Why You Have Rising Property Taxes and What You Can Do About It

A 'For Sale' sign is displayed in Falls Church, Va., on April 2, 2022. Stefani Reynolds / AFP via Getty Images

Homeowners have recently seen property taxes become higher than ever. The surge in the cost of owning property started with the arrival of COVID and continues to rise. Many people wonder why and want some tax relief.

Some homes have had their property taxes increase more than 37 percent since 2020. CBSNews reports that the sudden increase is because the value of real estate skyrocketed at about the same time. The average home in the United States rose to $344,000.

The higher property assessment is impacting homeowners, causing some to struggle to meet the higher tax payments. Potential homebuyers may think twice about buying their dream home and now have to settle for something smaller—and higher mortgage rates are not helping, either.

Cities and counties provide property evaluations at different times. While some evaluate properties yearly, some areas may only reevaluate them once every few years. In areas where it occurs less frequently, homeowners are apt to get a bigger sticker shock. More expensive areas in the same city may also have different percentage tax increases than other areas.

School Taxes Largely Responsible for Higher Property Taxes

In most communities, property taxes are how school budgets get their money. As the cost of teachers’ salaries, new schools, and materials for students grows, real estate taxes will continue to rise. New schools also tend to make a community more attractive for new homebuyers, which can lead to competitive bidding on homes, leading to higher home values.

Situations That Can Lead to a Higher Assessed Value

Besides building new schools and hiring more teachers, some other things can raise the value of your home and lead to higher local property taxes. They include:

• Home Renovations

Improving the way your home looks, or adding a room to it in a basement or attic, will raise the value of your home. Realtor says that the improvement could lead to a reassessment automatically, which will likely increase your taxes.

• Periodic Revaluations

Cities and counties will reevaluate properties in their jurisdictions. It may be annually or periodically. Even if they do not physically visit your home, they can review building permits submitted to learn about any improvements you made.

A tax assessor will also consider home sales in your area to determine if homes are selling for more than they are valued. If so, you can expect your home to be worth more—which could mean higher taxes.

• Natural Disasters

If your area had a major weather event, the federal government may help foot the bill for repairs or rebuilding. Oftentimes, Rate says, local governments may be responsible to cover the cost involved. When that happens, you can expect property taxes to pay the bill.

• Local Budget Increases

Creating new building projects in a community will also raise property taxes. Paying for pay raises to the police, fire department, local government officials, etc., will also lead to more taxes. So will new public projects such as museums, new courthouses, jails, new fire engines, etc.

Some States Limit Possible Property Tax Hikes

Depending on where you live, your property tax bill may only see small increases yearly. They have a cap on how much taxes can increase annually. If you live in one of these states, however, it does not mean that your taxes will not continue to rise year after year. When a higher tax increase becomes necessary in those places, the community can vote on it.

States With Lowest Property Tax

Although people enjoy finding a state without any property tax, they cannot find any in the United States. Property taxes fund many public services, including police and fire departments, parks, streets, sanitation, social services, libraries, etc.

In 2022, NAR.Realtor lists five states with the lowest property tax rates: Hawaii (the lowest), Alabama, Arizona, Colorado, and Tennessee.

States Where Seniors, Veterans, and the Disabled Pay No Property Taxes

A couple of states allow some groups of people to avoid property taxes. They include seniors over 65, veterans, and those who are disabled. According to PropertyClub, every state gives special exemptions to veterans disabled because of their military service.

Six states enable seniors to avoid paying any property taxes: Alabama, Alaska, Florida, Georgia, Mississippi, and South Dakota. Two of those states (Alabama and Florida) enable seniors over 65 to pay no property taxes at all. Mississippi exempts the first $75,000 of your home’s value from taxes, and Alaska exempts the first $150,000 of the value. Georgia offers exemptions to retirees over 65 to people in low-income housing. South Dakota gives retirees the opportunity to delay property taxes until the house is sold.

States With the Highest Property Taxes

If you are thinking of buying a home in another state and moving there, you may want to consider the cost of property taxes first. New Jersey is the highest, with average property taxes for a single-family home of $9,527, followed by Illinois, Connecticut, Vermont, and Nebraska. A chart at NAR.Realtor reveals that the average highest property taxes in cities are in New York, New York ($9,091), followed by the Californian cities of San Jose ($8,858) and San Francisco ($7,335). The city with the lowest property taxes is Birmingham, Alabama ($995), followed by New Orleans, Louisiana ($1,506), and Memphis, Tennessee ($1,672).

Appeal the Assessment

When you disagree with the assessed value of your home, you can appeal the tax bill. If you do so, you need to file the appeal, which will cost a small fee, and hire a lawyer. You should pay the bill while waiting to avoid late charges—or worse. An appeal does not necessarily mean a lower tax bill.

Property taxes are a part of life when you own a home. Taxes are likely to increase as long as real estate values remain high, but you may be able to keep your tax bill lower by avoiding remodeling and curb appeal projects.

The Epoch Times Copyright © 2022 The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.