I Would Just like the Worth of My House to Rise, Whereas My Property Taxes Fall

Many of us are inconsistent in our financial needs. I would love the worth of my dwelling to rise, as a result of it will increase my wealth, however I might additionally like the costs of all different houses to fall, in order that I might promote my home and purchase a fair nicer home. Also, I want to have the worth of my home rise, but additionally pay decrease property taxes. David Schleicher digs into the second concern in “The Great American Property Tax Freak Out” (posted on-line at SSRN on September 1, 2026). He writes:

In the final three years, various states have considerably reformed their property tax methods, offering big tax advantages to owner-occupied houses and shifting the burden of paying for providers like faculties and police to industrial property homeowners (together with rental condominium buildings), to different native taxes, and to state funding, which itself largely comes from sources like gross sales taxes and earnings taxes. A couple of, together with Florida, Ohio, North Dakota, and Texas, have thought-about going additional, both utterly abandoning property taxation for owner-occupied housing and even abandoning property taxation completely. … One would possibly suppose that householders can be comfortable that their largest asset has appreciated considerably in worth, as houses did, significantly in suburbs, within the post-COVID interval. But as a result of property taxes are wealth taxes, property homeowners have responded to their growing wealth with political anger, pushing shifts in property tax coverage, usually resulting in growing charges on industrial property homeowners who’ve seen declining values throughout the identical interval. …

[T]hese reforms shift the property tax from a device householders use collectively to supply for locally-wanted providers in the direction of a extra normal type of redistributive taxation, charging industrial property homeowners to pay for providers for householders. Further, they are going to result in higher state authority over native governments, much less steady funding for native governments (but additionally much less tax foreclosures in recessions), and stricter zoning controls (however extra constructing of houses the place it’s authorized). Perhaps most notably, these property tax reforms will result in increased housing prices, and thus represent a considerable switch of wealth in the direction of individuals who already personal houses and have already seen their internet value improve considerably within the submit COVID housing market.

A couple of different details and insights appear value appending right here.

1) there’s a variety of native variation throughout public finance within the United States. But as a broad assertion, property taxes are the foremost own-source of turnover for native US governments, and in flip the primary supply of financing for native faculties. Many native governments have historically relied on property taxes to pay for police as nicely. The political dynamic of decreasing property taxes usually includes state-level actions that restrict or block property taxes on the native degree. It just isn’t clear that voters for decrease property taxes have drawn a connection of their thoughts to the chance of decreased native public providers.

2) the property tax is a type of wealth tax, and it has the usual issues of a wealth tax: particularly, you possibly can have extra wealth–say, the worth of your property, your trade, or your retirement account went up–with out having instant earnings to pay a better degree of taxes. Thus, older voters who are inclined to have increased accrued wealth, partly within the type of dwelling fairness, but additionally decrease present earnings, are a politically highly effective and sympathetic group within the push to scale back or remove property taxes.

3) If property taxes are decreased or abolished, the price of proudly owning a house falls. (For instance, think about that you possibly can assure that the roof, exterior, driveway, plumbing and HVAC methods in your own home would by no means want restore or substitute, which might additionally result in a fall in the price of proudly owning a house.) With decrease prices of proudly owning a house, the market worth of the house rises. Thus, the ironic final result is that increased housing costs trigger voters to need to restrict or repeal property taxes, which might then result in even increased housing costs. Moreover, the present householders who’ve already benefited from increased dwelling values will profit additional, whereas homeownership will look even costlier for potential future homebuyers.