Why Property Taxes Are Becoming a Bigger Budget Strain for Homeowners
When you think of the cost of owning a home, your mind probably jumps to your mortgage payment, insurance, or maybe maintenance. But there’s another piece of the puzzle that’s quietly eating into more household budgets every year: property taxes.
Although they’re not typically the largest line item in a monthly housing bill, property taxes have steadily become a heavier burden for homeowners across the country.
Property Taxes Are Rising — and Homeowners Are Feeling It
According to CoreLogic data from 2024, homeowners are paying 27.4% more in property taxes than they did just five years ago in 2019. This increase isn’t just a financial statistic—it’s a real pain point for many households. A March 2024 survey by Ownwell found that 67% of homeowners who budgeted for property taxes said their bill ended up being higher than expected this year.
That sense of sticker shock isn’t limited to older generations either. Gen Z homeowners are also feeling the squeeze, with property taxes cited as the most underestimated cost of homeownership, according to a recent Insurify poll.
This growing disconnect between what homeowners expect to pay and what they actually owe highlights a bigger issue: rising property tax bills are making it harder for people to plan ahead and budget effectively.
Not Just About the House: What Actually Drives Your Property Tax Bill?
It’s important to note that these increases don’t necessarily mean tax rates are higher — many times, it’s home values that are rising. The figures mentioned above reflect median property tax bills in each state, not home prices or the actual tax rates. That means what you pay will vary depending on:
- Local housing costs
- State and municipal tax structures
- Available tax exemptions or abatements
In places where there’s no state income tax, property taxes often step in to fill the gap for funding local services. That’s especially the case in Texas and New Hampshire, both of which have some of the highest median property tax bills in the U.S.
By contrast, other no-income-tax states like Alaska and Nevada can lean more heavily on oil revenue or tourism to support public services.
Then there’s California, a bit of an outlier. Even though it’s home to some of the highest real estate prices in the country, the state has relatively moderate property tax bills. That’s due to assessment caps (thanks to Prop 13) and an exemption for owner-occupied homes. Similarly, Hawaii keeps property taxes relatively low — despite its sky-high home prices — by using a general excise tax as a primary revenue source instead.
