Key Reforms
House Bill 186 caps school district revenue growth from the 20-mill floor at inflation rates, preventing sharp increases during reappraisals, and creates a new credit starting mid-2026. It also phases out the 10% nonbusiness credit for residential properties (except agricultural land) while boosting the owner-occupancy credit from 2.5% to 15.38% over four years, with relief starting in tax year 2026 and full implementation by 2029. House Bill 335 applies similar inflation caps to local governments’ inside millage levies.
Timeline and Implementation
The laws take effect 90 days after signing, around March 2026, but first-half 2026 bills mailed soon will show no changes—relief hits second-half bills issued later in 2026 after state recalculation. County budget commissions gain authority under HB 309 to cut levy rates if revenues exceed needs, effective for 2026 taxes. HB 129 and HB 187 refine school levies and valuations using local sales data to avoid overassessments.
Impact on Property Owners
Homeowners could see hundreds in annual savings, especially owner-occupants applying for Homestead exemptions alongside the expanded credit, though rental property owners lose nonbusiness credits. Legislative estimates project $162-224 million in slowed tax growth from valuation changes (2026-2028), $432-633 million from credits (2025-2027), and up to $378 million from millage caps by 2028. School districts receive state offsets like $306 million initially to ease transitions.