Will Property Taxes go up in 2024? - Online Income Generation, Income Growth Strategies, Freelancing Income  
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Property taxes in the U.S. are collected by local governments and usually based on the value of the property. The rates can vary from county to county and state to state. Property taxes generally pay for community safety, schools, infrastructure and other public projects.

If you’re in the market to buy a home, you need to consider how much property taxes will cost as part of your overall budget. As with other types of taxes, this is an expense that can generally increase over time.

During the 2023 General Assembly much of the discussion centered on providing property tax relief to homesteads.  Lawmakers’ efforts will result in much more modest tax increases for these owner-occupied homes on 2024 property tax bills.      

According to a presentation by Dr. Larry DeBoer at the Indiana County Commissioners Association conference, net assessed values in 2022 increased by 21% over the previous year. Market-driven forces created the increase and the historic increases in values contributed to the higher property tax payments in 2023. The average net assessed value increase for homesteads grew on average by about 21% in 2022, which was paid in 2023.  Local debt spending, including voter approved referenda, contributed to the increased payments too. 

Multiple provisions in House Enrolled Act 1499 provide relief to all classes of property but most of the relief was aimed at homesteads or primary residences. The net assessed value for homesteads increased only about 3.6% in 2023 and those values will be used for the property taxes paid in 2024.  The more moderate increase is due to the slowing increase in homestead values, but more influential was the statutory, temporary increase in the homestead supplemental deduction from 35% to 40%. 

The increase in the supplemental deduction will result in an 8-10% reduction in the growth of net assessed value of homesteads. Without the temporary increase in the supplemental deduction, the net assessed value of homesteads would have increased between 11-13%.  The 2023 net assessed values for all properties increased nearly 6%; therefore homesteads property tax liability will grow slower than most all other classes of property. 

A smaller increase

Overall, in 2023 homesteads absorbed a much greater portion of the overall property tax burden but in 2024 business real property will grow the slowest followed by homesteads.  

Another provision approved in 2023 that will prevent property taxes from growing as fast in 2024 is a 20% reduction in the property tax growth factor. The change in the growth factor from 5% to 4% for taxes due in 2024 will also influence the growth in property taxes.  

Indiana’s property tax system results in one of the lowest average tax bills in the country for homesteads. All of Indiana’s neighbors have higher property taxes for homesteads. Once 2024 property tax bills are calculated and mailed, “normalcy” should return for homeowners as it relates to property taxes.

So what class of property will grow the fastest in liability in 2024 and perhaps seek relief?    

Farmland property tax bills are expected to grow the fastest as the base rate will increase from $1,900 to $2,280. This assessed value increase is once again due to market factors. The last time the assessed value for farm ground was above $2,000 was in 2015. That resulted in a statutory change in the formula used to determine the value of farm ground.

It is unclear if lawmakers will act in the 2024 session to impact agriculture property taxes.

Virginia Beach property owners have undoubtedly witnessed a consistent improvement in their homes’ assessed value since 2022. Homeowners expect their property values to rise over time, yet assessments have continued to rise since 2020.

It’s crucial to remember that Virginia Beach’s tax rate has stayed consistent at $0.99 per $100 of assessed value, the lowest in our region.

Sue Cunningham, Real Estate Assessor, presented an overview of the 2024 assessments to City Council on February 27. The revenue generated by these taxes accounts for around one-third of the City’s budget and supports services such as public education, fire and police protection, and roadways across our community.

Here are the key points from the presentation.

Assessments Went Up 7.37% 

While assessments did increase, this is the first time since 2021 that the year-over-year increase was not higher than the previous year’s increase. Increases in FY23 and FY24 were 9.2% and 9.7%, respectively. The residential median assessment went up about $21,000 this year compared to $29,000 in FY24 and the $30,000 increase in FY23. 

All told, this represents about $82 billion in property values throughout the city. This figure includes the growth of new properties and the appreciation of existing properties. 

New Housing Units Built More than Doubled 

In 2023, 985 new housing units were built in Virginia Beach, a sharp increase from the 431 new units in 2022. This is closer to the pre-COVID levels of 1,109 units in 2019 and 1,233 units in 2020. 

This includes 314 homes, 665 apartment units and six duplex units. 

Median Value of New Homes Decreased 

In 2023, the median value of a new home decreased $100,000 from $643,100 to $543,100, putting it in line with the median value in 2021. This is the first reduction in new home median values since 2020. 

Tax Relief is Available to Qualifying Residents 

Programs are available for: 

  • Disabled veterans 
  • Energy efficient buildings 
  • Historic landmarks or historically significant structures 
  • Rehabilitated commercial or industrial structures 
  • Senior citizens 
  • Disabled individuals (non-military) 
  • Agricultural, horticultural forest and open-space lands 

Details about these programs can be found under the relief & incentives section of the Real Estate Assessor’s website. 

Assessments Can Be Appealed 

If you believe that your assessment is incorrect, the Real Estate Assessors Office can reassess the value of your property. Hearings to review assessments are heard from March through May.  

What Will the Property Taxes be in 2024 in Indiana?

Last year Indiana homeowners were hit with property tax bill increases averaging 17 percent, an extraordinary increase. Will it happen again in 2024? Let’s compare 2023 to what we know about 2024 so far, and take a guess.

Read Also: Tax Brackets versus the Fixed Tax Rate

The pandemic economy caused home values to spike in 2021. Low mortgage rates and people’s desire for added living space increased demand. Supply was limited by lagging home construction.  Home prices rose 14 percent. County assessors captured those higher values in their 2022 assessments. Gross assessed values rose 16 percent. Those values were used for tax bills in 2023.

Home prices continued to rise in 2022, before higher mortgage rates had their effect. The average increase was 16 percent. We don’t have statewide data for gross assessed values for 2024 yet, but the increase could be 10 to 12 percent, less than last year’s rise. 

Taxes are based on net assessed value, which is the gross minus deductions. For taxes in 2023, the net assessed value of homesteads rose 21 percent, even more than the 16 percent gross rise. That’s because the $48,000 standard homestead deduction remained the same while assessed values increased. The remainder after the deduction increased even more, in percentage terms. Total net assessed value for all property—including rental housing, farmland and business property—rose 15 percent. 

Indiana’s Gateway system has already reported net assessed values for 2024. For all property, net assessments will rise 6 percent, less than half of last year’s increase. The statewide increase for homesteads is just 4 percent, way less than last year’s 21 percent. The main reason is a policy change made by the General Assembly. Legislators increased the supplemental homestead deduction from 35 percent to 40 percent of assessments after the standard deduction. It’s a seemingly small change that had a big effect.

Property tax rates are recalculated each year by each local government. The revenue to be collected is the tax levy, which is divided by assessed value to set the tax rate. Indiana places a maximum on each unit’s levy, which increases by a statewide growth rate each year. Last year the growth rate was 5 percent. This year the General Assembly limited that increase to 4 percent. 

Despite the maximum, last year the total levy increased by 9 percent. That’s because some levies are outside the maximum levy controls. Debt service to repay borrowing for big projects, and levies passed by referendum, are not under the maximum. Last year those levies increased by about 16 percent. 

This year legislators restricted some referendum levy increases to 3 percent. The total levy rise should be smaller than last year, perhaps between 5 and 6 percent.

Last year total net assessed values rose 15 percent, the levy rose 9 percent, so the average property tax rate fell by 6 percent. That’s why homestead tax bills rose less than the net assessed value rise. Tax rates for 2024 have been reported on the Department of Local Government Finance’s website, in the county budget orders. The average rate will fall slightly, by 0.4 percent.

Some homeowners have their property taxes capped by Indiana’s circuit breakers, at 1 percent of their gross assessed values. In 2023 the caps helped a little, because tax bills are based on net assessments, while the caps are based on the gross. Since the net rose more than the gross, more tax bills were limited by the caps.

That won’t happen in 2024. Because of the higher supplemental deduction, gross assessed values will rise a lot more than net assessments. Fewer homeowners will see their taxes limited by the caps. Ironically, homesteads that remain capped will see the biggest percentage increases. They’ll be charged 1 percent of gross assessed value, which will likely see double-digit percentage hikes.

What’s the guess for 2024? The average homeowner should see smaller increases in net assessed value than in 2023. Average tax rates will change little, so tax bills on middle-valued homes should rise 3 to 4 percent. Tax bills on higher valued homes will increase more. Your local tax rate changes will differ from the average, but homeowner tax bills in 2024 should rise a lot less than they did in 2023.  

Which State has the Cheapest Property Taxes?

Property taxes can make or break your budget as a homebuyer. That’s especially true if you live in one of the higher property tax states in the U.S. New Jersey, for example, has the the highest property tax rate in the nation at 2.47%, while Hawaii has the lowest at 0.29%. There are 21 states with property tax rates above the national average.

If you want to see which states have the lowest property taxes, here’s a breakdown of the 10 states with the lowest property taxes in the U.S.

Let’s take a closer look at the 10 states with the lowest property tax rates in the country. All of the data below comes from the Census Bureau’s 2022 1-year American Community Survey (ACS) Estimates.

1. Hawaii

Hawaii has the lowest property tax rate in the U.S. at 0.29%. The Aloha state has a home median value of $662,100. For a comparison with New Jersey, the state with the highest effective property tax rate in the nation at 2.47%, Hawaii’s home median value is just over twice the home median value of the Garden State ($355,700). Hawaiian homeowners pay $1,893 in median real estate taxes per year.

2. Alabama

Alabama is generally one of the more affordable states in the country. At 0.41%, it has the second-lowest property tax rate nationwide and a home median value of $157,100, which is almost $125,000 lower than the national home median value ($281,900). Homeowners in this state pay $646 annually in median real estate taxes.

3. Colorado

Colorado has the third-lowest property tax rate at 0.51%. Its home median value is $397,500, which is roughly $82,000 higher than fourth-ranked Nevada. This is the sixth-highest home median value, after Hawaii, the District of Columbia, California, Massachusetts and Washington. Homeowners in the Centennial State pay $2,017 annually in median real estate taxes.

4. Nevada

Nevada has the fourth-lowest property tax rate in the nation (0.55%). The $315,900 home median value in this state, however, is $34,000 higher than the nation’s home median value of $281,900. But homeowners in the Sagebrush state pay $1,736 in median real estate taxes annually, which is $1,133 less than the median real estate taxes paid in the U.S.

5. South Carolina

The Palmetto State has the fifth-lowest property tax rate in the nation at 0.56%. Generally an affordable state, home median value in South Carolina is $181,800, which is just over $100,000 less than the U.S. home median value. Homeowners in this state pay $1,024 annually in median real estate taxes, which is $1,845 less than what Americans pay nationwide.

6. Louisiana

The Pelican State has the sixth-lowest property tax rate in the U.S. at 0.56%. It also features the 13th-lowest home median value at $174,000. Homeowners in Louisiana pay $983 annually in median real estate taxes, which is more than $1,886 lower than the median real estate taxes paid nationwide.

7. District of Columbia

Washington D.C.’s 0.57% property tax rate is the seventh-lowest in the country. But the home median value is the second-highest in the U.S. ($635,900). Homeowners in the District of Columbia pay $3,641 annually in median real estate taxes, which is almost $800 more than what Americans pay nationwide.

8. Utah

Utah’s 0.58% property tax rate is the eighth-lowest in the country. But while property taxes are lower here than the national rate, the home median value is the 10th-highest in the U.S. ($339,700). Homeowners in the Beehive State pay $1,967 annually in median real estate taxes, which is roughly $900 less than what Americans pay nationwide.

9. Delaware

Standing at 0.58%, Delaware has the ninth-lowest property tax rate in the country. The state’s home median value is $269,700, which is just below the national home median value of $281,900. Homeowners in The First State pay $1,570 annually in median real estate taxes, which is almost $1,300 lower than median real estate taxes paid in the U.S.

10. West Virginia

West Virginia rounds out the list of 10 states with the lowest property taxes with a 0.59% rate. Home median value in the Mountain State is $128,800, which is $153,100 lower than the national home median value of $281,900. Homeowners in this state pay $756 annually in median real estate taxes, which is $2,113 less than the median real estate taxes paid in the U.S.

Bottom line

When preparing to buy a home, you must factor in how much you will pay for property taxes, which vary nationwide depending on your location. As an example, homeowners in New Jersey pay $8,797 annually, which is the highest rate in the country. This is just over three times the $2,869 median real estate taxes paid at the nationwide level. And, comparatively, Alabama homeowners pay only $646 per year, the lowest median real estate taxes in the U.S.

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