A property tax cap could help keep your property tax bill from increasing too much. That’s because these caps limit how much property taxes can increase from one period to the next. However, not all states have a property tax cap, and not all cap types are created equal. There is more than one type of property tax limit, and other factors play a role in tax bill amounts. Here’s what you need to know.
[Median property tax bills, home values, and effective tax rates are based on data provided by the US Census Bureau and presented by PropertyShark. The types of property tax limitations each state imposes are based on information from the Tax Foundation.]
Types of property tax caps
Each type of property tax cap can help prevent tax bills from spiking, but they are all very different.
- An assessment limit sets a cap for how much the assessed value of your property can increase from one period to the next. (For example, an assessment limit might not allow your home’s assessment to increase by more than 3%, even if the property’s market value increases by 20%.)
- A rate limit sets a cap for the rate at which a jurisdiction can tax your property. This limit can help keep your tax bill from increasing when there hasn’t been a change to your property’s assessment.
- A levy limit caps how much property tax revenue a government can collect. The levy limit refers to all revenue, not only the revenue from one property.
