Property taxes across the U.S. 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.
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.
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.
Property taxes rose last year even as the average estimated value for single-family homes dropped 1.7% to $494,231 — still among the highest on record but representing a slight year-over-year dip. This shows property taxes are influenced by factors other than property assessments, with some local governments hiking taxes due to the rising cost of providing public services, according to the Tax Policy Center.
“Property taxes often rise faster than inflation because they’re driven by local government funding needs, not consumer prices,” ATTOM chief executive Rob Barber told CBS News. “Municipalities may increase tax rates or maintain higher levies to keep up with rising costs for schools, infrastructure and public services, regardless of broader inflation trends.”
Where property taxes are falling
While property taxes rose in 40 states and the District of Columbia last year, they fell in 10 states, mostly in the West, according to the ATTOM analysis.
Those declines reflect a push in some states to reduce property taxes, with Wyoming lawmakers approving a 25% cut for properties valued at up to $1 million. About 8 in 10 Montana homeowners got a property tax cut last year because of a new law that introduced a rebate and a tiered tax system.
“In states with year-over-year declines, property tax reductions are typically driven by policy changes and alternative revenue sources rather than just home price trends,” Barber said. “Strong revenues from sectors like energy or tourism can ease reliance on property taxes, while legislative actions such as rate cuts or tax relief measures can further lower the overall burden.”
Homeowners in the Northeast, California and Illinois typically pay the most in property taxes, with the average New Jersey homeowner paying about $10,500 a year, the analysis found. The lowest property taxes were in West Virginia, with an average levy of $1,081 per home.
Alain Sherter
