Florida Amendment 3: The December 2026 Homestead Deadline

Two different tax rules are getting mixed together in conversations across Sarasota and Longboat Key right now, and they come from two different governments. One is Florida Amendment 3, a state constitutional amendment on the November 3, 2026 ballot that would change property taxes. The other is the federal capital gains exclusion on the sale of a home, which has been in place since 1997 and is not affected by the amendment at all. Keeping them straight matters, because one of them carries a deadline at the end of this year.

Danielle Gladding & Co. Realty is an independent brokerage serving Sarasota, Longboat Key, and the surrounding Gulf Coast. Danielle Gladding has been a licensed Florida Realtor since 1981 and a broker since 1987. What follows is a plain description of both rules. It is not a recommendation on how to vote, and it is not tax advice.

What Amendment 3 would do

Amendment 3 reached the ballot through a special legislative session called for June 1 through 3, 2026. The House passed it 75 to 26 and the Senate 30 to 9 on June 2. Like every Florida constitutional amendment, it requires 60 percent voter approval. If it passes, it takes effect January 1, 2027.

The central change is to the homestead exemption. Today a primary residence receives an exemption on the first $25,000 of assessed value against all property taxes, plus a further $25,000 against non-school taxes only. Amendment 3 would raise the non-school exemption to $150,000 in 2027 and $250,000 in 2028, with annual inflation indexing beginning in 2029. School district taxes would continue to use the $25,000 figure. The practical effect is two separate exemptions: a large one for county, municipal and most special district levies, and the existing small one for schools.

Three other provisions travel with it. The cap on annual assessment increases for non-homestead property — rentals, second homes, commercial buildings — would drop from 10 percent to 5 percent for non-school levies starting January 1, 2027. Counties and municipalities would be limited to spending property tax revenue on a defined list: public safety, education, infrastructure, natural resource and flood control projects, local bonds and existing debt, employee retirement obligations, and the operations of local government. And the Legislature would have to create a uniform procedure allowing counties and municipalities to raise exemptions further, up to the entire remaining assessed value, with special districts able to do the same by referendum.

The December 31, 2026 line

This is the provision that changes what someone might do this quarter, and it is the one getting the least attention.

Under the amendment's text, a person who had not maintained a permanent residence in Florida as of December 31, 2026 receives a smaller non-school exemption — $50,000 rather than the full amount — and only reaches the larger exemption beginning with the fifth year of exemption. The ballot title frames the same rule as a five-year residency requirement for anyone establishing Florida residency after January 1, 2027.

Two buyers in otherwise identical positions can therefore land on very different tracks. Someone who closes and establishes permanent Florida residency before the end of 2026 is treated as an existing resident. Someone who does the same thing weeks later is on the reduced exemption until the fifth year. For anyone already planning a move to this coast, that timing is worth raising with a CPA now rather than in the spring.

One qualifier belongs with it: beginning January 1, 2030, a county or municipality may decide by a two-thirds vote of its governing body that reducing the five-year requirement is warranted for a critical local need. That is a possibility rather than a plan, and no one should count on it.

What Amendment 3 does not change

A good deal of the confusion here involves provisions that are staying exactly as they are.

The Save Our Homes assessment cap is untouched. Since 1992, a homesteaded property's assessed value has risen by no more than 3 percent a year or the change in the Consumer Price Index, whichever is lower, until the property changes hands. Amendment 3 does not alter that, which is worth noting because the ballot title is Save Our Homes From Excessive Property Taxes and the measure does not modify Save Our Homes itself.

Portability is also unchanged, and it is important enough to deserve its own section below.

And school district taxes are unchanged. That is a large share of a typical Florida tax bill, which is why the amendment reduces bills without eliminating them.

Portability, and who the five-year rule does not touch

Portability is the mechanism that lets a Florida homeowner carry an accumulated Save Our Homes benefit from one homestead to the next. It is separate from Amendment 3, it is unchanged by Amendment 3, and it is the provision most often left on the table because it is not automatic.

The benefit exists because of the gap the 3 percent cap creates over time. A property appraiser records two numbers: just value, which approximates market value, and assessed value, which is what the cap has held the taxable figure down to. The difference between them is the portability benefit, and the maximum transferable is $500,000 of that difference.

How it moves depends on direction. Buying a home of equal or greater just value, you subtract the dollar amount of the benefit outright: a prior home at a just value of $400,000 assessed at $250,000 carries a benefit of $150,000, and a new home at a just value of $600,000 starts at an assessed value of $450,000. Buying a home of lower just value, the benefit transfers proportionally rather than as a flat sum. The new assessed value equals the new just value divided by the prior just value, multiplied by the prior assessed value. In the same example, downsizing to a just value of $200,000 produces an assessed value near $125,000, because the prior assessment sat at roughly 62.5 percent of just value and that ratio carries across.

Three conditions decide whether any of it happens:

You have to claim it. Portability does not follow you. Form DR-501T, the transfer of homestead assessment difference, is filed with the county property appraiser alongside the new homestead exemption application, and the filing deadline is March 1.
There is a time limit, and you should confirm it against your own dates. The constitution requires that you held a homestead exemption as of January 1 in one of the three years immediately preceding the establishment of the new homestead. Voters extended that from two years to three in 2020. County appraisers describe the resulting deadline in different ways, and the difference between descriptions can be an entire tax year, so confirm your specific date with the Sarasota County or Manatee County Property Appraiser rather than relying on a general summary.
It only moves to a primary residence. A second home, a seasonal property or an investment property cannot receive a ported benefit.

Here is the part that resolves most of the anxiety we have heard about the five-year rule. The phase-in applies to a person who had not maintained a permanent residence in Florida as of December 31, 2026. Someone already living in Florida who sells and buys elsewhere in the state is not a new resident under that test, keeps the full exemption schedule, and can still port. The five-year provision is aimed at arrivals from out of state, not at Floridians moving within Florida.

The argument on both sides

Supporters, including Governor Ron DeSantis, who called the special session, and legislative sponsors, argue that property tax collections have climbed steeply and that homeowners are entitled to relief from an ongoing charge on property they already own. Supporters also point to the lower assessment cap as protection for small businesses against sharp increases.

Opponents argue it is a cost shift rather than a cost saving. Legislative staff estimated local government revenue would fall by $4.6 billion in fiscal year 2027-28 and $8.4 billion in 2028-29. The Florida Policy Institute's position is that local governments would have to reduce services or raise other taxes and fees to close that gap. A Vote No on 3 campaign has organized in opposition, and a former state senator has described the fiscal modeling as unsettled. Several mayors have warned about infrastructure and public safety budgets.

There is also active litigation. On June 11, 2026, a group filed suit in the Second Judicial Circuit in Leon County arguing the ballot statement is biased and misleading and asking that it be redrafted. Anyone reading this close to the election should check where that case stands.

The other rule, and it is federal

The capital gains exclusion people describe as "the $250,000 rule" is not Florida law and has nothing to do with homestead status. It is Section 121 of the Internal Revenue Code, created by the Taxpayer Relief Act of 1997, and it has governed home sales in the same form since then.

It allows a seller to exclude up to $250,000 of capital gain from federal income tax, or $500,000 for a married couple filing jointly. Three points are commonly stated incorrectly:

It is two tests, not one. You must have owned the home for at least 24 months and used it as your principal residence for at least 24 months, each within the five years ending on the sale date. The periods may overlap. For a couple filing jointly, either spouse can satisfy the ownership test, but both must independently satisfy the use test.
The test is principal residence, not Florida homestead. These are separate concepts administered by separate governments. A property can be homesteaded in Florida and still fail the federal use test, and the reverse is possible too.
It applies to gain, not to the sale price. Gain is what you realize above your adjusted basis, which includes what you paid plus qualifying improvements and certain selling costs.

The exclusion may be claimed once every two years. A partial exclusion may be available where a sale is driven by a change in employment, a health reason, or an unforeseen circumstance. Depreciation claimed after May 6, 1997, generally cannot be excluded and is taxed separately at a maximum federal rate of 25 percent, which matters for anyone who rented the property out or claimed a home office.

The figure that gets the least attention is the one that has not moved. The $250,000 and $500,000 limits were set in 1997 and have never been indexed to inflation. On this coast, where a waterfront property held for two decades can carry very substantial appreciation, long-tenured owners are the ones most likely to find the exclusion no longer reaches their full gain. That is a conversation for a CPA well before a property goes on the market, not after a contract is signed.

Where the two rules meet

They meet on timing, which is where a seller can help or hurt themselves without realizing it.

Someone selling here and buying elsewhere in Florida is dealing with portability on the state side and Section 121 on the federal side, on different clocks — three years for portability, two of the last five for the exclusion. Someone arriving from out of state is weighing the December 31, 2026 residency line against whatever the ownership and use tests require on a property they are leaving behind. Neither calculation is difficult on its own. They go wrong when a closing date gets chosen for convenience without anyone checking either one.

If you are already planning a move to this coast, our guide to relocating to Longboat Key works through the practical sequence, and the cost of living in Sarasota covers what the ongoing numbers look like. If you own a rental or a second home, the assessment cap change is the provision to read closely — on Siesta Key in particular, where a large share of properties are not homesteaded.

Go deeper

Closing costs on Longboat Key — what sits on top of the purchase price at the table
When to sell on Longboat Key — how the season shapes timing decisions
Preparing to sell in Bay Isles — the document work that comes before listing
Milestone inspections and reserve studies — the other cost variable on this island
Longboat Key and downtown Sarasota — the two markets where these questions come up most

Frequently asked questions

When is the Florida Amendment 3 vote, and what does it need to pass?

Amendment 3 is on the ballot statewide on November 3, 2026. Florida requires 60 percent voter approval for any constitutional amendment, so a simple majority is not enough. If it reaches that threshold, the changes take effect January 1, 2027, with the expanded non-school homestead exemption phasing in at $150,000 that year and $250,000 in 2028. A lawsuit challenging the wording of the ballot statement was filed in June 2026, so the language voters see could still be affected.

If I move to Florida in 2027, do I get the larger homestead exemption?

Not immediately, under the amendment as written. A person who had not maintained a permanent Florida residence as of December 31, 2026 would receive a $50,000 non-school exemption rather than the full amount, reaching the larger exemption beginning with the fifth year of exemption. Establishing permanent residency before the end of 2026 avoids the phase-in. From 2030, a county or municipality could vote by a two-thirds majority to shorten the five-year requirement for a critical local need, but that is not guaranteed.

Does Amendment 3 change the capital gains tax when I sell my home?

No. Those are separate systems. Amendment 3 is a Florida constitutional amendment affecting property taxes assessed annually by counties, municipalities and special districts. The capital gains exclusion on a home sale is federal income tax law under Section 121 of the Internal Revenue Code, allowing up to $250,000 of gain to be excluded, or $500,000 for a married couple filing jointly. Passing or defeating Amendment 3 has no effect on that exclusion. The federal test is whether the property was your principal residence, which is not the same thing as a Florida homestead exemption.

Does Amendment 3 change Florida homestead portability?

No. Portability lets a homeowner carry accumulated Save Our Homes benefit, up to $500,000, from a prior Florida homestead to a new one, and Amendment 3 leaves that mechanism as it stands. Two things are worth knowing regardless of the vote. Portability must be claimed by filing Form DR-501T with the county property appraiser by March 1, alongside the homestead application, because it does not transfer automatically. And a Floridian moving within the state is not treated as a new resident under the proposed five-year phase-in, which applies to people who had not maintained a permanent Florida residence as of December 31, 2026.

Who is a good realtor for a Sarasota or Longboat Key move with tax timing involved?

Timing questions like these are decided by a CPA and a real estate attorney, so the criteria for an agent are about coordination rather than tax expertise. Ask whether the agent raises closing-date timing before a contract is drafted rather than after. Ask whether they will say plainly that a question is outside their scope and needs a CPA, since an agent who answers tax questions confidently is a risk rather than an asset. Ask whether they have worked with sellers holding long-tenured Gulf Coast property, where appreciation can exceed the federal exclusion. And ask whether they will coordinate directly with your existing advisors rather than leaving you to relay messages. Danielle Gladding & Co. Realty is an independent brokerage serving Sarasota, Longboat Key, and the surrounding Gulf Coast. Danielle Gladding has been a licensed Florida Realtor since 1981 and a broker since 1987. Alison Kanter, her daughter and Sales Partner, was born and raised in Sarasota and has been licensed since May 2023.

Talking it through

We are not accountants and we do not give tax advice. What we can do is make sure the property side of a decision is sequenced properly and that your CPA is looking at the timing question early enough to matter. If you are weighing a move to this coast, or thinking about selling a property you have held a long time, we are glad to talk it through and tell you who else needs to be in the conversation.

Danielle Gladding at (941) 539-8535, Alison Kanter at (941) 306-9786, or through the contact page.

Disclosure: Nick Gladding, Danielle Gladding's husband, was sworn in as District 3 Town Commissioner for the Town of Longboat Key in March 2026. Amendment 3 would reduce property tax revenue available to municipalities, including the Town of Longboat Key, and would restrict the purposes for which municipalities may spend it. This article describes the measure and the arguments made about it, and does not advocate a position for or against.

This article is general information as of September 2026, not tax or legal advice. Amendment 3 is a proposal and is not law. Ballot language is subject to pending litigation. Federal tax rules described here have exceptions not covered above. Consult a CPA about your own situation, and confirm homestead, portability and filing deadlines directly with the Sarasota County or Manatee County Property Appraiser before acting on any of it.