Lessons On Property Taxes From A 20-Year Homeowner

When my husband and I bought our New Jersey home more than 20 years ago, we were thrilled to have found a house that checked nearly all of our boxes. That list included lower property taxes — one of the hidden costs of homeownership that can make it harder to afford to buy.

For four years, my husband and I basked in the glow of those low taxes. We faithfully paid our quarterly bill, oblivious to what lay ahead.

Today, our “low” tax bill is anything but. In 20 years, our costs have increased 134 percent, including one $1,500 jump that especially stung. New Jersey has some of the highest property taxes in the U.S., but homeowners nationwide have seen a similar upward trend. What’s behind this rise, and what can you do about it?

Why are my property taxes so high?

The median property tax payment for a single-family residence last year was $3,018, according to Cotality, and in just the last five years, taxes nationwide increased an average of 27 percent. That’s thanks in large part to rising home values.

“In the majority of markets, real estate has been going up since COVID,” says Colton Pace, CEO and co-founder of Ownwell, a company that helps homeowners reduce costs, including with property tax appeals. “While people’s salaries have gone up by 10 or 20 percent, the tax bill may have gone up by 50 percent. That’s a divergence that gets harder and harder for the American homeowner.”

Yet property taxes are necessary, funding everything we all rely on, like roads, schools and other public services. If your town’s population is growing, it’ll need more infrastructure — and tax revenue — to support that expansion.

Changes in exemptions or tax laws can also shift how much you owe. Even inflation plays a role.

“All of these combining factors are increasing this expense that already was the second-largest cost associated with homeownership,” Pace says.

Know the property tax triggers

1. When a home changes hands

The sale of a home is what Manish Bhatt, senior policy analyst at the Tax Foundation, calls a “triggering event.” That means that in the year or years following a sale, your local tax authority might reassess the property to the upside.

“Maybe the person bought the home in 1970 for $50,000 and now they’re selling it in 2025 after living in it for decades,” Bhatt says. “Now, that house is worth $600,000. It’s going to reset at that new $600,000 valuation because that’s what the person paid for it. That’s what causes these dramatic increases in taxation.”

2. When a home passes down

There are other triggering events, as well. After my brother and I inherited our mother’s house, the taxes more than doubled after the removal of two exemptions, including one for seniors. To add insult to injury, the tax authority hit us with a $3,500 bill to recoup the discounted taxes we paid for a year while in probate.

That’s why, before buying a home, it’s crucial to know not only the area’s property tax rate, but also what your bill might adjust to after the sale or ownership change.

“Most real estate agents are pretty smart about this,” Pace says. “Ask them: ‘What’s going to happen? What’s my new tax-assessed value going to be? Then what rate will I be multiplying it by?’ If you have an exemption, that rate might be lower or higher. Then you could get a realistic picture.”

3. When a home gets an upgrade

Renovating can make your home more livable and increase its appeal, but also boost its value and, in turn, your property taxes.

“It’s discouraging to people who would like to renovate their home, as it could trigger a much higher assessment and they don’t have the means to pay that [higher tax bill],” Bhatt says.

Cosmetic changes like painting or minor landscaping typically won’t lead to higher taxes. Major renovations, however — such as those that require a permit or an inspection — might trigger a reassessment.

You might be able to keep a renovation under wraps for a little while, but “we know that county assessors travel around and photograph properties to make sure the properties are the [ones] they thought they were a year ago and the same properties that they are today,” Bhatt says.

Tax caps and other ways to save

For some homeowners, property tax caps have softened the blow. Here’s the catch: Not every state allows caps, and the states that do have different ways of approaching them. An assessment limit, for instance, caps how much your home’s assessed value can rise, while a rate limit caps how much your local authority can increase the tax rate. A levy limit puts a ceiling on how much property tax revenue the government can collect.

Should you appeal a property tax assessment?

There isn’t any uniformity in how, when and how often local governments assess a home’s value. For example, your town might base assessed values on the last sale price, comparable sales, how much the home will sell for or the home’s size or location. There might be several years between assessments, as well.

What if you think your valuation is off the mark? Though it’s a bit of a hassle, you can appeal the assessment.

“Different jurisdictions have different rules around the appeal process,” Bhatt says, “but it’s not infrequent and taxpayers have been successful in challenging valuations and challenging overall liability.”

While I won’t be appealing my home’s assessment, the house I inherited from my mother is a different story. To say the home is in very poor condition would be an understatement. It’s not worth anywhere near the assessed value.

“The tax assessor may assume that things have been updated, and if they have not, you should tell them,” Pace says. “That happens a lot in that they’re using the sales in that neighborhood. Those sales are probably renovated homes. They’re probably new builds.”

Pace says there’s limited downside to challenging the assessment, because “in the majority of geographies, your assessment cannot go up.”

Be prepared to demonstrate why you believe the assessment is inaccurate. You might take pictures of extensive water damage, for example, or a crumbling foundation or failing roof.

Be sure to act quickly, too.

“When there is a new assessment, that window is often very short,” Pace says. “You may have to file an appeal within 60 days. If you’re not paying attention and right on top of it, in some geographies, it’s as little as 20 days.”

While I missed the filing deadline for this year’s tax season, I’ll be ready to appeal the assessment of my mother’s home next year, and look forward to sharing my story with you then.