Picture two houses on the same street off eastern 30A, with the same floor plan, the same pool, and the same walk to the beach. One has had the same owner for a decade. The other sold last spring. Under Florida law, the second one's taxable value starts over at full market value the January after closing, and the first one's does not. The buyer's tax bill starts from a different number than the neighbor's, and that has nothing to do with the house.
That gap already exists. On Tuesday, November 3, Florida voters decide on Amendment 3. One of its provisions would make that gap grow faster for every second home, vacation rental, and investment property in the state. In Walton County, where most of the property tax base is non-homestead, a buyer will feel it more than almost anywhere else.
The closing is when your tax basis is set
For second homes, rentals, and commercial property, Florida's assessment rule is in Section 193.1555 of the Florida Statutes. Each year, the assessed value used for non-school taxes may rise no more than 10 percent over the prior year's assessed value. The same section says the property "shall be assessed at just value as of January 1 of the year following a qualifying improvement or change of ownership or control."
The statute defines change of ownership broadly. It covers any sale, foreclosure, or transfer of legal or beneficial title. It also covers the cumulative transfer of control, or of more than 50 percent of the ownership, of the entity that owned the property at its last full assessment. A qualifying improvement is one that raises just value by at least 25 percent.
In practice, a long-time owner whose house has appreciated faster than 10 percent a year has a cushion between market value and assessed value. The cushion doesn't transfer to the buyer. Neither does it carry over when a renovation adds a quarter of the home's value, or when an LLC that holds a rental changes majority hands.
The county roll shows how large that cushion can get. In the Florida Department of Revenue's preliminary 2026 figures, Walton County's total just value is $61.94 billion and its total assessed value is $52.85 billion. That is a gap of about $9.1 billion before any exemptions. Part of the gap comes from the Save Our Homes limit on homesteads and part from the non-homestead cap, and the county total doesn't separate the two.
What Amendment 3 would change in the formula
The official 2026 amendment booklet titles the measure "Increased Homestead Exemption; Lower Cap on Increases in Non-Homestead Property Assessments." According to the booklet and the state's Revenue Estimating Conference analysis of CS/HJR 1F, here is how it applies to the kinds of property this market trades in:
| Provision | Current law | If Amendment 3 passes |
|---|---|---|
| Annual cap on non-homestead assessed value, non-school taxes | 10% | 5% |
| Reset to just value at sale or change of control | Yes, under s. 193.1555 | Unchanged by the amendment |
| Second homestead exemption, non-school taxes | Up to $76,411 as of 2026 | $150,000 in 2027, $250,000 in 2028, then indexed to inflation |
| Florida residents as of December 31, 2026 | Not applicable | Receive the larger exemption on the schedule above |
| People who were not Florida residents on December 31, 2026 | Not applicable | $50,000 exemption, indexed after 2027, until the larger exemption begins in their fifth year |
| School district taxes | Not affected | Not affected |
| Effective date | Not applicable | January 1, 2027 |
The booklet also says the amendment would require counties and municipalities to spend property taxes only on a listed set of purposes: public safety, education and schools, infrastructure, natural resources, bond debt service, employee retirement benefits, and operations and administration. Under the Florida Division of Elections, it needs at least 60 percent of the vote to pass.
The amendment doesn't touch the reset at sale. It only shrinks how fast an existing owner's assessed value can climb toward market value.
One strong year, three different outcomes
Here is a simple hypothetical to show how the arithmetic works. Imagine three identical second homes, each assessed at $2,000,000 last year. In a strong market year, just value on all three rises 20 percent, to $2,400,000.
- Long-held home under today's 10% cap. Assessed value rises to $2,200,000. The owner's cushion grows by $200,000.
- Long-held home under a 5% cap. Assessed value rises to $2,100,000. The cushion grows by $300,000.
- The house that just sold. Assessed value resets to the full $2,400,000 the following January, whichever cap is in place.
A lower cap slows growth for owners who stay put. A buyer still resets to market value. Every strong year then adds more to the difference between buyer and neighbor than it would under the current rule. Over several years of appreciation that difference builds on itself, and the purchase becomes the single largest change to a second home's tax bill.
For sellers who have held a long time, a smaller cap also raises the cost of moving within the market. Selling one 30A home to buy another gives up an accumulated cushion and starts the new property at full value.
Why Walton County feels this more than its neighbors
The same rule has very different effects depending on how much of a county's base is homesteaded. At a March 10, 2026 Walton County Board of County Commissioners workshop, Finance Manager Devon Peyton said non-homestead property tax was 66 percent of the county's annual revenue, against 16 percent from homestead property. Those workshop minutes dealt with an earlier proposal, HJR 203. The amendment on the ballot is a different measure, but the revenue mix they describe is Walton's own.
Fire Chief Association President Ryan Crawford made the regional point in a September 23 report from WMBB. He said a sheriff in South Walton would be affected "very differently" than communities like Bonifay or the Panama City beaches, "because they have a much higher percentage of homestead properties."
The state's estimates show the same contrast. The Revenue Estimating Conference's July 10, 2026 analysis puts Walton's countywide non-school impact at $14.0 million in cash for FY 2027-28 and $51.9 million on a recurring basis. Bay County's recurring figure is $44.2 million. Florida TaxWatch totals Walton's estimated impact at $171.1 million across FY 2027-28 through FY 2031-32. The state's analysis models the homestead exemption and the 5 percent cap together and doesn't report a separate figure for each.
How counties are describing their options
Walton's March workshop gave a sense of how little of the budget is flexible. Peyton told commissioners that 77 percent of the property tax budget was mandated or non-reducible. CFO Melissa Thomason said that if constitutional officers' budgets weren't reduced, cuts to each county department would come to roughly 30 percent. Commissioner Anderson asked about the South Walton Fire District, and Thomason said it would be similarly affected.
Next door in Bay County, WJHG reported on September 16 that Deputy County Manager Keith Bryant put the potential loss at about $36 million countywide. Bay was holding its millage at 5.43 mills and looking at special assessments and higher user fees. In an October 20 analysis, the Tax Foundation notes that local governments could raise rates to recover some of the lost revenue, within local millage ceilings. Walton County officials haven't announced any plan to change rates in response to the amendment.
For someone buying a second home here, the open questions are the cap, which slows growth only after you own the property, and whatever local budget choices follow. The reset at closing applies either way.
Relocating full time? The calendar matters
Buyers making a 30A home their permanent residence face a different rule. The booklet says people who aren't Florida residents on December 31, 2026 would receive the existing homestead exemption once they qualify. The increased exemption would start in their fifth year of exemption, "to the extent permitted by the U.S. Constitution." The state's analysis spells out that first tier as a $50,000 non-school exemption beginning in 2027, indexed to inflation after that, for four years.
If the amendment passes, then, when a family establishes Florida residency could affect their non-school tax bill for several years. That depends on the election result, and a family's own residency questions are best answered by a tax professional or attorney.
Quick answers
Does Amendment 3 stop my second home from being reassessed when I buy it? No. The reset to just value after a sale or change of control comes from Section 193.1555, and the amendment doesn't change it.
Does it affect school taxes? According to the official ballot summary and the state's analysis, the exemption changes and the 5 percent cap apply to non-school taxes.
When would it take effect? January 1, 2027, if at least 60 percent of voters approve it on November 3.
Does a renovation trigger a reset? Under current law, a substantially completed improvement that raises just value by at least 25 percent leads to reassessment at just value the following January 1.
This post is general information, not legal, tax, or financial advice. Before acting on any of it, confirm how these rules apply to your property and residency with a qualified tax professional or attorney.
At Cole Blair Group, we model the post-closing tax basis alongside price, rental potential, and 1031 timing for second homes and investment properties along 30A. Whatever happens on November 3, we can walk you through how a specific property's assessment is likely to reset once you own it. Schedule a Private Consultation.
