Homeowners Want Rising Values but Falling Property Taxes, and the Math Doesn't Work
I Would Like the Value of My Home to Rise, While My Property Taxes Fall
David Schleicher's paper "The Great American Property Tax Freak Out" examines recent state reforms that slash property taxes for owner-occupied homes and shift the burden to commercial property owners, other local taxes, and state funding. Because property taxes are wealth taxes, homeowners angered by rising values have pushed for relief, but the result is higher housing costs and a wealth transfer to existing owners, making homeownership costlier for future buyers.
The ironic outcome is that higher housing prices cause voters to want to limit or repeal property taxes, which would then lead to even higher housing prices.