New research by NAHB economist Natalia Siniavskaia estimates effective property tax rates for homeowners by state and metropolitan areas. Using data from the Census Bureau’s American Community Survey, the analysis indicates significant increases in effective property tax rates, in large part due to housing price declines and lags in property tax assessments.
For example, the effective property tax rates for homeowners in California and Nevada increased by more than 50%, illustrating how property tax collections lag changes in the underlying value of the taxed property. Similar results are found for metropolitan areas.
These conclusions are consistent with our previous post looking at overall property tax collections, which have in fact increased during and after the Great Recession. And they highlight the importance of housing, and home values, as a revenue source for state and local governments.