Structures
HJR 207 creates a new homestead exemption for non-school property taxes equal to 25 percent of the assessed home's value. This proposal benefits both current homeowners and first-time homebuyers, potentially making Florida homeownership more accessible and affordable.
HJR 209 would provide an additional $100,000 exemption for homeowners with property insurance. This targeted relief addresses the increasing cost of property insurance in Florida while incentivizing adequate coverage.
Growth Limitations and Portability Enhancements
HJR 211 would eliminate the cap on portability, allowing greater flexibility in transferring homestead benefits when you move within Florida. This change particularly benefits retirees and others who frequently relocate within the state.
HJR 213 would limit assessed value growth to 3 percent annually for homestead property over three years and 15 percent for non-homestead property over the same period. These caps provide predictable tax increases even in rapidly appreciating real estate markets.
Legislative Process Requirements
House Bill (HB) 215 would require a two-thirds vote for any millage rate increase and allow newly married couples to combine their Save Our Homes benefits. This proposal makes it more difficult for local governments to raise property tax rates while providing additional benefits for married couples.
Important Protections and Limitations
All House proposals maintain taxes that fund schools and include law enforcement protections prohibiting local governments from reducing law enforcement budgets if property taxes are cut. These provisions address concerns about maintaining essential services while providing tax relief.
Constitutional amendments require at least 60 percent voter approval to pass, making the November 2026 ballot crucial for determining Florida's tax future.
Understanding the Financial Impact {#financial-impact}
The implications of these proposed changes extend far beyond individual tax bills. The Florida Policy Institute has identified a potential $43 billion funding gap that could emerge if these proposals pass. This substantial figure suggests local governments may need to identify alternative revenue sources or adjust service levels if property taxes are significantly reduced.
For individual taxpayers, the impact varies considerably based on your specific circumstances. A homeowner with a $500,000 property could see annual savings ranging from $1,250 under the 25 percent exemption proposal to complete elimination of non-school property taxes, potentially saving $3,000 to $5,000 annually depending on local millage rates.
Wealth Management Implications
These tax changes create both opportunities and challenges for comprehensive wealth management strategies. Reduced property taxes increase your property's effective return on investment, while potential service reductions might necessitate private alternatives for certain municipal services.
At Davies Wealth Management, we're closely monitoring these developments to help our clients understand how these changes integrate with their overall financial plans. Property tax relief affects everything from real estate investment strategies to retirement income planning and estate planning considerations.
Strategic Planning Considerations {#strategic-planning}
The potential for significant tax changes requires proactive planning rather than reactive responses. Consider how these changes might affect your overall tax planning strategy, particularly if you own multiple properties or operate businesses in affected counties.
Real Estate Investment Strategy
Property tax relief makes Florida real estate even more attractive from an investment perspective. However, the funding gap created by reduced property taxes might affect property values differently across various municipalities, depending on their ability to maintain services with reduced revenue.
Retirement Income Planning
For retirees, reduced property taxes could free up significant cash flow for other investments or lifestyle expenses. This creates opportunities to reassess your overall retirement income strategy and potentially adjust withdrawal strategies from retirement accounts.
Estate Planning Considerations
Lower property taxes increase the net value of real estate holdings, potentially affecting estate tax calculations and inheritance planning strategies. The enhanced portability provisions also create new opportunities for strategic property ownership transfers.
For detailed discussions about these topics, consider listening to our insights on the Davies Wealth Management podcast, where we regularly address tax planning strategies and their implications for high-net-worth individuals.
Action Steps for Florida Residents {#action-steps}
Immediate Actions for 2026
Monitor the legislative process through the 2025 session to track which proposals advance to the ballot. If you own property or operate a business in Martin, Palm Beach, Jackson, or Hillsborough counties, verify that your tax systems are updated to reflect the January 1, 2026 sales tax changes.
Property Tax Preparation
Develop flexible financial models that account for potential tax changes, whether the 2026 ballot proposals pass or fail. Review your current property tax burden and calculate potential savings under various scenarios to understand the impact on your overall financial position.
Business Considerations
Business owners should examine customer contracts and lease agreements to ensure they address tax rate changes in both directions, particularly for operations in counties with rate adjustments. Point-of-sale systems, invoicing processes, and automated tax calculations require updates to reflect new rates.
Investment Strategy Review
Consider how reduced property taxes might affect your real estate investment strategy and overall asset allocation. The changes could make Florida real estate more attractive relative to other investment options, potentially warranting portfolio adjustments.
Working with Professional Guidance {#professional-guidance}
Navigating these complex tax changes requires expertise in both tax law and comprehensive financial planning. The interconnected nature of tax changes, investment strategies, and long-term financial planning makes professional guidance particularly valuable.
As a fiduciary financial advisor, Davies Wealth Management helps clients understand how these tax changes integrate with their broader financial objectives. We analyze the specific impact on your situation, considering factors like property values, investment strategies, retirement planning, and estate planning goals.
The 2026 tax changes represent both opportunities and challenges that require careful analysis and strategic planning. By understanding these changes now and developing appropriate strategies, you can position yourself to benefit from tax relief while maintaining your long-term financial objectives.
Don't wait until these changes take effect to understand their impact on your financial situation. The time to plan is now, while you still have opportunities to optimize your strategies and ensure you're fully prepared for Florida's evolving tax landscape.
To discuss how these tax changes might affect your specific situation and explore strategic planning opportunities, visit tdwealth.net or contact Davies Wealth Management today. Our expertise in tax planning and wealth management can help you navigate these changes successfully while advancing your long-term financial goals.
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