Property Tax Relief Sought by Homeowners as Values Rise
Homeowners Struggle with Higher Property Taxes
For retirees Tom and Beverly McAdam, the good news is the value of their two-bedroom home in suburban Denver has risen 45% since they purchased it more than six years ago. However, this also means they will be paying thousands more in real estate taxes, leaving less for discretionary spending.
"To pay the higher property taxes, it just means we’ve got to take more money out of our investments when it comes time to hit those big bills," Beverly McAdam said.
Limited Relief Options for Homeowners
She backs a Colorado ballot proposal that could cap the growth of property tax revenue. This is one of several measures in states this year to limit, cut or offset escalating property taxes in response to complaints.
National Trend
Over the past five years, single-family home prices have risen about 54% nationally, according to S&P Dow Jones Indices. This means higher tax bills for homeowners when governments don’t offset higher real estate values by reducing tax rates. With offices seeing higher vacancies as people still work from home after the coronavirus pandemic, some commercial property values are declining, putting even more pressure on residential properties to deliver revenues.
State and Local Responses
Colorado, like Alabama and Wyoming, has a new law that will limit the growth in tax-assessed values for homeowners. Property tax relief will be part of a special legislative session beginning June 18 in Kansas, while Nebraska also could hold a special session to cut property taxes. Georgia voters will decide in November whether to authorize a new law limiting increases in assessed home values for tax purposes to the rate of inflation, unless local governments or school boards opt out.
Homeowners’ Concerns
Lanell Griffith, a homeowner in Topeka, Kansas, said, "The government shouldn’t be able to arbitrarily just increase what they say you owe them without any sort of guardrails on that." Her property taxes have increased significantly over the years, and she backs a measure to cap the growth of property tax revenue.
Consequences of Relief Measures
Any relief measures carry consequences. Limits on the growth of assessed property values may provide a greater benefit to the wealthy. Exemptions for homes used as primary residences can shift a greater tax burden to rental properties and businesses.
Conclusion
As property values continue to rise, homeowners are seeking relief from escalating property taxes. While some states and local governments are exploring measures to provide relief, others are concerned about the consequences of such measures. The debate surrounding property tax relief is complex, and a balance must be struck between providing relief to homeowners and ensuring local governments have sufficient revenue to provide essential services.
FAQs
Q: How have property values changed over the past five years?
A: Single-family home prices have risen about 54% nationally, according to S&P Dow Jones Indices.
Q: What measures are being taken to provide property tax relief?
A: Several states and local governments are exploring measures to limit, cut or offset escalating property taxes, including capping the growth of property tax revenue, reducing tax rates, and providing income tax credits to help offset property taxes for certain individuals.
Q: What are the concerns about relief measures?
A: Some experts and homeowners are concerned that relief measures may benefit the wealthy more and shift the tax burden to rental properties and businesses.
Q: How are states and local governments responding to the issue?
A: Some states and local governments are holding special sessions or considering new laws to address the issue, while others are proposing ballot measures to cap property tax revenue growth.
