States Eye Big Changes to Property Taxes — But Replacement Plans Raise Big Questions

Across the country, several states are considering major overhauls—or even total elimination—of property taxes, a move that could reshape how essential services like schools, roads, and emergency services are funded. As the conversation heats up, ReadySetLoan is here to help you understand what’s at stake for homeowners and future buyers alike.

Rising Housing Costs Are Driving the Debate

With home values continuing to climb and inflation pushing up living costs, many Americans are feeling the squeeze. Some elected officials see abolishing property taxes as a way to offer relief. But while the idea is popular among voters, it opens up difficult questions: how will states and local governments fund vital services without that steady revenue?

At ReadySetLoan, we often remind our homebuyers that property taxes are a critical part of the total cost of homeownership. Any changes to how they’re assessed—or whether they exist at all—can have a direct impact on affordability, home values, and even mortgage approvals.

Different States, Different Strategies

Some states are proposing dramatic changes:

🐽 North Dakota is offering homeowners up to $1,250 in property tax credits, funded by oil and gas revenues, and aiming for a "path to zero" property taxes in coming years.

🐽 Florida Governor Ron DeSantis is pushing for a constitutional amendment to eliminate property taxes entirely, proposing to replace lost revenue with higher sales taxes—largely aimed at tourists.

🐽 Wyoming gave homeowners a 25% tax break on the first $1 million of home value, but without full replacement funds for local governments.

🐽 Montana considered taxing short-term rentals instead of owner-occupied homes but ultimately rejected the plan.

🐽 Illinois is studying whether higher income taxes on top earners could allow for cutting property taxes—but early analyses show revenue gaps remain.

Meanwhile, Pennsylvania lawmakers have introduced a bold constitutional amendment that would abolish property taxes by 2030, arguing that taxing property ownership violates personal liberty. However, no firm replacement plan for the $23 billion in annual revenue has been detailed yet.

The Big Catch: Funding Local Services

Experts warn that eliminating property taxes could seriously strain local budgets. Schools, emergency services, parks, and road maintenance are primarily funded through property taxes—making up roughly 73% of local revenue, according to the Tax Foundation.

Manish Bhatt, a senior policy analyst at the Tax Foundation, cautions:

"Cutting property taxes entirely could undermine the very services that make communities attractive and valuable."

Without stable property tax revenue, states might have to lean heavily on less predictable sources like sales taxes, which fluctuate with the economy. That could hurt both homeowners and renters, leading to service cuts or even dropping property values—a risk that future buyers should keep top of mind.

RSL Perspective: A Double-Edged Sword

At ReadySetLoan, we view these proposals with cautious optimism. While lower property taxes could reduce monthly costs for homeowners, the bigger picture matters: the strength of local schools, public safety, and community amenities often adds value to your home.

As you explore homeownership opportunities, stay informed about proposed tax changes in your area. An affordable mortgage payment is crucial—but so is investing in a community that retains its value over time.

Looking for expert guidance on how property tax changes could affect your homeownership journey?

Visit ReadySetLoan — your trusted partner for mortgage education and strategic advice.

We'll help you navigate today's market with confidence.

www.ReadySetLoan.com