Florida “Live Local Act”: New Opt-Out Limitations for “Missing Middle” Exemption

Governor Ron DeSantis signed into law Senate Bill (SB) 102 in March 2023, also known as the “Live Local Act,” representing the largest investment for housing efforts in Florida history. In May 2025, SB 102 was officially amended, which provided the option for local government to opt out of the 75% property tax exemption program. As of July 1, the bill was further amended, extending the opt-out provision statewide.

The “Missing Middle”

Affordable housing developers shall receive what is being commonly referred to as a “Missing Middle” ad valorem tax exemption for portions of a multifamily project up to:

• 75% of the assessed value if the project provides housing to natural persons or families whose annual household income is greater than 80% but no more than 120% of the Area Median Income (AMI); or

• 100% of the assessed value if the project provides housing to natural persons or families whose annual household income does not exceed 80% AMI.

Qualifications:

• Project must be “newly constructed,” meaning that the improvements were substantially completed within five years before the earlier of (1) the date of an applicant’s first submission of a request of certification, or (2) an application for an ad-valorem exemption.

• Project must contain more than 70 units dedicated to persons or households whose household incomes do not exceed 120% AMI.

• Units must not be subject to an agreement with Florida Housing and Finance Corporation (FHFC).

To receive an exemption, the property owner must apply to the FHFC to receive a certification notice, which will be sent with an application form and required documents to the property appraiser.

The application requires several documents, including, but not limited to, a rental market study (completed within three years before submission by a licensed General Real Estate Appraiser) and the rent received for each unit for which the property owner is requesting the exemption. The property owner must submit the application form and certification notice from the FHFC to the property appraiser by March 1. If granted, the exemption will apply to the respective tax year and sunsets on December 31, 2059. Beginning with the 2025 tax roll, a taxing authority may elect, upon adoption of an ordinance or resolution approved by a two-thirds vote of the governing body, to opt out of exempting qualified property used for persons or families whose annual household income is greater than 80% AMI but not more than 120% AMI (i.e., those eligible units that would receive a property tax exemption of 75% of the assessed value, the “75% exemption”) located in a county specified by the Shimberg Center for Housing Studies Annual Report. Effective July 1, 2026, the opt-out provision was further amended in two ways:

1. The bill requires a taxing authority to make a finding that the annual housing reports published by the Shimberg Center for Housing Studies identify that a county in which, for each of the previous three years, the number of affordable and available units in the metropolitan statistical area or region is greater than the number of renter households in the metropolitan statistical area or region.

2. The bill specifies that projects for which a building permit is issued on or after July 1, 2026, may still apply for the tax exemption even if a local government opts out of the tax exemption, as long as such application is made within four years prior to the local government opting out of the tax exemption, and allows the property owner to receive the exemption for each subsequent year that the same or successive owner applies for and is granted the exemption.

At Ryan, our team of tax experts is closely monitoring these legislative changes and actively implementing strategies to assist developers in navigating the application process for these exemptions. Our comprehensive approach ensures that our clients are well-positioned to maximize the benefits of the Live Local Act while mitigating future tax liabilities.

The material presented in this communication is intended to provide general information only and should solely be seen as broad guidance and not directed to the particular facts or circumstances of any individual who may read this publication. No liability is accepted for acts or omissions taken in reliance upon the content of this piece. Before taking (or not taking) any action, readers should seek professional advice specific to their situation from Ryan, LLC or other tax professionals.