Griffin, Jeff Bezos helped make Miami billionaire magnet: Florida’s $250,000 homestead exemption barely makes a dent | Fortune

Voters approve tax changes

Amendment 3 passed with 62% of the vote, according to the Associated Press. It raises the homestead exemption from $50,000 to $150,000 in 2027 and $250,000 in 2028.

Supporters presented the measure as help for everyday homeowners. Because the exemption is a fixed dollar amount, its effect is larger relative to the value of a typical home than to a billionaire’s property.

Modest savings on mansions

Ken Griffin moved Citadel from Chicago to Miami, while Amazon founder Jeff Bezos moved to Miami in 2023. Bezos has bought a $237 million compound on Indian Creek, known as “Billionaire Bunker,” and is reportedly buying a $69.5 million estate in Golden Beach.

Real estate attorney Raul Gastesi estimated that the expanded exemption would save a homestead owner about $2,085 annually at the statewide average non-school tax rate. A $350,000 home’s local services property tax bill could fall from about $3,135 to $1,050, while a $50 million homestead’s bill would drop from about $524,000 to $522,000. “For the mansion owner, it is a rounding error,” Gastesi said. Michael Ligon of The Ligon Group called it “middle-class relief wearing a luxury headline.”

Second homes may benefit

Amendment 3 also lowers the annual cap on increases in taxable value for second homes, rentals and other properties that are not a primary residence. The limit falls from 10% to 5%, slowing tax growth as property values rise.

Gastesi estimated that, in a market where values rise 8% a year, the new cap could save the owner of a $50 million second home about $15,750 in the first year and roughly $280,000 over five years. Wealthy buyers often own more than one property, making this provision more relevant to them.

Michael Martirena, a South Florida luxury real estate advisor, said the change does not drive his clients’ decisions. He said buyers of $20 million or $50 million homes are drawn by Florida’s lack of state income tax, lifestyle and business climate, while the change registers more with clients holding several properties.

Costs and timing remain

People who are not permanent Florida residents by Dec. 31 start with the existing $50,000 exemption and reach the full amount in their fifth year. Gastesi estimated the delay means about $8,400 in forgone savings.

Abigail Hall, an economics professor at the University of Tampa, said the amendment may affect timing, but likely not destination. Meanwhile, state economists estimate cities, counties and special districts will eventually lose $11.86 billion annually, with no new state funding provided to replace it; Miami-Dade County estimated a first-year loss of roughly $385 million.