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 age 60 and older than any other state. You were essentially getting extra money to hit your retirement goals, and for a long time, that was enough.

However, the situation in the Sunshine State has changed in recent years, so it's not as appealing for retirement as it once was. Here's why retirees are discovering that the lack of income tax in Florida doesn't make up for all of the other additional expenses that come with 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 gap is bigger than the income-tax savings most retirees were counting on.

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.

However, Florida's well-known protections mostly reward people who've already lived there for years. The Save Our Homes cap limits annual increases in a homestead's assessed value to 3% or CPI, whichever is lower, and it was just 2.9% for 2025. Owners are able to port up to $500,000 of that benefit to a new home, but only when moving from one Florida homestead to another, according to PropertyTaxRates.org.

Moving in from out of state, you get none of that. When a home sells, its assessed value resets to the purchase price at full market value. So, a retiree buying today is taxed on the house's elevated price, not on the capped assessment the seller spent years building.

Home prices climbed and reset the cost of moving in

The pandemic boom ran Florida home prices well ahead of trend. The average value now sits around $377,578, down about 3.3% over the past year as the market cools. While prices have softened, the level is what matters.

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% recorded as of 2026. 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 isn't taking these extra taxes into account, you'll have an inflated sense of what is affordable in Florida, which isn't an ideal retirement situation.