Understanding Florida's Tax System
No state income tax, lower property taxes, and a homestead exemption that saves you thousands. Here is everything you need to know about Florida taxes.
$0
State income tax
vs. up to 13.3% in CA
~0.97%
Effective property tax
vs. 2.3% in NJ
$50K
Homestead exemption
Up to $50K off assessed value
$10K+
Avg annual savings
vs. NJ/NY/CT/IL
Florida Has No Personal Income Tax
Florida is one of nine states with no personal income tax. This means no tax on wages, salaries, tips, commissions, bonuses, Social Security benefits, pension income, IRA distributions, 401(k) withdrawals, or investment income. The savings are immediate and permanent.
What Florida Does Not Tax
- Wages and salaries
- Pension and retirement income
- Social Security benefits
- IRA and 401(k) distributions
- Capital gains and dividends
- Inheritance and estate income
- Interest income
What Florida Does Tax
- Tangible personal property tax (business equipment)
- Corporate income tax (5.5%)
- Documentary stamp tax on real estate transactions
- Sales tax (6% state + local surtax)
- Gasoline tax (various state and local taxes)
- Unemployment tax (employer-paid)
Note: Florida does have a corporate income tax, but it does not apply to individuals. The state constitution prohibits personal income tax, making it very difficult to change.
Property Tax Rates by County
Florida's property tax rates vary by county. Here are the effective tax rates for the top 20 most populated counties, based on median home values.
| County | Eff. Tax Rate | Median Home | Annual Tax (Before Homestead) | Annual Tax (After Homestead) |
|---|---|---|---|---|
| Miami-Dade | 1.02% | $525,000 | $5,355 | ~$4,551.75 |
| Broward | 1.08% | $475,000 | $5,130 | ~$4,360.5 |
| Palm Beach | 1.12% | $550,000 | $6,160 | ~$5,236 |
| Orange (Orlando) | 1.02% | $415,000 | $4,233 | ~$3,598.05 |
| Hillsborough (Tampa) | 1.05% | $410,000 | $4,305 | ~$3,659.25 |
| Duval (Jacksonville) | 0.87% | $340,000 | $2,958 | ~$2,514.3 |
| Lee (Fort Myers) | 0.94% | $395,000 | $3,713 | ~$3,156.05 |
| Collier (Naples) | 0.91% | $620,000 | $5,642 | ~$4,795.7 |
| Sarasota | 0.95% | $450,000 | $4,275 | ~$3,633.75 |
| Pinellas (St. Pete) | 1.04% | $400,000 | $4,160 | ~$3,536 |
| Volusia (Daytona) | 0.96% | $325,000 | $3,120 | ~$2,652 |
| Brevard (Cocoa Beach) | 0.88% | $370,000 | $3,256 | ~$2,767.6 |
| Polk (Lakeland) | 0.99% | $310,000 | $3,069 | ~$2,608.65 |
| Seminole | 0.95% | $420,000 | $3,990 | ~$3,391.5 |
| Pasco | 1.01% | $350,000 | $3,535 | ~$3,004.75 |
| Lake County | 0.93% | $370,000 | $3,441 | ~$2,924.85 |
| Marion (Ocala) | 0.86% | $295,000 | $2,537 | ~$2,156.45 |
| St. Johns (St. Augustine) | 0.82% | $480,000 | $3,936 | ~$3,345.6 |
| Alachua (Gainesville) | 0.84% | $320,000 | $2,688 | ~$2,284.8 |
| Leon (Tallahassee) | 0.81% | $290,000 | $2,349 | ~$1,996.65 |
* After Homestead Exemption: estimated 15% reduction for a home at the county median value. Actual savings depend on assessed value and county millage rates.
The Florida Homestead Exemption: Your Biggest Tax Break
The Homestead Exemption is the single most valuable tax benefit for Florida homeowners. Here is how it works.
What Is It?
The Homestead Exemption reduces the assessed value of your primary residence by up to $50,000 before property taxes are calculated. The first $25,000 applies to all property taxes. The second $25,000 applies to all taxes except school district taxes.
Typical savings: $500-$1,000 per year on a $400,000 home, depending on the county.
How to Qualify
- You must be a Florida resident as of January 1 of the tax year
- The property must be your primary residence (you must live in it)
- You must own the property (or have a beneficial interest)
- You can only claim one homestead exemption (you cannot own multiple homesteaded properties)
- You must have a Florida driver's license, vehicle registration, and voter registration
Save Our Homes Cap
Once you have the Homestead Exemption, the Save Our Homes amendment caps the annual increase in your assessed value at 3% (or the rate of inflation, whichever is lower). This means your property taxes will not spike dramatically even if home values in your area skyrocket. Over time, this can save you tens of thousands of dollars.
Deadline: March 1
You must file for the Homestead Exemption by March 1 of the year after you establish residency. If you move to Florida in 2026, you must file by March 1, 2027. Late filing is allowed up to the 25th day after the assessment date but may require a late-filing affidavit.
Pro tip: File as soon as you close on your home. Do not wait until March 1. Many county property appraisers allow you to file online as soon as you have your closing documents.
Step-by-Step Application Process
Establish Florida residency
You must be a Florida resident as of January 1 of the tax year. This means you must have a Florida driver's license, vehicle registration, and voter registration. You must physically occupy the home as your primary residence.
Obtain a Florida driver's license
You have 30 days after establishing residency to get a Florida driver's license. Visit your local FLHSMV office with proof of identity, Social Security number, and two proofs of Florida residency.
Register your vehicles in Florida
You have 10 days after establishing residency to register your vehicles. Bring your out-of-state title, proof of Florida insurance, and your Florida driver's license.
Register to vote in Florida
Register online at RegisterToVoteFlorida.gov or at your local supervisor of elections office. This is one of the strongest proofs of residency intent.
Apply for Homestead Exemption
File your application with the county property appraiser's office by March 1 of the year after you establish residency. You can apply in person, by mail, or online through your county's property appraiser website.
Provide required documentation
You will need: Florida driver's license, vehicle registration, voter registration card, Social Security numbers for all owners, and proof of ownership (closing statement or deed).
Receive your exemption
Once approved, the exemption is applied to your property taxes. It is permanent as long as you maintain the home as your primary residence. The Save Our Homes 3% cap also applies automatically.
Sales Tax: 6% Statewide + County Surtax
Florida has a 6% state sales tax on most goods and services. Individual counties can add a discretionary surtax, which brings the total to 6-8% depending on where you shop.
Typical Combined Rates
- Miami-Dade: 7.0%
- Broward / Fort Lauderdale: 7.0%
- Palm Beach County: 7.0%
- Orange County (Orlando): 6.5%
- Hillsborough (Tampa): 7.5%
- Duval (Jacksonville): 7.0%
- Lee County (Fort Myers): 7.0%
What Is Exempt?
- Most groceries (food for home consumption)
- Prescription medications
- Medical devices
- Most agricultural products
- Textbooks and school supplies
- Prescription eyewear and contact lenses
State-by-State Tax Comparison
See how your current state's tax burden compares to Florida. These are estimated annual savings for a household earning $150,000-$200,000 with a home valued at $500,000-$700,000.
| State | Income Tax | Property Tax | Sales Tax | Est. FL Savings |
|---|---|---|---|---|
| New York | 4.0% - 10.9% | ~1.7% | 4% + local | $12,000 - $20,000+/yr |
| New Jersey | 1.4% - 10.75% | ~2.3% | 6.625% | $12,000 - $18,000+/yr |
| Pennsylvania | 3.07% flat | ~1.5% | 6% | $4,000 - $8,000+/yr |
| Connecticut | 3.0% - 6.99% | ~1.8% | 6.35% | $10,000 - $16,000+/yr |
| Ohio | 0% - 3.5% | ~1.4% | 5.75% | $3,000 - $7,000+/yr |
| Michigan | 4.25% | ~1.4% | 6% | $5,000 - $10,000+/yr |
| Illinois | 4.95% | ~2.1% | 6.25% | $8,000 - $15,000+/yr |
| Massachusetts | 5.0% - 9.0% | ~1.2% | 6.25% | $8,000 - $14,000+/yr |
| California | 1.0% - 13.3% | ~0.8% | 7.25% + local | $10,000 - $25,000+/yr |
Savings are estimates based on typical household income and home values. Your actual savings will depend on your specific income, home value, and lifestyle. These estimates assume a household earning $150,000-$200,000 with a home valued at $500,000-$700,000.
What You'll Actually Pay
Here is a real-world example of how taxes change when you move from New Jersey to Florida.
New Jersey (Bergen County)
Income: $180,000
State income tax: ~$13,500
Property tax (home value $600K): ~$13,800
Sales tax: ~$1,600
Total tax burden: ~$28,900
Florida (Palm Beach County)
Same income: $180,000
State income tax: $0
Property tax (home value $600K after homestead): ~$6,000
Sales tax: ~$1,800
Total tax burden: ~$7,800
Annual tax savings: ~$21,100
That is $1,758 per month that stays in your pocket.
Want to See Your Specific Tax Savings?
I will run your specific numbers and show you exactly what you can expect to save based on your income, home value, and target Florida destination.
Your Next Steps
Now that you understand Florida's tax advantages, here is what to do next.