Why property taxes have become a flashpoint for older homeowners

Most Americans pay property taxes on their homes, even after the mortgage is gone. For many baby boomers, that reality has become deeply frustrating, as JR Duren reports.

A 92-year-old Pennsylvania woman died after years of worsening health and a protracted fight over unpaid property taxes.

Gloria Gaynor, who had been bedridden, racked up $3,500 in overdue property taxes in 2020. Later, she faced eviction after a company bought the debt from Delaware County at auction and placed a lien on her home, ABC7 reported.

Cases like this have fueled fear among many retirees and helped drive a growing push within the baby boomer generation, defined here as people aged 62 to 80, to eliminate property taxes altogether.

Supporters have taken to social media to argue that paying taxes on a home they already own outright is essentially the same as paying rent. “We worked our entire lives to retire with no mortgage - which we accomplished. But it still costs me almost $500 a month in property taxes to be allowed to stay in our home. This is wrong,” one Florida retiree wrote.

Critics, meanwhile, say property tax revenue is essential and that public safety and community services would suffer without it.

According to homeowner consultancy Ownwell, the median U.S. property tax bill is $3,209, or about $267 a month. New Jersey has the highest median bill at $8,638, while West Virginia has the lowest at $629.

Although local governments depend on property taxes to support public schools, fire and police departments, trash collection and public health programs, the effort to ease or remove them for seniors has found political backing.

Florida Republican Governor Ron DeSantis has emerged as a leading advocate and has pushed a state amendment that would cap property taxes. He has said he ultimately wants to abolish them.

“Our nation was forged by pioneer patriots who left everything behind and risked their lives for the dream of living in freedom on their own piece of property,” Florida Republican Senate President Ben Albritton said. “We agree with Governor DeSantis that having to continually pay the government for the right to live on your own property flies in the face of that dream.”

Other politicians, including Texas Republican Governor Greg Abbott, have also called for lower property taxes and for the removal of certain tax burdens to improve housing affordability.

Republican Representative Nancy Mace, who is leaving Congress to return to the private sector, has also voiced support. “Seniors should not pay property taxes,” she wrote on X.

Colonial roots

Property taxes stretch back to ancient times, but in the United States they became more firmly established in the 19th century, according to the Economic History Association. By the end of the 1800s, 21 states had adopted the modern version of the tax: a levy based on a home’s estimated value.

“Property taxes date back thousands of years,” Jenna Stauffer, a broker with Sotheby’s International Realty, told The Independent in an email. “In the U.S., they became a major source of revenue during colonial times and eventually helped fund communities and public services.”

Public opinion toward U.S. property taxes has deteriorated sharply since 1992, according to the National Council of State Legislatures. The shift is not tied to a policy change; instead, home prices have roughly tripled since then, federal data show, and property tax bills rise as home values increase.

By the latest polling, property taxes are even more unpopular than federal income taxes and sales tax. In a UChicago Harris/AP-NORC survey of 1,024 adults, 69 percent said their property taxes were too high, compared with 67 percent for federal taxes and 62 percent for state sales tax.

Funding the fundamentals

Property taxes remain a crucial source of funding for local government, said Ohio-based real estate attorney Kellie McIvor, who is vice president of acquisition at Redwood Living, Inc.

“On average across the US, police departments receive about 86% of their funding from property taxes,” McIvor told The Independent in an email.

“Schools receive an average of 40 to 60% of a property tax bill. To a lesser extent, property taxes also fund fire departments, parks [and] local government, including road repair and community centers.”

In many cases, a mortgage company pays property taxes on the homeowner’s behalf. In others, homeowners pay the bill directly.

Once the mortgage is paid off, the tax obligation remains. And because property tax bills often rise as home values climb, retirees can be hit especially hard since their income is usually fixed and may not keep pace with those costs.

In several major U.S. cities, property tax bills rose by double digits, according to housing data firm ATTOM:

• Memphis: 34 percent
• Baltimore: 27 percent
• St. Louis: 11 percent
• Houston: 10 percent.

“Seniors are in a tough position, with fixed incomes and no certainty about how long their savings need to last,” McIvor said. “Many have limited ability to earn additional income to make up a savings shortfall.”

Why boomers should get a break…

The central case made by supporters of ending property taxes is simple: many boomers have already paid off their homes and believe they should not have to keep paying to remain in them.

“You spent 30 years paying off your mortgage and now you still owe money every year just to stay in your own house?” a user wrote on Reddit. “If you stop paying you can lose it? That doesn’t feel like ownership to me.”

Florida real estate agent Jon Sterling says he understands the frustration of seniors who want property taxes eliminated, echoing the social media argument that the levies amount to “rent” paid to local government.

“I like the idea of retirees being free from paying property taxes,” Sterling told The Independent in an email.

“They paid taxes their entire lives and shouldn't have to continue paying ‘monthly rent to the county’ for an asset they own. Considering the very real financial challenges in the Social Security system, eliminating property taxes for seniors would be a winning scenario for those people.”

Questions about Social Security’s long-term stability also loom large for retirees and policymakers. A key funding source for monthly benefit payments is projected to run out in 2032. If that happens, benefits could be cut by 22 percent, according to the Social Security Administration.

That prospect could further strain older homeowners already paying thousands of dollars a year in property taxes.

…and why they shouldn’t

Those opposed to eliminating property taxes for retirees argue that local services would be badly hurt by the loss of revenue.

“Police, school, and library budgets would be decimated,” McIvor said. “Fire, park, and local governments, who receive some funding from property taxes, would also face a budget shortfall. Municipalities would be forced to scramble for alternative funding sources or lose valuable services. That loss of services means program and job cuts.”

In some places, governments would simply replace the money by raising other taxes, said Michigan-based real estate Michael Perna in an email to The Independent.

“The money needs to come from somewhere,” he said. “Sales tax, income tax, and excise taxes, like taxes on tobacco, alcohol or gas would need to be increased.”

Experts may explain the trade-offs in straightforward terms, but social media users often respond more bluntly.

“You like driving on a paved street?” one user replied to a Reddit post about property taxes. “You like educated kids? You like drinking/bathing water? You like having police on the streets? All that and more is what your taxes pay for.”

A happy medium

Some states have tried to strike a balance between the competing sides of the debate.

New York’s Enhanced STAR program, for example, offers a property tax exemption on the first $88,500 of a home’s value for qualifying residents aged 65 and older, according to Jehan Crump-Gibson, managing partner at Great Lakes Legal Group in Michigan.

Michigan allows homeowners to defer summer property taxes until February 14 without penalties or fees, Crump-Gibson said.

Florida also offers relief through a homestead exemption, which can reduce a property’s taxable value by as much as $50,000, according to the Florida Department of Revenue.