The state Legislature passed the Live Local Act in 2023 to encourage developers to build affordable housing in Florida. One of the ways it seeks to do this is by offering a property tax exemption for middle-income, multifamily developments—a type of housing designed to be affordable for renters who earn between 80% and 120% of local median income. While potentially beneficial, the middle-income tax exemption has several problems that—if not addressed by the Legislature—could make it of little value to many developers statewide.

The Basics of the Middle-Income Exemption

The middle-income exemption provides either a partial or full exemption on a per-unit basis if the project is five years old or newer and has at least 71 units dedicated for tenants earning no more than 120% of median income for at least three years. In addition, the exemption requires the development to charge rent below the rates posted for the county by the Florida Housing Finance Corp., or 90% of the fair market rental value. It also requires that the Florida Housing Finance Corp. issue a certification letter for the affordable units, and that the owner apply for an exemption with the county property appraiser by March 1 of the tax year. If the county property appraiser is satisfied that the conditions have been met, the units leased to tenants earning between 80% and 120% of median income would be eligible for a 75% exemption. For example, if such a unit is valued at $100,000, 75% would be exempt from tax, so tax would be paid on only $25,000. For units leased to tenants earning less than 80% of median income, the unit would be 100% exempt. It's important to note that the Legislature this year added a provision allowing local taxing jurisdictions to opt out of the exemption if a determination has been made that the county has an adequate supply of affordable housing.