American billionaires Ken Griffin and Jeff Bezos barely feel Florida's $250,000 tax break

Florida voters have approved a major overhaul of the state's property tax system, but American billionaires such as Ken Griffin and Jeff Bezos are unlikely to notice much difference from its headline tax break.

Amendment 3 passed on Tuesday with 62% of the vote, according to the Associated Press. It raises the homestead exemption on non-school property taxes, the break that applies to a person's main residence, to $150,000 in 2027 and $250,000 in 2028, from $50,000 now. Because the exemption is a flat dollar amount, it does far less for the very wealthy buyers who have turned South Florida into one of the richest enclaves in the US.

Griffin moved the headquarters of his hedge fund, Citadel, from Chicago to Miami after announcing the relocation of his family and firm in June 2022. Bezos, the Amazon.com Inc. founder, moved to Miami in 2023 and has since assembled a $237 million compound on Indian Creek, the guarded island known as "Billionaire Bunker." He is also reportedly buying a $69.5 million oceanfront estate in nearby Golden Beach.

A few thousand dollars

Raul Gastesi, a Miami real estate attorney, calculated that at the statewide average non-school tax rate, the larger exemption will save a homestead owner about $2,085 a year once it is fully in place. On a home assessed at $350,000, the bill for local services would fall to about $1,050 from about $3,135. On a $50 million homestead, it would fall to about $522,000 from about $524,000.

"For the mansion owner, it is a rounding error," Gastesi said. Owners who are not yet permanent residents face a five-year wait for the full exemption, which he estimated would cost them about $8,400 in savings they would otherwise have received.

Michael Martirena, a luxury real estate adviser, said the change is not shaping his clients' decisions. "Someone buying a $20 million or $50 million home in Miami is coming for no state income tax," he said, pointing also to the lifestyle and the business climate. "A few thousand dollars a year, and a five-year wait for the full exemption does not change that math."

Abigail Hall, an economics professor at the University of Tampa, said the measure would affect when wealthy buyers move rather than whether they come. "Amendment 3 may influence timing, but likely not destination," she said.

The cap that matters more

The part of the amendment that matters more to wealthy buyers has drawn less attention. Florida limits how fast the taxable value of second homes, rentals and other property that is not a primary residence can rise each year, and Amendment 3 cuts that cap to 5% from 10%.

In a market where values climb 8% a year, Gastesi estimated, the owner of a $50 million second home would save about $15,750 in the first year and roughly $280,000 over five years. "Where it does register is with clients who hold several properties," Martirena said.

Who pays

Local governments will absorb the cost. State economists estimate that cities, counties and special districts will eventually lose $11.86 billion a year in revenue, and the amendment provides no new state money to make up the difference. Miami-Dade County has estimated it could lose about $385 million in the first year alone.

"There is not a reasonable way for local and municipal governments to fully close these gaps," Hall said.

If councils respond by raising tax rates, even by $1 for every $1,000 of taxable value, the owner of a $50 million homestead would pay about $49,750 more a year, Gastesi calculated. That would wipe out the exemption's savings many times over.