2026 Central Florida CRE Outlook: Improving Fundamentals, Big Policy Questions

As transaction activity shows signs of life, proposed tax reforms could reshape the long-term landscape.

As Central Florida moves toward 2026, commercial real estate fundamentals are beginning to show signs of stabilization and selective opportunity. Transaction activity has started to thaw as interest rates appear closer to a ceiling than a floor, and pricing expectations between buyers and sellers are gradually converging. Industrial, neighborhood retail, and certain specialized office assets continue to attract capital in Central Florida, particularly where demand is supported by population growth, infrastructure investment, and sector-specific employment drivers. While conditions remain uneven by asset type and submarket, investor focus has increasingly shifted from defensive positioning toward carefully underwritten opportunity.

At the same time, a significant policy discussion is taking shape in Tallahassee that could materially affect how local governments fund services and, indirectly, how commercial real estate owners think about long-term risk. Florida lawmakers have introduced a series of proposed constitutional amendments aimed at reducing or eliminating certain property taxes on homestead (primary residence) properties. While these proposals do not apply directly to commercial real estate, they could influence municipal revenue structures and future tax policy decisions. All of the major proposals discussed below would require voter approval in November 2026, making the next election cycle particularly important for property owners and investors to watch.

HJR 201 – Immediate Elimination of Non-School Property Taxes on Homesteads

House Joint Resolution 201 proposes a constitutional amendment that would eliminate all non-school ad valorem property taxes on homestead properties, while leaving school district taxes in place. The stated intent is to provide immediate and substantial property tax relief to homeowners by removing county, municipal, and special-district property taxes on primary residences. If approved by the Legislature, the proposal would appear on the November 2026 general election ballot and, if passed by voters, would take effect on January 1, 2027. As a constitutional amendment, it would require at least 60% voter approval to become law. Official link: https://www.flsenate.gov/Session/Bill/2026/201

HJR 203 – Phased Elimination of Non-School Property Taxes on Homesteads

House Joint Resolution 203 targets the same category of taxes but proposes a gradual phase-out rather than immediate repeal. Under this approach, exemptions against non-school property taxes on homesteads would increase incrementally over a multi-year period, ultimately resulting in a full exemption. The stated intent is to deliver homeowner tax relief while allowing local governments additional time to adjust budgets and long-term revenue planning. Like HJR 201, this proposal would appear on the November 2026 ballot and would require 60% voter approval to amend the Florida Constitution.Official link: https://www.flhouse.gov/Sections/Bills/billsdetail.aspx?BillId=82728

Recent reporting by WPTV highlights growing concern among county and municipal officials as HJR 203 advances in the Legislature. Local government leaders, particularly in rural counties, have warned that a phased elimination of non-school property taxes on homesteads could materially strain local budgets, potentially forcing difficult tradeoffs related to infrastructure maintenance, emergency services, and other public services. Even officials in larger jurisdictions noted that reduced property tax revenue could lead to increased reliance on alternative funding sources, including higher fees or consumption-based taxes, underscoring the uncertainty around how local governments would ultimately adapt if the amendment is approved.

See WPTV Coverage here: https://www.wptv.com/news/state/rural-counties-sound-alarm-as-house-advances-sweeping-property-tax-changes

HB 791 – Sales Tax Increases and Real Estate Transfer Surtax

To address the potential revenue loss associated with the proposed homestead property tax reductions, lawmakers have also introduced companion legislation focused on alternative revenue sources. Florida House Bill 791 is closely linked to the homestead property tax amendments and would increase certain sales and use taxes while also creating a surtax on specified real estate transfers. The bill does not eliminate property taxes, but is structured to take effect only if related constitutional amendments are approved by voters. Based on early bill language and policy commentary, analysts have estimated that the legislation could result in an approximately 3 percentage point increase in the statewide sales tax rate, along with a real estate transfer surtax estimated at roughly 5%. Both figures remain speculative and subject to change pending final legislative language and fiscal analysis.Official link: https://www.flsenate.gov/Session/Bill/2026/791

The Broader Push on Property Taxes

Governor Ron DeSantis has publicly encouraged lawmakers to explore major property tax reform, including the possibility of eliminating or significantly reducing property taxes on primary residences. The proposals currently under consideration reflect that broader policy push, with an emphasis on homeowner affordability. What has not yet been fully defined is how lost local revenue would be replaced, leaving open questions about downstream effects on cities, counties, and special districts across Central Florida.

Potential Shifts in the Tax Burden

Although these proposals apply only to homestead properties, a key unanswered question is how local governments would respond if property tax revenues are materially reduced. It is speculative, but widely discussed among policy analysts, that municipalities could rely more heavily on higher sales taxes, expanded fees, impact charges, or the remaining non-homestead tax base. For commercial property owners and tenants, this raises the possibility that some portion of the tax burden could shift away from homeowners and toward businesses and consumers, even if commercial property tax rates are not directly addressed in the amendments themselves.

Conclusion

For Central Florida commercial real estate, 2026 is shaping up to be a year of improving fundamentals paired with unresolved policy risk. The proposed homestead tax amendments do not directly target commercial properties, but their potential effects on municipal finance, operating costs, and future tax policy merit close attention. As these measures move toward the ballot, commercial owners and investors will be watching not only what is proposed, but how local governments ultimately adapt.