PRESIDENT'S MESSAGE

In the USA, it is reported that property taxes are rising faster than inflation with the average homeowner last year paying $4,427, up 3.7% from 2024, according to a new analysis from real estate data firm ATTOM.

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By comparison, the Consumer Price Index – a basket of commonly purchased goods and services – rose 2.7% last year. Homeowners in some states have faced considerably larger property tax increases, including an 18% hike in Delaware and an 11.6% jump in Maryland.

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Property taxes are typically levied by local governments to raise revenue for public services, including public schools, road construction, and police and fire departments. They account for 70 cents of every dollar in local tax collections, according to the nonpartisan Tax Foundation.

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• Property taxes currently generate 70 percent of all local tax revenue, some or all of which would have to be replaced with other taxes under property tax repeal.
• Replacing the property tax with newly granted local taxing authority is exceedingly difficult, because local sales and income tax bases vary widely across jurisdictions; there may, for instance, be no feasible sales tax rate by which an agricultural county or bedroom community could replace its property tax revenue.
• Backfilling forgone local property tax revenue through new state taxes is difficult because it dramatically shifts overall tax burdens, undermines local accountability, and cannot easily adjust for changing population mixes.
• All revenue alternatives are less conducive to economic growth than the existing property tax regime, but some transfer regimes are sharply degrowth.