The Great Debate: Are Low Property Taxes Better for Individuals or Communities as a Whole?

Property taxes have been a concept for over 6,000 years and have been advocated by economists, but homeowners tend to disagree. Bloomberg explores whether low property taxes are better for individuals or if a deep tax pool benefits the community as a whole. The article examines the pros and cons of living in areas with low property taxes.

New Jersey has the highest property taxes in America, with real estate taxes averaging 2.26%. In comparison, Hawaii’s property tax averages 0.27%. The cost of high property taxes affects not only homeowners but also renters since landlords pass on the cost. Homebuyers in areas with lower property taxes can afford more expensive homes and have an easier time qualifying for mortgage loans. Lower property taxes also result in higher home values when it comes time to sell.

One significant drawback of low property taxes is public education. Property taxes fund public schools, and higher property taxes lead to higher per-pupil spending, resulting in a better classroom experience. Lower property taxes may also deter investors or builders from launching new home construction projects, leading to an overall neighborhood decline.

Property taxes provide funding for public education, emergency services, infrastructure, and animal shelters. Half of property tax revenue goes to public education. Some people see property tax as a progressive tax benefiting lower-income households, while others view it as regressive.

Property taxes can be difficult for long-term budgeting and are conspicuous since they require homeowners to deliberately hand over their money to the government. Although both sides have strong cases, property taxes are still an easy tax to hate.

A report by GOBankingRates on February 26, 2023, and an investigation report by Bloomberg largely contributed to this report.