Many of us are inconsistent in our financial desires. I would akin the cost of my residence to rise, since it increases my wealth, but I would additionally akin the prices of all another homes to fall, so that I could market my home and buy an equal nicer house. Also, I would akin to have the value of my home rise, but additionally pay lesser asset taxes. David Schleicher digs into the second matter in “The Great American Property Tax Freak Out” (posted online at SSRN on September 1, 2026). He writes:
In the final three years, a figure of states have substantially reformed their asset tax systems, providing huge tax benefits to owner-occupied homes and shifting the burden of paying for services akin schools and constabulary to business asset owners (including rental flat buildings), to another local taxes, and to province funding, which itself mostly comes from sources akin revenue taxes and earnings taxes. A few, including Florida, Ohio, North Dakota, and Texas, have considered going further, either entirely abandoning asset tax for owner-occupied accommodation or equal abandoning asset tax entirely. … One power think that homeowners would be blessed that their largest asset has appreciated substantially in value, as homes did, particularly in suburbs, in the post-COVID period. But since asset taxes are prosperity taxes, asset owners have responded to their expanding prosperity alongside governmental anger, pushing shifts in asset tax policy, frequently foremost to expanding rates on business asset owners who have seen declining values during the identical period. …
[T]hese reforms change the asset tax from a tool homeowners use collectively to provision for locally-wanted services towards a additional norm form of redistributive taxation, charging business asset owners to pay for services for homeowners. Further, they volition guide to greater province authority complete local governments, small stable backing for local governments (but additionally small tax foreclosure in recessions), and stricter zoning controls (but additional construction of homes anywhere it is legal). Perhaps most notably, these asset tax reforms volition guide to higher accommodation costs, and thus form a significant transfer of prosperity towards group who already own homes and have already seen their net value addition substantially in the article COVID accommodation market.
A few another facts and insights appear value appending here.
1) there’s a lot of local assortment throughout community backing in the United States. But as a broad statement, asset taxes are the important own-source of income for local US governments, and in rotate the chief origin of financing for local schools. Many local governments have traditionally relied on asset taxes to pay for constabulary as well. The governmental energetic of reducing asset taxes frequently involves state-level actions that bounds or obstacle asset taxes at the local level. It is not apparent that voters for lesser asset taxes have drawn a association in their intellect to the likelihood of reduced local community services.
2) the asset tax is a form of prosperity tax, and it has the norm problems of a prosperity tax: specifically, you can have additional wealth–say, the value of your home, your business, or your withdrawal document went up–without having contiguous earnings to pay a higher flat of taxes. Thus, older voters who lean to have higher accumulated wealth, partially in the form of residence equity, but additionally lesser current income, are a politically mighty and sympathetic collection in the shove to decrease or eliminate asset taxes.
3) If asset taxes are reduced or abolished, the disbursal of owning a residence falls. (For example, ideate that you could justify that the roof, exterior, driveway, plumbing and HVAC systems in your home would never need repair or replacement, which would additionally guide to a autumn in the disbursal of owning a home.) With lesser expenses of owning a home, the market value of the residence rises. Thus, the ironic outcome is that higher accommodation prices logic voters to desire to bounds or repeal asset taxes, which would afterward guide to equal higher accommodation prices. Moreover, the current homeowners who have already benefited from higher residence values volition advantage further, during homeownership volition appearance equal costlier for possible forthcoming homebuyers.
