More than five years after real estate prices began to tumble, Americans are finally starting to get property tax breaks on their devalued homes, a USA TODAY analysis finds.
Cities, counties and school districts today collect 20 percent more in property taxes than they did in 2006, when home values were one-third higher than now, but the tax tide is slowly starting to recede.
Last year, property tax collections rose just 1.2 percent — and actually declined 0.9 percent when adjusted for inflation, according to data from the federal Bureau of Economic Analysis. That's the first time property tax collections have fallen below the inflation rate since 1995 and only the third time in 40 years.
If the downward trend continues, property taxes may actually bring in fewer dollars this year than last even before adjusting for inflation . That hasn't happened since the Great Depression.
Property taxes generated $436 billion last year, about $66 billion more than in 2006 when home values peaked. Public schools get about 40% of this money. The rest flows to other local governments.
Most states have complex laws that make property tax declines rare, small or long-delayed, even when home values plummet. This makes the property tax stable during economic turmoil, unlike the income or sales tax.Page 1 of 3 | Next Page