Property taxes are intensely local, but the concern about their sharp upward trajectory in recent years has gone national – and new data shows why.
More than 72% of metropolitan areas with at least 200,000 residents saw above-average increases in property-tax bills last year, according to Attom, a property-data and real-estate analytics firm.
Nationally, the average property-tax bill on a single-family home increased by 2.7% in 2024. But in 157 of these 217 metropolitan areas, those bills jumped by more than that.
One year earlier, just over half of these areas saw above-average tax hikes, according to Attom data. In 2022, nearly two-thirds had above-average hikes to tax bills.
Last year, homeowners paid an average $4,172 in property taxes, although that varies widely. New Jersey homeowners paid the most, with an average bill of $10,135, while West Virginia homeowners paid the least, at $1,027. The analysis didn’t include New York due to data-availability issues, Attom noted.
Attom’s property-tax numbers are the latest high-level look at a growing issue for homeowners, prospective home buyers and politicians that comes as home values, along with costs for local services, have soared, due in part to the pandemic and the subsequent inflation wave.
“In many areas, we’ve seen taxes increase not just due to property appreciation, but also because of growing costs to operate local governments and schools or shifts in how tax burdens are distributed,” said Rob Barber, chief executive at Attom.
Fast-rising tax bills in recent years have created a new “property-tax revolt,” according to Jared Walczak, vice president of state projects at the Tax Foundation.
To him, the mood feels reminiscent of the widespread antitax sentiment that started in the 1970s and eventually led to the 1978 passage of California’s Proposition 13, which capped annual increases in property taxes there.
Over the years, debates over property taxes have flared up around the country, based on state and local circumstances. What’s different now is the prevalence of talk about property-tax reform, he said. “As a national front-and-center issue, this is the biggest push we’ve seen since the ’70s and ’80s,” Walczak said.
For example, in Iowa, lawmakers are considering how they can rework the state’s property-tax rules to lower the burden on homeowners. Kansas legislators tried to pass a state constitutional amendment to address rising tax bills.
In Florida, lawmakers are eyeing how to eliminate property taxes entirely, which would make it the first state without such a tax. Last fall, North Dakota voters rejected a ballot measure to abolish the tax. The measure’s critics said a better solution would be to reform property taxes.
On Capitol Hill, federal lawmakers need to decide what to do about the income-tax deduction for property-tax payments, and other local taxes. Taxpayers can deduct up to $10,000 in state and local property taxes if they itemize their deductions.
Lawmakers capped that deduction, which was previously unlimited, as part of the 2017 Trump tax cuts, which are due to expire at the end of the year. The future level of the deduction is a key concern for lawmakers in the congressional SALT caucus, which advocates for tax relief, including the repeal of the $10,000 cap on the deductibility of state and local taxes.
The spotlight now trained on property taxes has a link to Capitol Hill, according to Kim Rueben, senior adviser at the Lincoln Institute of Land Policy, a think tank that researches taxation.
The federal government sent billions of dollars to state and local governments during the pandemic, but that funding has ended, she noted. Meanwhile, tax revenue from commercial properties has dropped as the enduring work-from-home trend challenges downtowns, Rueben said.
Generally, it’s state governments that decide “how local governments can tax property, and local governments are responsible for rate setting (often subject to a state-established cap) and administration,” the Tax Foundation’s Walczak noted.
So local governments have to rely more on their residential property-tax base – all at a time when homeowners are seeing other expenses rise and their spending power fade. For many homeowners who have mortgages with 2% and 3% interest rates, the current high rates make refinancing unappealing as a way to free up cash for taxes, she said.
Tough decisions
The higher property-tax bills may cut deeper now because other costs of homeownership, such as insurance, utilities and maintenance, have been rising as well.
Surveys highlight the strain.
Rising property taxes were the most-cited concern among homeowners (43%), according to a Lending Tree survey conducted last fall. Around seven in 10 said their property taxes were too high, according to an AP-NORC poll from January 2024.
In a survey out this week, 82% of respondents said they budgeted for their property taxes this year, but 66% said their bill was higher than expected, according to Ownwell, a business that helps clients contest their property-tax bills. Too few homeowners take advantage of their ability to challenge assessments, according to Colton Pace, Ownwell’s founder and CEO.
Yet the number of people mounting a fight is growing, and Texas is a microcosm of that battle, according to Ownwell’s analysis.
Like Florida, the state does not assess an income tax, which puts extra focus on property-tax revenues. The share of properties for which owners contested taxes increased from 2022 to 2024 in the counties that are home to the cities Houston, Dallas, Fort Worth and Austin, according to Ownwell. In Travis County, where the capital city and college town Austin is located, owners of approximately 42% of properties contested their property taxes last year, up from less than 30% in 2022.
Of course, there are regional differences when it comes to property taxes. The Northeast and Midwest generally have higher home values and higher effective tax rates, which are the yearly tax amount as a percentage of estimated home value, Barber said.
Illinois has the country’s highest effective tax rate at 1.87% and a higher-than-average tax bill at over $6,000. Houses in the South and West generally have lower home values and lower effective tax rates, Barber noted.
But the pattern doesn’t always fit. States that have avoided high property-tax costs in past years have had to confront the issue, said Walczak. That’s happened a lot in the Mountain West region, he noted.
Take Colorado: At 0.51%, the state’s effective tax rate last year was below the national average, and so was its average bill of $3,778. But there was a 12% year-over-year increase in the average tax amount, according to Attom’s numbers.
Gov. Jared Polis signed a relief bill last fall after state lawmakers spent several years grappling with the issue, according to Colorado Public Radio. When signing the bipartisan bill, Polis said it had ended the state’s “property-tax wars.”
The saga, though, is still playing out across the country, Rueben said, and while local governments are generally aware of the property-tax pinch, they may need to think more about it. “There’s going to be hard decisions to be made,” she said.
