FnF News

Khadija Khan

May 21, 2025

Property Appraisals Outpace Exemptions Nationwide, Fueling Tax Hikes and Homeowner Frustration

FNF News – May 20, 2025

Across the United States, homeowners are facing mounting frustration as property tax appraisals continue to rise sharply, often outpacing local exemption rates and exceeding true fair market values (FMV). The growing disparity is leading to significantly higher tax bills and sparking calls for reform in how local governments assess property value.

In numerous states, appraisal increases have been recorded at rates of 15–30% year-over-year, despite modest changes in actual home sales or neighborhood conditions. This discrepancy has triggered widespread concerns that current property tax systems are becoming financially unsustainable and inherently unfair to average homeowners.

Homeowners Feel the Squeeze

“I’m not against paying my fair share,” said Nicole Carter, a homeowner in Travis County, Texas. “But when my home value allegedly jumps $75,000 in one year — and my homestead exemption only shields a fraction of that — something is clearly broken.”

Local jurisdictions often rely on mass appraisal techniques, which use algorithms and market trends to estimate home values. Critics argue that such methods fail to accurately reflect individual property conditions and disproportionately hurt residents in gentrifying or rapidly developing neighborhoods.

The Core Issue: Exemptions Lag Behind Inflation

One of the primary issues fueling the tax spike is the static or slow-growing nature of tax exemptions, such as:

Homestead exemptions: Provide a flat or percentage-based reduction in assessed value for primary residences.
Senior or veteran exemptions: Offer additional relief but are often capped or require yearly reapplication.

In many regions, these exemptions have not been updated to reflect modern home prices or inflation trends.

“Appraisals are rising exponentially, but most exemptions are indexed far below the rate of home value appreciation,” said Dr. Helen Marston, a policy expert at the Urban Finance Institute. “This leaves homeowners with more taxable value every year — even if they haven’t gained actual wealth or income.”

Real Market Value vs. Assessed Value

Another major point of contention is the gap between assessed value and true fair market value. Homeowners argue that appraised values do not reflect what buyers would realistically pay — particularly for older homes or those in need of repair.

“My appraisal went up 28% this year,” said James Lee, a homeowner in Florida. “But my real estate agent says I couldn’t sell for anywhere near that amount. So why am I paying taxes on a number that isn’t even real?”

This growing disconnect has led to a surge in formal protests and appeals, with local appraisal review boards inundated by residents challenging their property valuations.

Local Governments Defend the System

County assessors and tax offices defend their methods, citing legal mandates to keep valuations in line with broader market trends.

“We are required by law to appraise properties at market value,” said an official from the Harris County Appraisal District in Texas. “If we don’t, we risk penalties from the state or a loss of school funding.”

However, critics argue that market value itself has become a moving target — increasingly influenced by corporate investors, cash buyers, and remote speculators whose purchasing power drives up home prices far beyond what average residents can afford.

Push for Legislative Reform

Several states — including Texas, Florida, and Georgia — are considering legislation to cap annual appraisal increases or tie exemption growth directly to inflation.

Proposed reforms include:

Indexing exemptions to the Consumer Price Index (CPI)
Implementing caps on annual assessment growth (e.g., no more than 3–5% per year)
Creating automatic appeals for assessments that exceed sale price or neighborhood median increases

Housing advocacy groups are also calling for greater transparency in how values are calculated and independent oversight of county assessors.

The Bottom Line

As property taxes continue to rise on the backs of surging appraisals, more Americans are feeling that the system is out of step with financial reality. For many middle-class homeowners, it’s not just about paying more — it’s about the erosion of trust in a system they believe is supposed to be fair.

Until reforms are enacted, taxpayers will need to stay vigilant, file timely appeals, and keep pushing for assessment policies that reflect actual market behavior, not algorithmic projections detached from reality.

Stay with FNF News for continuing coverage on housing, taxation, and local economic policy.

#PropertyTax #RealEstate #Appraisals #HousingMarket #TaxReform #Homeownership #FNFNews #FMV #TaxPolicy #PublicFinance

May 21, 2025

Runaway Property Appraisals Trigger Tax Crisis as Exemptions Fail to Keep Pace with Skyrocketing Valuations

ByKhadija Khan

FnF News

Property Appraisals Outpace Exemptions Nationwide, Fueling Tax Hikes and Homeowner Frustration

Homeowners Feel the Squeeze

The Core Issue: Exemptions Lag Behind Inflation

Real Market Value vs. Assessed Value

Local Governments Defend the System

Push for Legislative Reform

The Bottom Line

By Khadija Khan

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