MANY HOMEOWNERS HAVE SEEN their property values shoot up as the pandemic sparked a frenzied housing market. Home prices logged a 19.1% annual gain nationwide in October, with even larger returns in fast-growing cities, including Phoenix (32.3%), Tampa (28.1%) and Miami (25.7%), according to the S&P CoreLogic Case-Shiller National Home Price Index. If you’re envisioning big proceeds when you sell your house, rising home prices are a cause for celebration.
But you may not feel like popping the champagne when you get your property tax bill. As home prices climb, property taxes follow suit. Your tax bill is determined by multiplying your home’s assessed value by the local tax rate. The average tax bill on a U.S. single-family home was $3,719 in 2020, up 4.4% from 2019, according to the most recent property tax analysis from Attom Data Solutions.
Homeowners will see higher taxes in 2022 and beyond as localities reassess property values, although the pain should ease as price appreciation slows. Kiplinger expects housing demand to cool, with home prices lifting by 3% in 2022. And keep in mind that local tax rates affect your bill, too. If your municipality lowers rates to provide relief or stay within required levels, your bill may fall or show only a modest increase.
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