Florida Amendment 3 and Commercial Property Taxes in 2027

Facts checked November 4, 2026.

What the new 5% assessment cap means for owners and buyers in Palm Beach County, Broward County and Miami-Dade County.

10% → 5%

Annual non-school assessment growth cap for qualifying non-homestead real estate
Beginning January 1, 2027. Total tax bills and reset events are different.

Florida voters approved Amendment 3 on November 3, 2026. As of November 4, the state’s unofficial results show approximately 62% approval, above the required 60%. For an owner or buyer, the practical questions are how much the cap changes the tax estimate and whether a sale or improvement will reset the assessment.

What does Amendment 3 change for Florida commercial property owners?

The amendment changes the growth limit on the assessed value used for non-school levies. Many retail, industrial, office and multifamily properties fall within the non-homestead assessment framework. Eligibility follows the parcel’s classification and circumstances, not the label in a listing or the owner’s business name.

The commercial assessment change at a glance

Issue	Through 2026	Beginning 2027
Ordinary annual assessment-growth limit	10%	5%
Tax levies covered	Non-school levies	Non-school levies
Maximum total tax-bill increase	No general 10% guarantee	No general 5% guarantee
Purchase reassessment	Existing reset rules apply	The lower annual cap does not eliminate those rules

The table describes the ordinary assessment cap, subject to statutory exceptions.

The expanded homestead exemption is a separate benefit. Amendment 3 increases the non-school exemption for qualifying homesteads to $150,000 in 2027 and $250,000 in 2028, with residency and other eligibility requirements. A commercial office building does not receive that exemption simply because its owner lives in Florida. This article focuses on the commercial assessment cap.

Ordinary non-homestead land may also qualify. Agricultural and conservation classifications and tangible personal property follow different rules. A mixed-use property or parcel with a special classification requires a parcel-specific review. Do not assume every investment called “commercial real estate” receives identical treatment.

How are Florida commercial property taxes calculated?

Start with three different values. The just value is the property appraiser’s market valuation. The assessed value reflects applicable assessment limitations. The taxable value is the assessed value after applicable exemptions. School and non-school taxable values can differ.

Ad valorem tax for a taxing authority = taxable value × its millage rate ÷ 1,000.

One mill equals $1 of tax per $1,000 of taxable value. Ten mills equals 1%. Add the applicable authorities’ tax amounts, then account separately for non-ad valorem assessments on the bill.

The 5% limit applies to one part of this calculation. Tax rates can change, school assessments are outside this cap, and non-ad valorem charges are separate. The total bill can therefore increase by more than 5%.

For underwriting, separate the school and non-school portions instead of applying a single assumed rate to a single capped value. Keep non-ad valorem assessments on their own expense line. This makes the model easier to update when actual rates and assessment notices become available.

A $10 million commercial property example

Assume a qualifying property has a 2026 non-school assessed value of $10 million and a 2027 just value of $11 million. Ownership stays the same; there are no additions, qualifying improvements, parcel changes or other reassessment events; and no exemptions apply. Assume the combined applicable non-school rate remains 10 mills, or 1%. This is an illustrative rate, not a quoted rate for any county or parcel.

Illustrative non-school tax comparison only

Calculation	Prior 10% rule continued	New 5% rule
Prior assessed value	$10,000,000	$10,000,000
2027 just value	$11,000,000	$11,000,000
2027 non-school assessed value	$11,000,000	$10,500,000
Tax at assumed 1% non-school rate	$110,000	$105,000

Illustrative difference: $5,000 less than under the prior rule.

$500,000 lower assessed value × 1% = $5,000. But the prior-year non-school tax was $100,000 at the same rate. The new result is still $5,000 more than the prior year. School taxes and other charges are additional and are excluded from this comparison.

The owner pays less than under the old rule, but more than last year. That distinction should stay visible in an operating budget or sale presentation.

The same assumptions across $5 million to $15 million

In each row below, just value is at least 110% of the prior assessed value, so both annual limits would be fully used. All other assumptions from the $10 million example remain the same. These are assessed values, not asking prices or guaranteed purchase valuations.

One-year comparison at an assumed unchanged 1% non-school rate

Prior non-school assessed value	Assessment under 10% rule	Assessment under 5% rule	Illustrative tax difference
$5,000,000	$5,500,000	$5,250,000	$2,500
$10,000,000	$11,000,000	$10,500,000	$5,000
$15,000,000	$16,500,000	$15,750,000	$7,500

These are comparisons with the prior cap, not promises of annual savings. At an assumed non-school rate of 0.8%, the $10 million example produces a $4,000 difference; at 1.2%, it produces $6,000. The parcel’s actual rate and assessment determine the result.

When the cap does not lower your tax bill

If the next just value is $10.3 million and the prior assessed value is $10 million, the lower cap makes no difference. With no other changes, the assessment is $10.3 million under either a 10% or 5% cap because it cannot exceed just value. At the assumed 1% rate, both calculations produce $103,000 of non-school tax. The lower cap creates no additional benefit in this example.

A falling market can produce a different result. Suppose the prior just value was $12 million while the capped assessment was $10 million. If just value falls to $11.5 million, the ordinary 5% calculation can still bring the non-school assessment to $10.5 million. Market value declined, but the assessment increased. The gap between the two values matters. The assessment cannot exceed just value.

A charge outside the non-school ad valorem assessment calculation does not become capped simply because it appears on the same bill. Review each line, particularly school levies and non-ad valorem assessments.

Does the 5% cap apply when you buy commercial property in Florida?

A buyer should not underwrite a purchase by taking the seller’s tax bill and adding 5%. Under Florida’s commercial reassessment statute, a qualifying change of ownership or control generally causes assessment at just value on January 1 of the following year. Statutory exceptions matter.

Purchase example: A seller’s non-school assessed value is $8 million. You purchase the property during 2027. Assume the property appraiser establishes its just value at $10 million on January 1, 2028 and the purchase triggers reassessment.

The new assessment is $10 million, not $8.4 million. At the illustrative 1% non-school rate and with no exemptions, that is $100,000 rather than $84,000. The $16,000 difference illustrates why inheriting the seller’s assessment would be the wrong assumption.

The purchase price alone does not establish the exact future appraiser valuation. Obtain a property-specific estimate. The ordinary annual limitation then applies in subsequent years, subject to exceptions.

Separate the acquisition-year tax allocation from the first full year after reassessment. The purchase contract governs the parties’ tax prorations; it does not determine the property appraiser’s future assessment. Ask the closing team to explain the proration assumptions and any later reconciliation obligations.

For a sale analysis, show both the existing owner’s expense history and the buyer’s estimated expense after reassessment. A buyer needs a credible forward expense model to evaluate net operating income and financing, even when the seller’s current tax bill is accurate.

How do renovations and ownership changes affect the cap?

The annual cap is not a blanket limit on the assessed value added by construction. Under section 193.1555, a substantially completed improvement that increases the property’s just value by at least 25% is a “qualifying improvement” and triggers a reset of the property’s assessment at the next January 1. Other substantially completed changes, additions and improvements generally add their just value to the assessment, subject to statutory exceptions.

Transfers of entity ownership or control can also matter, even if the property remains in the same limited liability company. Combining or dividing parcels may create assessable value. Specialized rules address certain disaster-related replacements. Obtain advice on the actual transaction or construction plan before assuming the annual 5% limit controls the entire result.

For a redevelopment model, separate the current parcel, new improvements and any potential reset. A renovation budget alone is not the statutory test: the qualifying-improvement threshold concerns the increase in just value. Do not substitute construction cost for that valuation determination.

Commercial property taxes in Palm Beach, Broward and Miami-Dade counties

The state assessment change applies across these counties. The actual bill still depends on the parcel, its classifications, taxing district, applicable exemptions and adopted rates. There is no single “South Florida commercial property tax rate” that can accurately price every acquisition.

Official local resources for a parcel-specific review

Location	Start here	What to verify
Palm Beach County	Property Appraiser and tax calculator	Parcel control number, taxing district, separate school and non-school values, and estimated reassessment.
Broward County	Property Appraiser and tax estimator guidance	Use the property-specific record. The generic estimator uses an average rate and excludes non-ad valorem charges.
Miami-Dade County	Property Appraiser and tax estimator	Municipality or unincorporated area, classification, and the estimator’s stated tax-year and eligibility assumptions.

Estimator output is an estimate. Confirm that the tool reflects the relevant tax year and commercial-property circumstances before relying on it.

Boca Raton property taxes inside and outside the city limits

A Boca Raton mailing address does not by itself identify the property’s taxing jurisdiction. Palm Beach County’s municipality codes identify Boca Raton as 06 and unincorporated areas as 00. Verify the parcel record and listed taxing authorities.

The state cap is the same for an otherwise qualifying property in either location. The applicable local levies can differ. Do not compare properties using “Boca Raton” alone or assume an unincorporated address guarantees a lower total bill.

Likewise, “Miami” can describe a city address or a broader market area. Use the parcel’s actual municipality and district, not a marketing description, when comparing Miami-Dade opportunities.

What owners and investors should change in their underwriting

If you already own the property, compare the current assessment with just value, then model the new non-school cap alongside school taxes and other charges. Reconcile the estimate against the next Truth in Millage notice, often called the TRIM notice, and the final bill. The notice and bill serve different purposes.

If you are buying, estimate the post-acquisition assessment before deciding what you can pay. Test future rates and operating costs separately. A lower growth limit after the reset does not remove the reset itself.

If you are selling, present current taxes accurately and disclose the assumptions behind any buyer expense estimate. A favorable existing assessment is useful ownership information, but it should not be marketed as a transferable tax guarantee.

Lower taxes do not always increase landlord net operating income

Review the leases before treating a tax difference as additional net operating income, or NOI. Under a lease that reimburses the landlord for the relevant property taxes, a lower expense may also reduce tenant reimbursements. The effect depends on the actual reimbursement language, expense stops, exclusions, caps and collections.

For example, if an owner pays $5,000 less in taxes but also collects $5,000 less in reimbursements, those two changes offset in NOI. Under a gross lease where the owner bears that expense without a corresponding reimbursement adjustment, the same tax difference may improve NOI. These are simplified lease scenarios, not assumptions about a particular tenant or property.

Before making a buy, hold or sell decision, assemble:

• The parcel record, current assessment notice and most recent tax bill.
• Separate school and non-school taxable values and applicable millage rates.
• A purchase, entity-transfer and improvement history.
• A forward tax estimate that identifies any anticipated reset.
• Executed leases and amendments showing expense reimbursements.
• Current insurance quotes and relevant building, flood, zoning, parking and access information.

Property taxes are one part of a Florida investment decision. Insurance and hurricane exposure, roof and building condition, applicable inspection or recertification obligations, tenant credit, lease rollover, financing and capital spending can outweigh the illustrated tax difference. For land, test the actual permitted use and development assumptions. The amendment alone does not establish that a property is a good investment.

Is this the same as Florida’s commercial rent-tax repeal?

No. Florida’s commercial rent-tax repeal eliminated state sales tax and discretionary sales surtax on commercial rentals covered by section 212.031 for rental or occupancy periods beginning October 1, 2025. That change concerns tax on rent, not the annual ad valorem tax on the real estate. It was not created by the November 2026 amendment.

For example, covered office rent for a current rental period is distinct from the building owner’s property-tax bill. The repeal has exceptions, including certain transient accommodations, motor-vehicle parking or storage, boat docking or storage and aircraft spaces. Payments relating to pre-October 2025 rental periods can remain taxable. Review the actual arrangement rather than assuming every property-related payment is tax-free.