Soaring property values now turning into big tax bills

With home values surging since the pandemic, homeowners nationwide are now receiving new, bigger property tax bills as a result. These hikes can be really hard to budget for, especially if they catch you off guard.

But there are some things you can do.

Homeowners await new tax bill

Walt Benn has been checking his mailbox every day, knowing a significant property tax bill is coming soon. Like many homeowners, he tracked down his new property valuation and tax rate online at the county website.

“I found it,” he said, “and it was amazing.”

He’ll now have to pay $600 more in property taxes in 2024.

“It is up about 28% right now,” he said. “What, did they think people weren’t going to notice?”

Home appreciation like Benn is experiencing is happening nationwide, up almost 5% in the last year, according to S&P CoreLogic’s latest home price index. And in some markets, that increase is much more.

Jacob Channel is a senior economist for LendingTree.

“One of the side effects of rising home prices,” he said, “is that you end up with higher property taxes.”

He says the dramatic surge started in 2020 during the pandemic and can be a tough pill to swallow for many homeowners when their tax bills follow suit. He says many homeowners now have to make spending cuts elsewhere to pay the new bill.

“You do want to budget accordingly,” he said.

But there is a silver lining if you plan to sell in the future.

“Rising real estate taxes means that the value of your property is also increasing,” Channel said, although taxes don’t follow valuations proportionally in many cases. 

Sometimes, your home’s value can increase without a similar tax hike.

What you can do

But you can fight back. If you think your valuation isn’t proper, for instance, if your taxes jumped much more than your neighbor’s, you can appeal.

“You can argue,” Channel said. “In some cases, that can work. Do keep in mind, though, that there’s no guarantee.”

If you live in Ohio, find out how to challenge your new valuation here. Other states have similar systems in place.

Channel admits it can be very frustrating since people in the same city or even neighborhood can pay vastly different amounts.

Walt Benn is now considering an appeal of his increase.

“It pinches me a lot,” he said. “With everything going on in the country, like inflation, shrinkflation, greedflation, whatever you want to call it, it stinks.”