Lawmakers in several states pursuing property tax reform measures
As property taxes continue to climb across the country, lawmakers in several states are pursuing property tax reform measures. (Getty Images)
As property taxes continue to climb across the country, lawmakers in Florida, Illinois, Kansas, Ohio, Pennsylvania, and Texas are looking for ways to provide property tax relief to homeowners, while Montana has established property tax relief.
What are property taxes, and how are they calculated?
Homeowners across the country pay property taxes levied by cities, counties, and school districts, based on the assessed value of their property.
The assessed value is not always the same as the home’s market value, and it varies by state.
Dig deeper:
Calculating Property Taxes
Property taxes are calculated by a formula:
Assessed value of the home × Tax Rate (also referred to as the mill rate – or millage rate) = Property Tax
Example
$300,000 x 1.00% = $3,000
Millage rates vary from state to state. Most taxing authorities have calculators on their websites to assist homeowners with calculating their property tax assessment.
What is a homestead exemption when calculating property taxes?
Several states offer homestead exemptions that reduce the taxable value of a homeowner's primary residence, leading to lower property taxes.
A homestead is an exemption that homeowners can apply for to reduce the property tax bill. Not all states offer homestead exemptions, but for the states that do, there are various types offered, such as low-income homeowners, veterans with a disability rating, a person with a physical or mental disability, and senior citizens. Homeowners should check with their taxing authority to find out what homestead exemptions are available and how to apply.
Calculating Property Taxes with a homestead exemption
Example
The assessed value of the home is $300,000, and you qualify for a $50,000 homestead exemption. This results in an assessment of $250,000.
$250,000 x 1.0% = $2,500
In this example, the homeowner saves $500 in property taxes.
By the numbers:
Florida’s approach to property tax relief
Big picture view:
The sunshine state is one of eight states that does not impose an income tax.
Earlier this year, Florida Governor Ron DeSantis proposed eliminating property taxes for homesteaded properties altogether and wants to have a constitutional amendment on the November 2026 ballot which would require 60% voter approval to pass.
He also wants to provide immediate property tax relief with a rebate averaging $1,000 for over 5.1 million homesteaded properties across the state. The rebates would be issued in December covering state-mandated school property taxes and ensure that school districts are funded while at the same time providing financial relief to Florida homeowners.
The governor says the state has a strong revenue position and needs to use it to benefit full-time residents.
Illinois' approach to property tax relief
Big picture view:
Homeowners in Illinois pay some of the highest property taxes in the country. A bill introduced in the Illinois Statehouse would exempt property owners who have owned their home for 30 years from paying taxes on the home.
The bill states that "taxpayers who have been granted an exemption to reapply on an annual basis. Provides that the assessor or chief county assessment officer may determine the eligibility of residential property to receive the homestead exemption by application, visual inspection, questionnaire, or other reasonable methods."
If approved, only occupied single-family homes would be eligible.
Kansas’ approach to property tax relief
Big picture view:
In Kansas, House Concurrent Resolution (HCR) 5014 proposes to amend article 11 of the state constitution by adding a new section to establish the Freedom From Taxes Fund, establishing a Kansas Citizens Freedom Review Board which would review tax exemptions and approve or eliminate such exemptions.
The savings from the elimination of the exemptions would be placed in a fund and over time accumulate enough to eliminate state-imposed property taxes. It’s projected to take several years for the fund to accumulate enough to offset the statewide property tax collection amount.
Montana’s approach to property tax relief
Big picture view:
The Big Sky state saw a huge influx of residents during the COVID-19 pandemic, which triggered a major surge in home prices and property taxes.
To provide relief to homeowners, the state established a property tax rebate and homestead exemptions.
Senate Bill 542 established a property tax rebate for a resident's primary home. Eligible homeowners may qualify for the rebate of up to $400 for property taxes paid in 2024.
House Bill 23 established a new Homestead Rate for 2026, which lowers the property tax rate for long-term rentals and primary residences, resulting in savings.
Ohio’s approach to property tax relief
Big picture view:
Lawmakers in Ohio’s House of Representatives and Senate voted to override a veto by Governor Mike DeWine to provide homeowners with property tax relief.
DeWine had used his line-item veto power to strike down a budget provision that aimed to phase out certain types of local tax levies, such as replacement, emergency, and substitute levies used by school districts. The levies generate additional revenue as house values have increased, driving up property tax bills.
Pennsylvania’s approach to property tax relief
Big picture view:
The State of Pennsylvania currently has a Property Tax/Rent Rebate Program that assists homeowners and renters across the state. The program provides a rebate ranging from $380 to $1,000 for eligible older adults 65 and older, widows and widowers age 50 and older, and people with disabilities who are 18 and older. The household income must be $46,520 or less annually to qualify. Funding for the program comes from the Pennsylvania Lottery and gaming.
There is a proposal to eliminate the collection of school taxes across the state. Senate Bill 929 would prevent school districts from collecting property taxes beginning on July 1, 2029. To replace the funding, sales taxes and income taxes would be increased.
Texas’ approach to property tax relief
Big picture view:
Like Florida, Texas has no income tax and relies on property taxes to fund services.
In November, Texans will decide on whether to approve three constitutional amendments that address property taxes.
House Bill 9 would increase the business personal property tax exemption from $2,500 to $125,000 while Senate Bill 4 increases the mandatory school district residence homestead exemption to $140,000 and Senate Bill 23 increases the mandatory school district residence homestead exemption for people over 65 and disabled individuals to $200,000.
Texas Governor Greg Abbot says more needs to be done to further limit the ability of local governments to raise property taxes.
What they're saying:
The impact of eliminating or reducing property taxes
Jurisdictions rely heavily on property taxes to fund schools, community health programs, and other public service programs.
According to the Tax Foundation, property taxes currently generate 70 percent of all local tax revenue and making up that total dollar amount is very difficult.
The Tax Foundation says to make up lost property tax revenue, states and local governments would have to seek out new funding sources such as increases in sales tax rates. This could be seen as shifting tax burdens disproportionately to lower-income residents and renters.
The Source: Information for this article was sourced from the Florida Governor’s Office, the State of Illinois Senate, the Kansas Legislature, the State of Montana, the State of Ohio House and Senate, the Pennsylvania State Senate, The Texas Governor's Office, The Tax Foundation, Rocket Mortgage, Quicken Loans, Lending Tree, and FOX Business. Chart data was sourced from Rocket Mortgage. This story was reported from Orlando.