If you are buying a second home in Watersound this winter, the property tax figure on the listing belongs to the seller. It shows their assessment, built up over the years they owned the house under Florida's 10% cap on non-homestead increases. Amendment 3 goes before voters on Tuesday, November 3. It would cut that cap to 5%, and it would not change the number you inherit at the closing table. Under current law, a change of ownership resets a non-homestead assessment to just value on the next January 1, and the amendment leaves that reset in place.
So the smaller cap mostly helps owners who already hold their property. For a buyer, its protection starts at zero on the day they close.
The Seller's Tax Bill Is the Wrong Benchmark
Florida's Constitution caps yearly increases in non-homestead residential assessments at 10% for non-school levies. It also keeps assessed value from going above just value, and it requires reassessment at just value after ownership or control changes. The 2026 Florida Statutes, section 193.1554 put this into practice for non-homestead homes of nine or fewer units. The assessment resets to just value, and after that, yearly increases are again limited by the cap and the just-value ceiling.
Consider a Watersound house a seller has owned for years while values climbed faster than the cap allowed. Each year the capped assessment fell a little further behind just value. That gap shows up as the lower tax bill on the listing. Once the house sells, the gap closes the following January 1, and the new owner's non-school levies are figured on full just value.
Here is the order of events for a buyer closing in 2027:
- Closing day. That year's bill still rests on the January 1 assessment, which was set under the seller's ownership.
- The next January 1. The assessment resets to just value because ownership changed.
- Every year after that. Increases for non-school levies are capped, at 10% under today's rules or 5% if Amendment 3 passes, and assessed value can never go above just value.
Amendment 3 changes only step three.
What the Lower Cap Does After the Reset
The official ballot summary says plainly that the amendment "reduces the annual cap on assessment increases for non-homestead properties from 10% to 5%," effective January 1, 2027. The cap only matters when just value rises faster than the cap allows. In a year when values hold steady, a 5% cap and a 10% cap produce the same assessment, because assessed value is already tied to just value.
Under a 5% cap, the gap between a long-held assessment and market value would grow faster in any year values rise by more than 5%. A larger gap means a larger reset when the property sells. If the amendment passes, the next generation of Watersound sellers may list homes whose tax history understates their next owner's bill even more than listings do now.
The Levy Amendment 3 Leaves Out
Neither half of the amendment touches school taxes. The bigger homestead exemption applies "for all non-school taxes." The final House analysis of HJR 1F, dated June 16, 2026, says the 5% cap applies to county, municipal and special-district levies but not to school levies. The same analysis notes that today's 10% non-homestead cap already does not apply to school levies.
A Watersound tax bill draws on several taxing authorities. The Walton County Tax Collector lists the School Board, South Walton Mosquito Control, the South Walton Fire District and the Northwest Florida Water Management District among the ad valorem authorities. The school line sits outside the amendment completely. For that portion, a second-home owner's assessment runs at just value whether the measure passes or fails.
Two Neighbors, Two Different Bills
Watersound's communities run from Gulf-front dune lakes on the eastern end of Scenic Highway 30A to golf fairways a short drive inland. Some owners there claim a Florida homestead and others hold a second home. Amendment 3 would widen the gap between those bills:
| Owner on the same street | Homestead exemption, non-school levies | Yearly assessment cap, non-school levies | School levies |
|---|---|---|---|
| Florida resident with homestead | Rises to $150,000 in 2027 and $250,000 in 2028, then indexed to inflation; owners who were not Florida residents on December 31, 2026, wait until their fifth year of exemption for the increase | Homestead protections | Not changed by Amendment 3 |
| Second-home owner who already holds the property | Not eligible | 5%, down from 10% | Not changed by Amendment 3 |
| Second-home buyer who closes in 2027 | Not eligible | 5%, starting after the reset to just value | Not changed by Amendment 3 |
A neighbor's tax bill tells you little about your own. It reflects their residency status, how long they have owned, and how far their capped assessment has fallen behind just value.
The December 31 Line for Families Moving Here
The provision most relevant to relocating families is one sentence in the summary. People who are not Florida residents on December 31, 2026, would get the existing homestead exemption once they qualify. The increased exemption would begin "with the fifth year of exemption, to the extent permitted by the U.S. Constitution."
Consider a family from Atlanta or Nashville who buys in Watersound Origins in 2027 to live there full time. If Amendment 3 passes, they would claim the current homestead exemption first and move to the larger one in their fifth year of exemption. A family already living in Florida by the end of 2026 starts from a different place. The calendar date is in the amendment text. How it applies to any particular family's residency is a question for that family's tax advisor.
This post is general information and not legal, tax or financial advice. Confirm how any of these rules apply to your property with a qualified tax professional or the Walton County Property Appraiser.
Why South Walton's Fire Chiefs Are Watching
The other side of the amendment is local revenue, and South Walton depends on property taxes in its own way. In WMBB's September 23 report, Fire Chief Association President Ryan Crawford explained why the effect would vary from place to place:
"What impacts a sheriff in South Walton from the tax reform standpoint, will be very differently affected in communities like Bonifay or the Panama City Beaches, because they have a much higher percentage of homestead properties."
The same WMBB report noted that many fire districts depend heavily on property taxes and have fewer ways to replace lost revenue without going back to voters. Walton County Sheriff Mike Adkinson said local leaders need to understand the financial impact before changes are made.
The figures are significant. Florida TaxWatch projects a cut in Walton County local property taxes of $14.0 million in FY 2027–28 and $171.1 million in total from FY 2027–28 through FY 2031–32. Statewide, the House analysis estimates local non-school revenue falling by $4.95 billion in FY 2027–28, by $8.78 billion in FY 2028–29, and by a recurring $11.86 billion. Those numbers cover the whole package, including the homestead changes.
For comparison, Walton County's current-year decisions are already set. The final levy resolution, adopted September 28, 2026, states that a millage rate of 3.25 is required on a total assessment of $49,098,663,848 to cover the budgets county officials submitted. It sets the FY 2026–27 aggregate operating rate at 3.2806 mills, 5.28% below the rolled-back rate of 3.4634. The final budget totals $345,223,508. At a September 3 public budget workshop, South Walton Fire District staff recommended keeping the district's rate at 1.0000 mill. The district scheduled its final public hearing on the levy for September 21.
The amendment also limits how counties and cities could spend property tax revenue. The permitted uses are public safety, education and schools, infrastructure, natural resources, bond debt service, employee retirement benefits, and operations and administration. Other spending would need approval from county officers or the governing body.
FAQ
Does Amendment 3 lower my 2026 tax bill? No. The ballot text sets an effective date of January 1, 2027, and the homestead exemption steps start in 2027.
What vote does it need? At least 60% of voters casting a ballot on the amendment, as the Florida Constitution requires.
Is Amendment 2 also a second-home tax cut? No. Amendment 2 would exempt qualifying tangible personal property used in agricultural production or agritourism, starting with tax years beginning January 1, 2027.
If I already own a second home in Watersound and the amendment passes, what changes? Starting in 2027, yearly increases in your assessment for county, municipal and special-district levies would be capped at 5% rather than 10%. School levies and the reset at sale would not change.
At Allison Richards, we build a buyer's first-year carrying costs from the assessment that follows the reset, not from the seller's tax history, whichever way Tuesday's vote goes. Elevate your 30A experience by connecting with Allison Richards before you write your offer.
