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Property taxes have soared nationwide, fueling discontent among homeowners and prompting a flurry of efforts by states to rein in the hikes, or in the most extreme cases, phase out the taxes altogether.
But as state legislative sessions wind down, few proposals have become law. Florida ended its session without passing a bill that would wind down non-school taxes on many homes. A sweeping measure that would have ended property taxes in Georgia failed, leaving the state weighing a more limited bill to cap future property tax increases. And in Iowa, the state’s House and Senate are considering two different tax-cutting bills, but have yet to find a compromise.
The political enthusiasm around cutting property taxes — more than a dozen states are considering it — but the difficulty in actually doing so reflects tough budget and economic realities. On average, some 70% of local revenues come from property taxes, meaning any efforts to cut them have serious implications for municipal budgets that pay for everything from public safety to park upkeep. And in the long-term, policies like capping property tax increases can make it more challenging for first-time homebuyers to enter the market.
“Good politics doesn’t always make good policy,” said Manish Bhatt, vice president of state tax policy at the Tax Foundation, a right-leaning think tank.
Property taxes have increased in response to skyrocketing home values around the country. While effective tax rates vary widely by state, homeowners in both high- and low-tax states have seen their bills balloon.
In New Jersey, which has the nation’s highest effective property tax rate, as well as high home values, the median homeowner paid over $9,358 in property taxes in 2024, up more than 10% from $8,432 in 2019, according to Census Bureau data.
In Alabama, where property tax rates are among the lowest in the country and home prices are also more modest, the median tax bill was $890 in 2024, a 17% increase from $609 five years earlier.
The growing tax bills are a particular sting for low- and moderate-income homeowners, as well as those on fixed incomes, said Neva Butkus, a senior analyst at the left-leaning Institute on Taxation and Economic Policy.
“Property taxes have definitely been a hot topic in recent years because housing prices have increased significantly post-COVID,” Butkus said. “Unlike many forms of taxation, property taxes are not necessarily connected to people’s ability to pay them.”
They’re also a major component of what are often called the “hidden costs” of homeownership — a category that includes other fast-rising expenses like insurance and homeowners’ association fees.
