With home prices up more than 50%, some states try to contain property taxes

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For retirees Tom and Beverly McAdam, the good news is the value of their two-bedroom home con suburban Denver has risen 45% since they purchased it more than six years spillo.

That’s also the bad news, controllo them thousands more con real mesi estivi taxes and 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 successo those bills,” Beverly McAdam said.

She backs a Colorado ballot proposal that could cap the growth of property tax revenue. It’s one of several measures con states this year to limit, cut ora offset escalating property taxes con response to complaints.

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Over the past five years, single-family home prices have risen about 54% nationally, according to S&P Dow Jones Indices.

That means higher tax bills for homeowners when governments don’t offset higher real mesi estivi values by reducing tax rates. And 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 residential properties to deliver revenues.

“With assessed values skyrocketing over the past few years,” said Jared Walczak, vice president of state projects at the nonprofit Tax Foundation, “homeowners are clamoring for relief, and state policymakers are increasingly exploring ways to provide it.”

Colorado, like Alabama and Wyoming, also has a new law that will limit the growth con tax-assessed values for homeowners. Property tax relief will be part of a special legislative session beginning June 18 con Kansas, while Nebraska also could hold a special session to cut property taxes.

Georgia voters will decide con November whether to authorize a new law limiting increases con assessed home values for tax purposes to the rate of inflation, unless local governments ora school boards opt out.

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Five years spillo, Lanell Griffith and her husband paid a little less than $2,700 con property taxes their Topeka, Kansas, home con a historic neighborhood of tree-lined, brick streets. Their bill last year was more than $3,700.

“The government shouldn’t be able to arbitrarily just increase what they say you owe them without any sort of guardrails that,” Griffith said.

Kansas lawmakers this year passed three measures that would have reduced the state’s property tax levy for public schools. But each was vetoed by Democratic Gov. Laura Kelly because of concerns about other sections to cut income taxes. The special session will mark a fourth attempt at consensus.

Per Vermont, Republican Gov. Phil Scott has vowed to a bill that would raise property taxes by an average of nearly 14% to provide more money for public schools. Scott said people “simply cannot afford a historic, double digit property tax increase.”

Per many states, property taxes are primarily a function of local governments such as counties, cities, school boards and special districts for libraries, fire departments and tazza systems. Each entity sets its own property tax rate, which is added to the others to quanto up with an overall tax bill for property owners.

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State legislatures can intervene con a variety of ways. They can establish statewide limits how much assessed property values can rise, create partial tax exemptions for all homeowners ora provide income tax credits to help offset property taxes for certain people, such as those 65 and older.

But any relief carries consequences. Limits 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.

“If you do this too much, you can now start tying the hands of your local government and cutting them d’avanguardia from the ability to raise revenue,” said Richard Auxier, a principal policy associate at the nonprofit Tax Policy Center.

While signing several property tax relief laws this year, Republican Wyoming Gov. Mark Gordon vetoed one that would have exempted 25% of a home’s value from property taxes. He said it “jeopardized the financial stability of the state and counties.”

Per 1982, voters con Muscogee County, Georgia, approved a local ordinance freezing assessed property values for homes used as primary residences. The result: longtime homeowners pay very little, newcomers pay more and businesses some of the state’s highest property tax rates, said Suzanne Widenhouse, the county’s chief appraiser.

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Last year, two similar homes worth around $330,000 had dramatically different tax bills. One, whose assessed value was frozen con the 1980s, owed less than $8. The other, whose assessed value was frozen when purchased about five years spillo, owed $3,236, Widenhouse said.

“Anytime you grant an exemption, you create an inequality,” she said.

A Georgia ballot measure would amend the constitution to allow increases con assessed property values to be capped at the rate of inflation. But it wouldn’t undo past increases.

Per the eight years since Rob Romeijn bought a ranch-style house 10 acres (4 hectares) southeast of Atlanta, Rockdale County has raised the assessed value of his property from $127,000 to $230,000, also bumping up his property tax bill, he said.

As a Dutch immigrant with permanent residency, Romeijn can’t vote con elections con Conyers, but he was so unhappy about the increase that he made a sign urging people to vote out Rockdale’s commissioners and protested outside county offices con April.

Colorado also has been at the center of the property tax debate. The state has experienced decades-long growth con new residents, driving up demand for housing. Meanwhile, it has struggled to find a balance between providing tax relief for homeowners and sufficient funding for local governments.

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A 1982 constitutional amendment limited residential properties to 45% of Colorado’s total property tax centro while also setting a fixed assessment rate for commercial properties. To keep the ratio con balance as home values rose, residential tax assessments were cut, leaving less revenue for essential services such as fire districts.

Colorado voters repealed that constitutional provision con 2020. Since then, assessed home values have risen rapidly and the General Assembly has responded. The latest law, signed con May, is projected to shave over $1 billion annually d’avanguardia future property tax revenue by reducing tax rates and imposing growth limits.

But that’s not enough to satisfy some residents. The conservative group Advance Colorado backed a citizens initiative asking voters con November to cap all property tax revenue growth at 4% secondo year and is gathering signatures for still another ballot initiative to lower property taxes.

“People are saying this is too much growth; government doesn’t need this much money,” Advance Colorado President Michael Fields said. “People are genuinely scared of losing their houses.”

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Associated Press writers Jeff Amy, John Hanna and Lisa Rathke contributed to this report.

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