Curtis Roddy, CEO @ RealTrac Info Systems, on Property Taxes

Homeowners in many cities across the United States are seeing an increase in property tax bills thanks to price appreciation. While it varies by city, properties are typically assessed every three years. Between 2017 and 2018 alone, homes across the country appreciated more than 6% in value.

One of the best examples of rising tax bills can be seen in Chicago, where the most recent reassessment was in 2017. In Chicago, the tax on a home is 10% of the property’s estimated market. This gives a $1 million home a $100,000 assessment. In some areas of the city, homeowners have seen assessments spike by up to 50% or more with a corresponding property tax hike.

In the city proper and northern suburbs, the average homeowner will see a 3% property tax increase while southern suburbs will see an increase of around 5%.

Special initiatives can also be behind increasing property tax bills. In Los Angeles, voters approved a new parcel tax called the Safe Clean Water Parcel Tax which will increase property taxes by 2.5 cents for every square foot of “impermeable area” and areas covered by a hardscape material such as buildings, pools, sheds, and driveways. In California, property taxes are 1% of the home’s value in the year it was purchased with increases capped at 2% per year. In 2017 alone, Los Angeles homeowners saw an average 7% tax increase.

According to the most recent property tax report prepared by ATTOM Data Solutions, property taxes increased in 58% of the 217 metro areas analyzed. The largest increases were in Dallas (11%), Houston (10%), Miami (5%), and Philadelphia (4%).

The problem is serious enough that Texas is now considering property tax reform that, if passed, would limit property tax revenue growth to just 2.5% per year. In many cities across the country, large tax bills have left many homeowners fearing being taxed out of their homes. In North Texas, homeowners have watched their tax bills rise $1,200 in just five years, an increase of 40% despite population growth of just 15%. Texas Governor Greg Abbott has gone so far as to call the property tax situation an emergency. While the Texas property tax reform may give homeowners much-needed relief, critics say it’s merely finger-pointing at local governments that aren’t the problem and limiting property taxes may hurt the ability of local authorities to balance their budgets and provide needed services.