Property taxes. Do you tolerate them, hate them or just wish they’d remain stable?
Whichever you’d prefer, these taxes have a long history. Collecting revenue from property owners evolved centuries ago in Europe. The practice continued in colonial America.
During the American Revolution, ever-increasing tax rates brought complaints and a demand for change by taxing real property on value instead of a per-acre basis. The 1800s saw states revise their constitutions by adding universality and uniformity provisions. Subjecting all taxable property to a uniform rate was thought to reflect a more balanced tax code.
But taxing assets at the same rate led to another problem: Who was assessing the true value and was the assessment fair?
In the early 1900s reformers argued that property and some intangibles should be taxed separately. Better assessment methods were enacted, property was coded and classified, and collected taxes were used for more specific purposes.
After World War II, rising home values increased real property taxes in the US, and taxpayer complaints turned into a taxpayer revolt. In 1978, Californians voted for Proposition 13. A constitutional amendment in 1995 gave Floridians the “Save Our Homes” Act. Both measures imposed limitations on property taxes.
Over the last few years a real estate boom pushed up America’s housing prices and increased assessments in many states. Higher real property taxes were good for local governments funding public services such as school districts, libraries and fire protection. But the increases were not so good for homeowners, landlords—and in a trickle down effect—renters.
In an effort to stabilize property taxes, some legislatures have been offering discounts, tax breaks and rebates. Others have suggested cuts in spending or raising income or sales taxes.
What relief eventually emerges may be a patchwork combination of these approaches. But no matter the final outcome of the property tax debate, you’ll still be entitled to your opinion, free of charge.