Florida Property Tax After You Buy: The 10 Percent Cap Reset
Florida limits annual increases in the assessed value of non-homestead property to 10 percent, a cap that applies to rental housing and commercial buildings, and that cap resets when the property changes ownership or control. A long-held apartment building can sit far below market value under the cap, and after you buy it, the assessment can jump to full market value in a single step, with the tax bill following.
The law treats property in two groups, since residential property with nine or fewer units falls under one statute and non-residential property, including apartment buildings with ten or more units, falls under another. Both carry the same 10 percent annual limit, and both reset after a qualifying change in ownership or control.
Assessments are set as of January 1 each year, so the reset shows up on the assessment for the first January 1 after your purchase, and the bill follows in the fall. Because closing prorations are usually based on the current year's taxes, which rest on the seller's capped value, your escrow and first-year budget can start well short of the bill that is coming.
Take an apartment building assessed at $3 million under the cap that you buy for $5 million. The cap never applied to school taxes, so that part of the bill was already charged on market value, but the county, city and other non-school levies were charged on the capped $3 million. If the property appraiser sets the new market value near your price, that capped value rises by $2 million in a single year, and at a non-school rate of 12 mills, the tax bill climbs by about $24,000.
Buying the entity that owns the property does not avoid the reset, because a change of control, meaning a transfer of more than 50 percent of the entity's ownership, counts as a change of ownership for these caps. The owner is required to notify the property appraiser when it happens, and failing to report it can leave the owner liable for the taxes that should have been collected, plus penalties and interest, once the appraiser finds out.
Taxes are billed in November and can be paid with a 4 percent discount that month, with smaller discounts through February, after which the full amount is due before the bill becomes delinquent on April 1. On a large tax bill, that early payment discount is real money, and a buyer who budgets for it can recover part of the increase.
Insurance and taxes often rise together on a purchase in the state, since a new owner faces both a reset assessment and a new insurance policy priced on current conditions, and the combined increase can be larger than either one suggests on its own.
Owners can challenge the new assessment through the county value adjustment board, and the deadline to file a petition is short, generally 25 days after the property appraiser mails the notice of proposed property taxes in August. Missing that window locks in the value for the year, so the notice deserves attention the day it arrives.
The cap begins working again once the reset is complete, limiting future annual increases in assessed value to 10 percent for as long as you own the property. That protection grows more valuable the longer you hold, which is also why the reset feels so large to the next buyer after you.
Voters will decide on November 3, 2026 whether to approve Amendment 3, which would lower the annual cap on non-homestead property from 10 percent to 5 percent for non-school taxes beginning January 1, 2027, and it needs 60 percent of the vote to pass. Even if it passes, a change of ownership or control would still reset the property to market value, so the amendment would slow increases after the reset rather than prevent the reset itself.
Before you make an offer, estimate taxes at your purchase price using the current millage for the property's taxing district rather than the seller's bill, and build a reproration or escrow cushion into the contract. If you are buying an entity, confirm the change of control reporting requirement with a property tax professional, and calendar the value adjustment board deadline for your first year of ownership.
The reset value also becomes the base for every year you own the building, since the cap limits increases from that new figure rather than from the seller's old one. I help apartment and commercial buyers build models that carry the reset tax through the hold, with a realistic first bill and the capped increases that follow. If you are pricing a deal here, send the offering and the seller's statements to amer@awadcapitaladvisors.com, and I can help you see how much the reset changes the deal.