Tax Guide for Florida in the Year 2025
Florida residents celebrated a significant victory in 2025 with the passage of Amendment 5, a ballot measure aimed at increasing property tax breaks for homeowners. More than 66% of voters approved the measure, which adjusts the homestead exemption for property taxes in line with the Consumer Price Index (CPI) or national inflation, starting from January 2025[1][3].
Currently, the homestead exemption allows Florida homeowners to reduce the taxable value of their primary residence by up to $50,000. With Amendment 5, the exemption is no longer capped by the previous 3% annual growth limit or CPI (whichever was lower). Instead, it now moves in tandem with the CPI, helping residents keep pace with inflation costs and potentially reducing tax burdens more effectively over time[1].
The new mechanism for tax relief, tied directly to consumer inflation, reflects the changing economic landscape for Florida homeowners. As of July 1, 2025, Amendment 5’s inflation-linked adjustment to the homestead exemption is in effect[1][3].
Over 4.3 million households are eligible for this exemption annually in Florida[1]. It's important to note that renovations, major property changes, or ownership transfers can impact exemption eligibility and assessed value caps[2]. Other exemptions for seniors, veterans, and widows/widowers can be combined with the homestead exemption[2][3].
Florida's property taxes are relatively low compared to the national average. The average effective property tax rate in Florida is 0.74%, according to the Tax Foundation. The state also does not have a state personal income tax, and residents aged 65 and older can receive an additional homestead exemption from some city and county governments, if they meet certain criteria[1][3].
While Florida's tax on wine and liquor is higher than its neighbours, the tax on beer is relatively low at $0.48 per gallon. The tax on cigarettes is $1.34 per pack, and the tax on other tobacco products is 85% of the wholesale price. The tax on medical marijuana in Florida is 0%, and there are no estate or inheritance taxes in the state[1].
Last year, a Florida tax relief bill was passed, allowing residents to enjoy many items tax-free. The state's gasoline tax is $0.04 per gallon, and the diesel tax is also $0.04 per gallon. Homeowners must apply to receive an additional homestead exemption[1].
Since its implementation, Amendment 5 has not been repealed or modified, and it currently forms a key part of Florida’s property tax relief framework[1][3]. The income limitations for the additional homestead exemption are adjusted annually.
[1] Florida Department of Revenue [2] Florida Division of Florida Condominiums, Timeshares, and Mobile Homes [3] Florida Constitution Online
*Note: This article is intended for informational purposes only. For specific tax-related questions, please consult a tax professional or the relevant government agency.
- The passage of Amendment 5 in 2025 has significantly benefited Florida's business landscape, as it allows for more effective personal-finance management for homeowners by adjusting the homestead exemption in line with inflation.
- In addition to the homestead exemption, Florida offers various other exemptions for seniors, veterans, and widows/widowers, which can be combined to further reduce the tax burden for personal-finance planning.
