Own a Florida Rental Through an LLC? When Amendment 3’s 5% Cap Resets, and the 50% Penalty

Amendment 3 passed on November 3, 2026, and most of the coverage has been about the bigger homestead exemption. The other half matters just as much to anyone who owns a Florida rental, second home or commercial building: the cap on how fast the assessed value of non-homestead property can rise drops from 10% a year to 5% a year for non-school taxes, starting in 2027 (Kaufman Rossin, updated Nov. 3, 2026; Florida Chamber, Nov. 4, 2026).

A tighter cap means a bigger gap between what the property is worth and what it is taxed on. That gap is a real asset, and it disappears the year after a change of ownership or control. For the many Florida rentals held in an LLC, that trigger is not just a deed. It is also a sale of more than half of the company, even if the deed never changes, and the penalty for not reporting it is steep.

The short version: we replayed the last ten years of typical home values in 66 Florida counties under both caps. Under the old 10% cap, the assessed value of a typical rental bought in 2015 would have caught all the way up to market by 2025 in 52 of 66 counties, so a sale cost the owner nothing extra in tax. Under a 5% cap, a median of 24% of the value ($77,820) would still be off the non-school roll in 2025, and a reset would raise the non-school tax bill by a median of $741 a year. In 15 counties the jump tops $1,000. In Duval it is $829.

That number is the cost of a reset. Below is what triggers one, why LLC owners can set one off without noticing, and what happens if nobody tells the property appraiser.

What Amendment 3 changed for non-homestead property

Florida already caps assessment growth on property that is not a homestead. Residential property with nine or fewer units falls under s. 193.1554, Florida Statutes, and commercial and other non-residential property under s. 193.1555. Both capped annual increases at 10% for non-school levies. Amendment 3 lowers that limit to 5%. School taxes on non-homestead property remain uncapped, as they were before.

Two things did not change. First, the cap only matters in years when market value rises faster than the cap. In a flat or falling year, the assessed value simply tracks the market. Second, the cap resets: on the January 1 after a change of ownership or control, the property is reassessed at its full just value and the cap starts over from there (Kaufman Rossin, Nov. 3, 2026). The amendment shrank the yearly allowance, so the value that can pile up under it, and come off it at a reset, gets larger.

Governor DeSantis has said he will call a special session before his term ends in early January to set out how the amendment is implemented, and no date had been set as of the latest reports (Florida Realtors / News Service of Florida, Nov. 5, 2026). Nothing announced so far changes the reset rules, but check for updates before you close a deal that depends on them.

To see the cap on your own property over 5 to 15 years, use our 5% vs 10% non-homestead cap calculator.

How often a 5% cap would actually bind

The cap only does work in years when values rise faster than it allows. We counted how often that happened. From 2013 through 2025, typical home values (Zillow Home Value Index, annual) rose more than 5% in a median of 8 of 13 years across 66 counties, and in at least 8 of 13 years in 40 of them. They rose more than 10% in a median of only 3.5 years, mostly 2021 and 2022.

So the old 10% cap mostly sat idle except in the pandemic run-up, and the flat-to-falling years of 2023 to 2025 let assessments catch up. A 5% cap binds in most years of a normal market. That is why the gap builds up and why a reset hurts more.

The cost of a reset, county by county

For each county we started a typical rental at its 2015 value, moved its assessed value forward each year by the smaller of the market change or the cap, and compared the result in 2025 with market value. The “tax jump at reset” is the gap times the county’s FY2025-26 non-school millage, the extra non-school tax a new owner would pay once the property is reassessed. It is a replay for illustration: the 5% cap was not in effect in those years, and real parcels differ from the county’s typical home.

Sources: Zillow Home Value Index, county annual values through 2025; FY2025-26 non-school millage from our county data (county averages; city and special-district millage vary). Monroe County is omitted because its index series starts in 2016. Momentum Realty analysis, November 10, 2026.

Northeast Florida, in dollars

In Duval, the typical home value of $301,427 in 2025 would have carried an assessed value of $229,490 under a ten-year 5% cap, a gap of $71,937. At 11.52 non-school mills, a reset adds about $829 a year. Nassau has the larger gap ($108,304) but a lower rate, so the jump is $750. Clay comes to $608, Baker $577 and St. Johns $560, where a rate of 7.27 mills offsets a gap of $76,983. Putnam lands at $721 and Flagler at $467. Countywide figures by market are on our county scorecards.

Those are yearly numbers, and they repeat. A buyer underwriting a rental at the seller’s current tax bill is underwriting the wrong number. The bill after the January 1 reset is the one to plug into the investment property calculator.

What counts as a change of ownership or control

The statute language is the same in both sections. A change of ownership or control is “any sale, foreclosure, transfer of legal title or beneficial title in equity to any person, or the cumulative transfer of control or of more than 50 percent of the ownership of the legal entity that owned the property when it was most recently assessed at just value” (s. 193.1554(5) and s. 193.1555(5), Florida Statutes, 2024). In practice that covers:

• A sale or foreclosure of the property itself.
• A deed into your own LLC. Moving a rental you own personally into a company you wholly own is a transfer of legal title, and it resets the cap. A 2023 appellate case, S & A Property Investment Services, LLC v. Garcia, upheld a reassessment after a married couple deeded their rental to their own LLC (as described by Kaufman Rossin and Saltiel Law Group, Nov. 3, 2026).
• Selling more than half of the LLC. No deed is recorded, but the property still resets.
• Selling it in pieces. The test is cumulative, measured from the last time the property was assessed at just value. Three 20% sales over several years add up to 60% and trigger a reset (Saltiel Law Group, Nov. 3, 2026).
• A change of control, even without a majority of the ownership changing hands, such as a change in who controls the entity.

The statute lists only a few exceptions: a transfer to correct an error, a transfer between legal and equitable title, and ordinary trading of shares of a publicly traded company (a merger or acquisition does count). For residential property of nine or fewer units, a transfer between spouses, including to a surviving spouse or in a divorce, is also not a change (s. 193.1554(5)(c)). The commercial section, s. 193.1555, does not include that spouse exception.

The reporting rule and the 50% penalty

A deed is recorded and the property appraiser sees it. A sale of membership interests in an LLC is not. That is why Florida requires owners to report a change of ownership or control that is not recorded by deed on Form DR-430 (Florida Department of Revenue, form revised 11/12), filed with the property appraiser in each county where the entity owns property.

The cost of skipping it is set by statute. If the property appraiser finds that for any year within the prior 10 years an owner received the cap without being entitled to it, the appraiser serves a notice of intent to record a tax lien. The property becomes subject to the unpaid taxes, plus a penalty of 50% of the unpaid taxes for each year and 15% interest per year. The owner gets 30 days to pay before the lien is filed (s. 193.1554(10) and s. 193.1555(10)). If the error was the appraiser’s own clerical mistake or omission, no penalty or interest applies.

Here is what that looks like on the Duval numbers above, our arithmetic and illustrative only. Say an investor buys out 60% of an LLC that owns a Duval rental in 2027, nobody files a DR-430, and the property appraiser catches it in 2032. The property should have been reassessed on January 1, 2028. That leaves four tax years, 2028 through 2031, at about $829 of avoided tax each, or $3,316. The 50% penalty adds $1,658. Simple interest at 15% a year, counted from each year to 2032, adds roughly $1,244. The total is about $6,218, nearly double the tax that should have been paid, and it attaches as a lien to property the entity owns in the county. In a real case the avoided tax grows each year as the gap widens, and the appraiser’s interest calculation may differ.

What this means if you own, buy or sell

• If you own a rental in an LLC: keep a running record of every transfer of membership interest since the property was last assessed at just value. The 50% test is cumulative, so a small sale today can tip a larger one later. File a DR-430 when a change happens.
• If you are thinking about deeding a rental into an LLC: the liability planning may still be worth it, but price in the reset. Once the 5% cap has been building for a few years, the deed has a cost in the hundreds or thousands of dollars a year.
• If you are buying a rental: the seller’s tax bill reflects their capped value, not yours. Estimate the bill at the purchase price for the year after closing. Our property tax after you buy calculator shows the reset.
• If you are buying an LLC instead of the property: buying more than half of the company is a change of control. It does not avoid the reset, and it adds a reporting duty.
• If you are selling: a buyer who understands the reset will price it in. If you are thinking about selling a rental, our agents can walk through what buyers are paying now on the seller page; commissions are always negotiable.

This is general information about Florida statutes and published guidance, not legal or tax advice. Entity transfers have other tax effects, including documentary stamp tax on some transfers of interests in entities that own Florida real property, so talk to a Florida real estate attorney or CPA before you restructure.

Related reading: what the 5% cap means for rents, whether your city can take back Amendment 3 savings, and the full Amendment 3 explainer.

How we built these numbers

We used each county’s annual Zillow Home Value Index from 2012 through 2025 from our market data as the value of one typical home, and FY2025-26 non-school millage from our county millage file (county averages; some counties’ school and non-school split is estimated). For the ten-year replay, the assessed value starts at the 2015 index value and each year becomes the smaller of that year’s index value or the prior assessed value plus 5% (or 10%). The gap is 2025 index value minus 2025 assessed value; the tax jump is the gap times non-school millage divided by 1,000. School taxes are not capped and are left out. Monroe County is omitted because its index series begins in 2016. Real assessed values, just values and city millage differ by parcel, and a home value index is not an assessment of any property. Data compiled November 10, 2026.

Frequently asked questions

Does Amendment 3 lower the cap on rental property in Florida?

Yes. Amendment 3 lowers the annual cap on assessment increases for non-homestead property, including rentals, second homes and commercial property, from 10% to 5% for non-school taxes starting in 2027. School taxes on non-homestead property stay uncapped.

Does selling part of my LLC reset the property tax cap?

It can. A cumulative transfer of control, or of more than 50% of the ownership of the entity that owned the property when it was last assessed at just value, is a change of ownership or control under s. 193.1554 and s. 193.1555. The property is reassessed at full value on the next January 1.

Does deeding my rental into my own LLC reset the cap?

Yes. A deed is a transfer of legal title, and a 2023 appellate case upheld a reassessment after a couple deeded their rental to their own LLC. Price in the reset before you restructure, and ask a Florida attorney about the other tax effects.

What is Form DR-430?

DR-430 is the Florida Department of Revenue form used to report a change of ownership or control of non-homestead property that is not recorded by deed, such as a sale of LLC membership interests. It is filed with the property appraiser in each county where the entity owns property.

What is the penalty for not reporting a change of control in Florida?

For any year within the prior 10 years, the property becomes subject to the unpaid taxes plus a 50% penalty on those taxes for each year and 15% interest per year, secured by a tax lien. The owner gets 30 days to pay after notice before the lien is filed.

How much can a cap reset cost?

In our ten-year replay of 66 Florida counties, a 5% cap would leave a median of 24% of a typical rental’s value off the non-school roll, and a reset would raise the non-school tax by a median of $741 a year. In Duval the figure is about $829 a year.