Black Swan alert: DeSantis’ property tax gamble could trigger massive recession crash in Sunshine State, expert warns
Florida – Florida is known for its bold political moves, but analysts are concerned that Governor Ron DeSantis’ latest campaign to get rid of property taxes on primary homes might change the state’s housing market and maybe even break it wide open. People who support it say it gives homeowners freedom. But critics say it might be a financial disaster with effects all around the state. One message stands out above the rest for now: the chance of a black swan event is now on the table.
The governor says that homeowners are excessively taxed, saying that paying taxes every year is like “paying rent to the government.” His plan would completely get rid of property taxes on homes that people live in, making Florida more dependent on sales taxes, corporate taxes, and taxes on rentals, second homes, and commercial structures. A lot of people in Florida felt the appeal instantly quickly, especially those who were dealing with rising housing prices, insurance premiums, and taxes.
“It’s almost like they have to pay rent to the government, just to be able to enjoy their property. That’s wrong. We need to do something about it,” DeSantis recently said in a video posted on X. “[People] have their homes paid off and they bought it 30 years ago for a certain amount. Now they’re being told it’s worth so much more and they have to pony up more and more money.”
But new research from experts at Realtor.com shows what could happen almost right away if property taxes were removed. Their estimate says that getting rid of property taxes may raise the value of properties by 7% to 9% across the state, giving homeowners a huge windfall worth $200 to $250 billion. This rise would make things better for people who are currently in the market, but it would make it harder for first-time buyers to buy. Current renters, who are already shut out in many places, would face the most hardship because landlords who continue to be taxed pass on increased expenses directly to their monthly rent.
That’s only phase one. The deeper concern lies further ahead.
Economist Ken Johnson thinks that Florida could gain from a short-term rise in prices. But his warning is serious: if a significant source of income is cut off and the country goes into a recession, Florida may see its budget and housing markets crash at the same time. About 10% of the homes in the state are vacation homes. If the economy goes down, second-home owners may sell their homes, which might flood the market. Prices of homes would drop, tourism dollars would drop, and the state budget, which was now based on a much smaller tax base, may fall at the worst possible time.
In that case, the policy that was supposed to help homeowners could make things worse. A lot of new listings. A fall in pricing. Renters pushed even further to the margins. And a state that is desperate for money at the very moment when it needs it most.
Seven changes to property taxes are already set to possibly be on the 2026 ballot, but DeSantis has turned them down in favor of one big proposal. He wants to get rid of everything, not just some of it or a little part of it. A measure that would change the state’s basic financial structure.
Florida is at a crossroads right now. On one side, there is the promise of quick riches and cheaper taxes. On the other hand, there is a black swan risk that is unlikely to happen but would be very bad if triggered. The Sunshine State may soon decide whether to roll the dice.
