Florida Retirees Are Discovering the No-Income-Tax Math Doesn’t Add up Anymore

For decades, Florida's lack of state income tax made it an appealing place for retirees. The savings are predictable and help explain why Florida still draws more residents aged 60 and older than any other state. You were essentially saving extra money for retirement, and for a long time, that was enough.

However, the situation in the Sunshine State has changed in recent years, so it's less appealing for retirement than it once was. Here's why retirees are discovering that Florida's lack of income tax doesn't offset all the other expenses of living there.

Why Florida is losing its retirement appeal

There are a few major reasons people are reconsidering retirement in the Sunshine State. These range from insurance to weather to the simple cost of moving to a state already overloaded with people well past retirement age.

Florida's homeowners' insurance is the highest in the country

According to Insurance.com, Florida is the most expensive state in the country for home insurance, averaging around $7,136 a year, compared with a national average of $2,543. That roughly $4,600 annual difference can eat into the money retirees expect to save by moving to a state with no individual income tax.

The climb has been steep. Florida premiums rose about 75% between 2021 and 2025, nearly double the national average of 38%, according to a report from the Coalition for an Insurable Future.

The market has settled somewhat after legal reforms in 2022 and 2023, with costs down about .7% in 2024, as reported by the Daytona Beach News-Journal. 

Premiums are still among the highest in the nation, and a transplant from a lower-risk state pays several times what they did back home. The premium isn't even the full exposure. A standard policy carries a separate hurricane deductible, often 2% to 10% of your dwelling coverage, and flood damage needs its own policy.

Property taxes hit new buyers harder than long-time owners

On paper, property taxes look moderate. The average effective rate is about 0.79%, so a $350,000 home runs roughly $2,765 a year before exemptions, according to Kiplinger.

Florida's Save Our Homes provision limits annual increases in the assessed value of an eligible homestead to 3% or the inflation rate, whichever is lower. When a home changes ownership, its assessed value generally resets to market value, which can mean the new owner pays a higher property tax bill than the previous owner. For 2026, the Save Our Homes cap is 2.7%, according to the Florida Department of Revenue.

New buyers generally don't inherit the previous owner's accumulated Save Our Homes benefit. When a property changes ownership, its assessed value is generally reset to market value for the next assessment year. That can mean a higher property tax bill, although eligible buyers may qualify for a homestead exemption and begin building their own Save Our Homes protection.

Florida voters will also consider a proposed constitutional amendment on November 3, 2026, that would increase the homestead exemption to $150,000 in 2027 and $250,000 in 2028 for the non-school portion of property taxes. 

The proposal would also lower the annual assessment cap for non-homestead properties from 10% to 5%. Under the revised ballot language, people who were not Florida residents by December 31, 2025, would receive the higher homestead exemption in their fifth year, to the extent permitted by the U.S. Constitution. The changes aren't guaranteed and would depend on voter approval.

Home prices climbed and reset the cost of moving in

The pandemic boom ran Florida home prices well ahead of trend. The average value is around $375,361, down about 0.9% over the past year. While prices have eased, buyers still face substantial upfront costs — and the purchase price can affect their property taxes and insurance premiums.

Historical data show that Florida home values climbed at an average annual rate of 8.2% during the 2013–2019 recovery era, which stands in stark contrast to the near-flat growth rate of under 1%. A retiree buying now pays a post-boom price, then pays property tax and insurance on that same number, as reported by Macrotrends.

Condo owners now face six-figure special assessments

If one cost has truly blindsided retirees, it's the special assessment. After the Champlain Towers South collapse in Surfside killed 98 people in June 2021, Florida overhauled its condo rules, starting with Senate Bill 4-D. Buildings three stories or taller now must undergo structural inspections and maintain repair reserves, which they were once allowed to defer. 

As of January 1, 2025, associations must fully fund those reserves, and boards are no longer able to vote to waive the contributions.

Catching up means higher dues or a one-time special assessment, and those have been brutal. At the Cricket Club, a bayfront building in North Miami, owners faced a $30 million assessment. That meant one owner, who bought his place for $119,000 in 2019, was forced to sell. 

Six-figure assessments have hit other aging buildings, too, and many of the owners are retirees on fixed incomes. A 2025 relief bill extended some deadlines but left the core requirement intact.

How to run a full Florida cost comparison before you move

Before you commit, price the whole thing out to make sure you're getting your money's worth. That means doing a few things, such as:

• Get an actual insurance quote for the specific house and ZIP, not a statewide average. Two homes a few miles apart might differ by thousands of dollars.
• Look up the property on the county appraiser's site and work out the tax bill at your purchase price, since the assessment resets when you buy.
• For a condo, request the latest reserve study and ask in writing about pending assessments.
• Then compare your total annual Florida cost with what you pay now, income-tax savings included. If Florida still wins, that's good. If not, it's better to find that out before you buy than after the first renewal hits the mailbox.

Bottom line

Florida's no-income-tax promise is real, and for the right retiree in the right market, it still adds up. But it was never the whole story, and it's less of a big deal now than a decade ago. Between the insurance premium, the reset assessment, and the condo math, the retirement picture isn't as rosy as you might expect it to be.

No income tax doesn't mean no taxes, either. Florida's combined state and local sales tax runs around 7%, roughly $2,100 a year on $30,000 of spending, according to the Tax Foundation. That means if your retirement plan doesn't account for these extra taxes, you'll have an inflated sense of what is affordable in Florida, which isn't ideal for retirement.

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