U.S. homeowners had more than $35 trillion in home equity in the fourth quarter of 2024. If you’re among those who have a heap of equity and you plan to downsize to a smaller home, that’s great news. But homeowners who want to stay put are finding it increasingly difficult to afford the cost of remaining in their homes.
The average property tax bill for single-family homes rose 4.1 percent, to $4,062, in 2023, after increasing 3 percent in 2022, according to ATTOM, a real estate research firm. Homeowners in some high-cost states, such as New Jersey, Illinois, Connecticut and New York, paid more than double that amount, on average.
In response, voters in half a dozen states approved ballot measures in November that will provide property tax relief to seniors, veterans and other homeowners. In other states, lawmakers are considering measures that would provide tax breaks to eligible homeowners.
In Florida, voters approved a measure that will raise the state’s homestead exemption to keep pace with inflation. Starting in 2025, the increase in the exemption will be tied directly to the inflation rate, as measured by the consumer price index. If inflation increases by 3.5 percent, for example, the exemption will go up by 3.5 percent, too. Currently, Florida homeowners can exempt up to $50,000 of their home’s assessed value from property taxes.
Voters in Georgia approved a change in the way homes in the state are assessed for property tax purposes. Increases in assessments will be limited to the previous year’s inflation rate, regardless of how much property values have risen. A home’s assessed value will be reset when it is sold. Counties and municipalities can opt out of the measure, but only if they pass a resolution and hold three public hearings by March 1, 2025.
In New Mexico, voters approved a measure that will provide property tax relief for disabled veterans. A constitutional amendment will increase the property tax exemption for veterans to $10,000 from $4,000 and adjust it to inflation. Voters in Virginia also voted to provide property tax relief to veterans.
Critics of the measures say they will make it more difficult for localities to fund essential services because property taxes make up a significant portion of local government tax revenue. That concern led voters in North Dakota to defeat a proposal that would have eliminated property taxes in that state. Opponents said the measure would have necessitated significant spending cuts in health care and education.
Taking Advantage of Tax Breaks
No matter where you live, it’s worth looking into whether you’re eligible for property tax relief, particularly if you’re a senior citizen or a veteran or meet certain income requirements. AARP estimates that more than 9 million homeowners are eligible for some kind of property tax relief. Some states cap the amount that property taxes can increase over a certain period, while others have programs that limit increases in the assessed value of homes for property tax purposes. In Arizona, for example, homeowners age 65 or older who have lived in their primary home for at least two years and meet income limits can have their property’s valuation frozen for three years. New Jersey has a “senior freeze” program that reimburses property tax increases for eligible residents who have owned their homes for at least three years.How to Appeal
Even if you don’t qualify for a property tax break, you may be able to appeal your tax bill if you believe the increase in your home’s assessed value is out of line with overall housing appreciation in your neighborhood.Start by making sure you understand how your locality assesses property. Some areas refresh assessed values annually, while others do so every other year or every few years. You’ll also want to research your locality’s procedures for filing an appeal, including deadlines.
Next, check your property’s record card, which is the official description of your house; you can usually find it on your locality’s website. Check for outright errors, such as a listing of four bedrooms for your two-bedroom bungalow. In that case, the assessor may fix the problem on the spot, which may reduce the assessed value as well as your tax bill.
Also pull up property cards of several homes in your neighborhood that are similar in age and square footage and have the same number of bedrooms and bathrooms to see how those assessments line up with your home’s assessment. Search in your area for recent sale prices of homes similar to yours on a website such as Zillow.com. Sales in the past few months may have taken place after your assessor’s property evaluation. If you find that your home’s assessed value is considerably higher than that of several similar homes, or that sale prices of nearby homes suggest that your property’s value is lower than estimated, you may have grounds for appeal.
