Why Property Tax Increases Vary So Much Across the U.S.

Rising property tax bills can hit unexpectedly, causing homeowners to question the long-term affordability of their property. What many don’t realize is that property tax increases aren’t just about inflation; they’re shaped by local politics, real estate values, funding priorities, and assessment cycles. These dynamics vary dramatically by region.

In this blog, we’ll break down why property tax increases differ across states and counties, why Pittsburgh and similar cities are under pressure, and how you can challenge or manage rising taxes before they disrupt your financial stability.

What Are Property Taxes and How Are They Calculated?

Property taxes are levied by local governments, usually counties, cities, and school districts to fund public services such as schools, police, fire departments, roads, and sanitation. The amount you pay depends on two primary components:

1. Assessed Value – This is the taxable value of your home, determined by the local tax assessor.
2. Millage Rate – A rate expressed in “mills” (a mill is $1 per $1,000 of assessed value), which is set by the taxing authority.

If your home is assessed at $200,000 and the millage rate is 20 mills (2%), your tax bill is $4,000 annually. Even if the millage rate remains the same, your tax bill can rise if your home is reassessed at a higher value.

Regional Differences in Property Tax Rates

Where you live significantly impacts how much you pay in property taxes. States have different tax structures and local funding needs. Some states fund services through income or sales taxes, while others lean heavily on property taxes.

Let’s look at how the states compare:

Top 10 Highest Property Tax States (Effective Rate %)

1. New Jersey (2.23%) – High school funding demands and local fragmentation make it the highest in the U.S.
2. Illinois (2.08%) – Significant pension liabilities and municipal costs keep rates elevated.
3. Connecticut (2.04%) – Dense local governments and public service costs drive up tax burdens.
4. New Hampshire (1.96%) – No state income or sales tax means property taxes carry the load.
5. Vermont (1.90%) – Property taxes fund a large portion of state-wide education expenses.
6. Texas (1.81%) – With no income tax, local school districts depend on property taxes.
7. Nebraska (1.73%) – Education and public safety dominate local budgets.
8. Wisconsin (1.63%) – High investment in education and infrastructure.
9. Ohio (1.62%) – School district levies drive up local rates.
10. Rhode Island (1.54%) – Small size and dense infrastructure keep taxes high.

Top 10 Lowest Property Tax States (Effective Rate %)

1. Hawaii (0.32%) – Revenue from tourism and investment properties offsets local tax needs.
2. Alabama (0.39%) – Constitutional caps and low public spending limit increases.
3. Colorado (0.52%) – Taxpayer Bill of Rights (TABOR) limits local tax growth.
4. Nevada (0.55%) – Casino and tourism income support public services.
5. Louisiana (0.56%) – Oil and gas royalties reduce reliance on residential taxes.
6. South Carolina (0.57%) – Aggressive homestead exemptions keep taxes low.
7. West Virginia (0.59%) – Low property values and minimal public services.
8. Wyoming (0.61%) – Energy sector funding supplements government budgets.
9. Arkansas (0.62%) – Conservative fiscal policies and low service levels.
10. Delaware (0.64%) – Small government footprint and reliance on other tax types.

Why Pennsylvania is not in the Top 10

At first glance, Pennsylvania doesn’t crack the top 10 states for highest property taxes; its average effective rate sits around 1.26%, according to the Tax Foundation. However, this statewide figure masks significant regional variation. In areas like Allegheny County, total millage rates including county, municipal, and school district taxes — can exceed 24 to 36 mills, translating to an effective rate of 2.2% to 2.8% of assessed value.

This local variation means that while Pennsylvania isn’t a top-tier tax state overall, homeowners in certain boroughs and school districts may pay more annually than those in traditionally high tax states. When comparing across states, it’s critical to distinguish between statewide averages and localized tax burdens that can substantially impact affordability.

Local Focus – Pittsburgh’s Property Tax Landscape

Pittsburgh’s property tax situation has been in flux. Allegheny County used a 2012 base year assessment for over a decade, meaning many homes were under-assessed relative to market value. A 2023 court order is forcing the county to begin updating valuations, potentially leading to sharp increases for long-time homeowners.

Additionally, Pittsburgh is undergoing revitalization in areas like East Liberty and Lawrenceville. These changes bring both rising home values and increased public investment often funded by local tax levies.

For a full explanation of Pittsburgh’s unique tax structure, read our article: Pittsburgh Real Estate Taxes: What You Need to Know in 2025.

Where Do Pennsylvania and Florida Fit?

Pennsylvania has an average effective property tax rate of 1.49%, placing it in the upper-middle range. Counties like Allegheny have slightly lower rates, but others like Monroe are among the highest in the nation. Much of the tax burden comes from school district levies, and reassessments are inconsistent across counties.

Florida, at 0.91%, is considered a moderate to low tax state, especially for primary residents. The Save Our Homes cap limits annual increases in assessed value to 3%, helping homeowners stay protected from sudden jumps even in hot markets like Miami or Tampa.

What Causes Property Taxes to Increase?

Several key drivers explain why some regions see sharp tax increases:

• Appreciating Property Values – When home prices rise, reassessments follow leading to higher tax bills.
• Public Funding Needs – New schools, infrastructure projects, or emergency services often require more funding.
• Debt Obligations – Cities with pension or bond debt often raise taxes to maintain solvency.
• Population Growth or Decline – Growing areas need more services; shrinking areas raise rates to maintain existing infrastructure.
• Assessment Cycles – Some areas reassess annually (like Massachusetts), while others do so every 10+ years (like Pennsylvania used to in Allegheny County).

Laws That Protect Homeowners from Tax Hikes

Several states have laws that limit how much property taxes can rise in a given year:

• California’s Prop 13 caps annual assessment increases at 2%.
• Florida’s Save Our Homes limits assessment increases to 3% for primary residences.
• Massachusetts’ Prop 2½ caps total property tax increases to 2.5% annually.

These policies help protect long-term homeowners from being taxed out of their properties. However, they can also lead to underfunded services and unfair gaps between new and long-time owners.

For more state by state rules, visit the Lincoln Institute of Land Policies property tax tools.

How to Appeal or Lower Your Property Taxes

Homeowners can appeal assessments if they believe their home’s value is overestimated. Here’s how:

1. Get Your Property Record – Look for errors in square footage, room count, or lot size.
2. Compare Comps – Research recent sales of similar homes in your neighborhood.
3. File a Timely Appeal – Every county has a deadline and process, don’t miss it.
4. Present Evidence – Photos, appraisals, and MLS data can support your claim.
5. Consider Professional Help – Tax attorneys often work on contingency and may increase your chance of success.

What Homeowners Can Do to Plan Ahead

Even if you’re not facing an increase now, here are ways to prepare:

• Review your mortgage escrow annually to ensure it covers anticipated tax hikes.
• Apply for exemptions like the Homestead Exemption or senior deferral programs.
• Track local development projects that could impact home values and assessments.
• Evaluate relocation options in lower-tax counties or states if long-term affordability becomes a concern.

FAQ

Q1: Can property taxes go down?
Yes, especially if property values drop, tax rates are reduced, or a successful appeal is filed.

Q2: How often are assessments done?
This varies widely; some jurisdictions assess annually, others every 3 – 15 years, or only at point of sale.

Q3: Are property taxes included in mortgage payments?
Yes, if you have an escrow account. Your lender collects monthly and pays your taxes on your behalf.

Q4: What happens if I don’t pay?
You may face penalties, tax liens, or eventual foreclosure if the debt isn’t resolved.

Conclusion

Property tax increases are driven by local economics, politics, and housing markets and they’re not going away. Homeowners in areas like Pittsburgh, where reassessments can occur, could be particularly vulnerable to sudden hikes. Understanding how these taxes work, where your state stands, and what your rights are, you can take control of the process.

If you’re worried about a spike in taxes or overwhelmed by needed repairs you might seek selling soon as being the best path forward. At Buys Houses, we help homeowners sell quickly without many delays.

Contact Buys Houses today to learn more about your options.