A guy called me in June about a Jacksonville rental. Three bedrooms, two baths, Westside, listed at $240,000. He had the whole file built out in a spreadsheet, and it was a good spreadsheet. Rent comps, vacancy, a repair reserve, the works.
His tax line was $1,900 a year. He got it off the listing.
I asked him how long the seller had owned it. Nineteen years. I told him to add about $2,400 to the tax line and rerun it, and the deal that had been clearing comfortably went to barely clearing. He was annoyed with me for about ten minutes, which is fair, and then he pulled the property appraiser's record himself and got quiet.
That is the single most common way an out-of-state buyer gets hurt in Florida. Not insurance. Not the roof. The tax line, because the number you are handed belongs to somebody else.
The Seller's Tax Bill Is Not Your Tax Bill
Here is the mechanic, and it is worth knowing cold before you look at another Florida listing.
Florida homesteaders get Save Our Homes, which caps the annual growth in their assessed value at 3% or CPI, whichever is lower. Someone who has owned since 2007 has had that cap suppressing their assessed value for nearly twenty years. Their assessed value can sit at half of what the house is actually worth. On top of that they carry a homestead exemption that knocks value off the taxable base.
Both of those things are theirs. Neither one conveys.
Under Florida Statute 193.1554, non-homestead residential property is assessed at just value as of January 1 of the year following a change of ownership. The Save Our Homes suppression is wiped out. The homestead exemption ends. Your assessed value on that first January 1 is what the property is actually worth, which in most cases is what you just paid for it.
So the $1,900 tax line on the listing was real. It was just a description of the seller's nineteen-year-old cost basis, not a forecast of yours. On that $240,000 purchase the real year-one number is closer to $4,300, and I will trace exactly how in a minute.
One more thing while we are in the statute. Section 193.1556 requires an owner holding property under the cap to promptly notify the property appraiser of a change of ownership or control. Miss it, and if the appraiser later finds that the property was not entitled to the assessment for any year in the prior ten, you owe the taxes you avoided plus 15% annual interest plus a 50% penalty, secured by a recorded tax lien. Direct deed transfers get caught automatically. Where investors trip is entity-level changes, moving a property between LLCs, changing the membership of the LLC that holds title. If you restructure, tell the appraiser.
What Actually Changed in Your Favor
Two things have moved in the Florida investor's direction this year. The insurance line is the one you can bank a little, so start there.
Citizens Property Insurance is cutting rates for the first time since 2015. The Office of Insurance Regulation approved an average 8.8% decrease on homeowners multiperil policies and 5.5% on wind-only, effective July 1, 2026 for new policies and applying to existing policies as they renew.
The depopulation numbers underneath that are more striking than the rate cut. Citizens was down to 278,662 policies in force as of June 2026, from about 1.41 million at the October 2023 peak. Citizens is the state-backed insurer of last resort, so a shrinking Citizens means private carriers are willing to write Florida risk again. That is the actual signal. The Office of Insurance Regulation reported that average homeowners premiums with wind coverage fell in 51 of Florida's 67 counties in 2026.
I am deliberately not going to quote you a statewide average premium. The published figures disagree with each other by thousands of dollars depending on whether they are measuring homeowners or landlord coverage and how they weight the sample. Any number I gave you would be someone's methodology, not your quote.
Direction of travel: good. Magnitude: smaller than the headlines imply, and I will show you exactly how small in the worked example.
The Line in Amendment 3 Nobody Is Covering
Every article written about Florida's November ballot measure is about homesteaders. The homestead exemption for non-school levies goes to $150,000 in 2027 and $250,000 in 2028. That is the story, that is the fight, that is what the ads will be about.
The same amendment does something else that nobody is writing about.
Amendment 3 would lower the annual assessment growth cap on non-homestead property from 10% to 5%. It covers both non-homestead residential and nonresidential property. It applies to ad valorem taxes levied by counties, municipalities and special districts. It does not apply to school districts.
That is a permanent, compounding change to the tax line on exactly the properties you buy.
The specifics, because they matter:
- The measure is CS/HJR 1-F, passed in the special session held June 1 through 3, 2026, with companion bill SB 4-F.
- It appears on the November 3, 2026 general election ballot as Amendment 3.
- It needs 60% approval, not a simple majority.
- If it passes, it takes effect January 1, 2027.
- Florida's Revenue Estimating Conference put the recurring cost of the full package at roughly $12 billion. A House staff analysis estimated the annual revenue reduction to non-school local governments at about $4.6 billion at first, growing to roughly $8.4 billion once fully phased in.
Nothing has changed yet. This is a proposed constitutional amendment that has not been voted on.
There is also active litigation, and you should know what it is and what it is not. On August 4, 2026, a Leon County circuit judge ruled the amendment's ballot title and summary "clearly and conclusively defective" and ordered the Attorney General to rewrite them. The judge did not strike the amendment from the ballot, and state law allows the summary to be rewritten rather than the measure pulled. That fight is about the wording voters will read in the booth. It is not about what the amendment does. The text of the constitutional change itself is unaffected by that ruling, and everything in this post describes the text, not the summary.
And the Reason It's Worth Less Than It Sounds
Now the part that keeps this honest, because there are two limitations and both of them are large.
The first: the cap has never applied to school district levies, and Amendment 3 does not change that.
This is the load-bearing detail and almost nobody states it. Section 193.1554 caps the annual assessment increase "for all levies other than school district levies." School millage is assessed against full just value, every year, forever, no cap, whether you are homesteaded or not and whether or not this amendment passes.
School millage is not a rounding error on a Florida tax bill. In Duval County it runs about 6.343 mills out of roughly 17.86 total. So about 36% of the bill in the example below tracks just value every single year regardless of what voters do in November. The cap, current or proposed, only ever touches the other 64%.
Jacksonville voters have a separate 1-mill school tax on the same November ballot, which is a renewal of a levy first approved in 2022, not a new increase. It is already inside that 17.86. And it is school millage, which is uncapped for non-homestead property either way. Which is the point.
The second: a cap is not a discount. It is insurance against fast appreciation.
This one gets missed constantly. A cap does not reduce your taxes. It limits how fast your assessed value can climb. In any year when just value grows less than 5%, the 10% cap and the 5% cap produce the identical assessed value, the identical bill, and the identical DSCR. The cap is dormant. It costs the county nothing and it saves you nothing.
Amendment 3 pays only in the years Florida runs hot. In the years it doesn't, it is worth zero. Not "a little." Zero.
The Worked Example
Duval County, Jacksonville GSD/USD1 tax district. A Westside or Northside 3/2, deliberately priced below the metro median.
Three driving assumptions. Every other number below derives from these and nothing is hand-set.
| Input | Value |
|---|---|
| Purchase price / just value at acquisition | $240,000 |
| Gross market rent | $1,900/mo |
| Financing | 7.25%, 30-year fixed, 25% down |
That rate is representative for a standard DSCR file, not a lock. DSCR pricing moves with the market and with your credit, LTV and coverage. Get your own quote before you run this math, because every number below is downstream of it. See DSCR ratio and pricing tiers for where a file like this lands on the grid.
Year one, meaning the first January 1 after you close, when the property resets to just value:
| Line | Amount | Derivation |
|---|---|---|
| Loan amount | $180,000 | $240,000 × 75% |
| P&I | $1,227.92/mo | $180,000 at 7.25%, 30-yr fixed |
| Property taxes | $357.20/mo | $240,000 × 17.86 mills = $4,286.40/yr |
| of which, school | $126.86/mo | $240,000 × 6.343 mills, uncapped, forever |
| of which, non-school | $230.34/mo | $240,000 × 11.517 mills, this is what the cap touches |
| Insurance | $216.67/mo | $2,600/yr, illustrative |
| HOA | $0 | |
| PITIA | $1,801.78/mo | |
| DSCR | 1.055 | $1,900 ÷ $1,801.78 |
That insurance figure is illustrative and I want to be clear about it. Landlord quotes in Florida vary materially by roof age, wind mitigation features and distance from water. A 2004 roof and a 2021 roof on the same street are different policies at different prices. Get the actual quote.
This post uses gross rent divided by PITIA, which is standard DSCR underwriting and matches the convention in the rent growth post and the concession window post. Some of our other material applies a vacancy and management haircut first, which produces a lower ratio on the same file.
Note what 1.055 means. That file clears 1.0, but it is thin. It is not landing in a premium pricing tier.
Sensitivity A: what the insurance cut is actually worth
Take the $2,600 premium and gross it back up to where it would have been before the Citizens decrease. At 8.8%, that is $2,850.88 a year.
| Pre-cut | Post-cut | |
|---|---|---|
| Insurance | $2,850.88/yr | $2,600.00/yr |
| PITIA | $1,822.69/mo | $1,801.78/mo |
| DSCR | 1.042 | 1.055 |
The Citizens cut is worth about +0.012 DSCR on this file.
I am stating that plainly because the alternative is overselling it. It is real, it is directional, and it is not the difference between an approval and a decline. If your deal is failing at 0.98, the insurance market did not fix it. Also note I am applying the Citizens homeowners multiperil average to a landlord premium as a proxy for direction. Landlord coverage prices on its own filings.
Sensitivity B: what Amendment 3 is actually worth
Here I hold rent completely flat across all six years, on purpose, to isolate the tax variable. Real rents move. Freezing them is the only way to see what the cap alone does.
Scenario 1, just value grows 5% a year.
Under the current 10% cap and under the proposed 5% cap, the assessed value is identical in every year, because a 5% increase never trips either ceiling. Identical bills. Identical DSCR. Cumulative five-year difference: $0.
That is not a rhetorical flourish. It is the arithmetic. In a normal Florida market, Amendment 3 does nothing for you.
Scenario 2, just value grows 12% a year.
| Year | Just value | 10% cap: tax / DSCR | 5% cap: tax / DSCR | Tax delta |
|---|---|---|---|---|
| 2 | $268,800 | $4,745 / 1.033 | $4,607 / 1.039 | $138 |
| 3 | $301,056 | $5,254 / 1.009 | $4,957 / 1.023 | $297 |
| 4 | $337,183 | $5,818 / 0.985 | $5,339 / 1.006 | $479 |
| 5 | $377,645 | $6,442 / 0.959 | $5,755 / 0.987 | $687 |
| 6 | $422,962 | $7,134 / 0.932 | $6,211 / 0.968 | $924 |
Cumulative five-year tax difference: $2,526. DSCR difference by year six: +0.037.
Watch the 1.00 line. Under the current 10% cap the property drops below 1.00 DSCR in year four. Under the proposed 5% cap it holds above 1.00 through year four and drops below in year five. Amendment 3 buys this file exactly one additional year of coverage, and then the tax line catches it anyway.
The cleaner way to say the same thing is in rent growth, because that is the lever you actually control.
Under the current cap, this property needs 2.51% annual rent growth just to hold its opening 1.055 DSCR through year six. Under the proposed cap it needs 1.72%. Amendment 3 is worth roughly 79 basis points of annual rent growth you no longer have to earn.
That is the honest size of it. Not nothing. Not transformative.
And now the thing that should actually worry you, which is visible in every column of that table and in Scenario 1 too. In every scenario I modeled, DSCR decays over the hold. The tax line compounds while the payment stays fixed. Your P&I is frozen for 360 payments and your taxes are not.
In Florida, rent growth is not upside. It is the requirement.
The Honest Counter-Case
Three things cut the other way, and none of them belong in a footnote.
Premiums fell and they are still the highest in the country. More to the point, Citizens retains statutory authority to levy emergency assessments on Florida policyholders broadly, not only on its own policyholders, if a catastrophic season depletes its reserves. That mechanism is in Florida Statute 627.351. I am writing this in the second week of August, which is the front edge of peak hurricane season. Every insurance number in this post was measured before the season resolved. Treat the improvement as directional. Do not bank it.
Moving roughly $12 billion of tax burden off homesteads has to land somewhere. Counties and municipalities lose a large share of their non-school base. The remaining base is disproportionately non-homestead property, which is you. Amendment 3 also constrains how local governments may spend ad valorem revenue, restricting it to an enumerated list of core functions. What it does not do is stop a county from raising the millage rate. A better cap on assessed value with a higher rate applied to it is a real possible outcome, and so is a better cap with flat rates. I am not going to forecast which. I am telling you the cap governs one side of the multiplication and not the other.
It may not pass. Sixty percent is a genuine threshold, not a formality, and Florida amendments have died in the fifties before. There is organized opposition from local government and school funding groups. Underwrite the deal you can buy today, at today's 10% cap, at today's millage. If Amendment 3 passes, it is a small tailwind on a file that already worked. It is not a thesis.
How to Underwrite a Florida Deal
Practical version. Seven minutes of work that prevents the phone call I described at the top.
Pull the property appraiser's record for the specific parcel. Not the listing's tax figure, not Zillow's. The county property appraiser publishes just value, assessed value, exemptions and ownership history for every parcel. If assessed value is far below just value, you are looking at a homesteaded seller and you now know exactly what is about to reset.
Model year one at full purchase price with no exemptions. No homestead, no Save Our Homes, no cap benefit in year one. The cap does not start protecting you until the year after your reset.
Verify millage by tax district, not by county. Duval is a good example of why. The beaches communities carry their own municipal millage and do not match the Jacksonville GSD/USD1 rate I used above. A county-level average will be wrong for your parcel.
Get the landlord quote before you go under contract. Not after inspection. Roof age and wind mitigation will move that premium more than anything else in your control, and in Florida the insurance number is a deal input, not a closing detail.
Assume your DSCR decays and underwrite the year-four number, not the year-one number. If the file only works at 1.05 going in with flat rents, you are counting on rent growth you have not been promised. If it does not clear at all, no-ratio DSCR is sometimes the answer and sometimes the answer is that you should not buy it.
Talk to a Florida CPA or a property tax professional about your situation. This post describes assessment mechanics. It is not tax advice and I am not your tax advisor.
I will also say the obvious thing about the ballot measure: I am telling you what Amendment 3 would do to a rental property's tax line. I am not telling you how to vote on it.
FAQ
Does Florida's 10% assessment cap apply to investment property? Yes, automatically, for non-homestead residential and nonresidential property. But only for non-school levies. Florida Statute 193.1554 caps the annual increase in assessed value at 10% for all levies other than school district levies, and 193.1555 does the same for nonresidential property. You do not apply for it. School district taxes are assessed against full just value every year with no cap at all, which in Duval County is roughly a third of the total bill.
What happens to property taxes when I buy a Florida rental from a homesteaded owner? The property is reassessed at just value on January 1 of the year following the change of ownership, and the seller's homestead exemption and Save Our Homes protection end with it. A long-held homesteaded property can carry an assessed value far below what it is worth, and that suppressed number is what appears on the tax bill you see during diligence. The seller's tax bill is not a guide to yours. Model year one at full purchase price with no exemptions.
What would Amendment 3 change for investors? If approved by 60% of voters on November 3, 2026, it would lower the annual assessment growth cap on non-homestead property from 10% to 5% for county, municipal and special district levies, effective January 1, 2027. It covers both non-homestead residential and nonresidential property. School district levies are unaffected and stay uncapped. Nothing has changed yet, and a joint resolution that fails at 60% changes nothing at all.
Does a lower assessment cap improve my DSCR? Only in years when just value grows faster than the cap, and only on the non-school portion of the bill. A cap is not a discount. It is insurance against fast appreciation. In the Jacksonville example in this post, the change is worth exactly nothing at 5% annual appreciation, because neither cap binds. At 12% appreciation it is worth about 0.037 DSCR by year six and roughly 79 basis points of annual rent growth you no longer have to earn.
Send Me the Numbers
If you are looking at a Florida deal, send me the address, the asking price and the rent you think it supports. I will pull the tax picture the way it will actually hit you in year one, not the way the listing shows it, and tell you where the DSCR lands. If it does not work I will tell you that too.
We lend in all 50 states, including Florida DSCR. If you want to see how we work a market with real lender data behind it, the New Jersey investment property lender rankings show the methodology.
Dominick Prevete 31 years in real estate finance. Founder, National Loan Provider. 25 Main Street, Unit B, Sparta NJ. (908) 220-6404.
Figures are illustrative. The worked example derives every number from three stated assumptions and holds rent flat to isolate the tax variable. Verify current rates, your parcel's exact tax district millage, and supportable market rent for any specific property before relying on any of it. Duval County millage of 17.86 total and 6.343 school reflects 2025 rates for the Jacksonville GSD/USD1 district; confirm against the Duval County Property Appraiser for your parcel and year. Amendment 3 is a proposed constitutional amendment that has not been voted on and has no legal effect unless approved by 60% of voters on November 3, 2026. Statutory citations are to Fla. Stat. §§193.1554, 193.1555, 193.1556 and 627.351. This is market commentary, not tax advice and not a commitment to lend.
Loans are for business purposes only and are not subject to TILA, RESPA, or HOEPA. Not for primary residences. Equal Housing Opportunity. All loans subject to underwriting approval. Rates and terms shown for illustration; actual rates depend on deal specifics. We do not lend to borrowers with credit below 600 or on owner-occupied properties.
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