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State and Local Property Tax Burdens in 2005

by David Baer, Public Policy Institute, May 2007

This and Related Reports

States and localities face the challenge of collecting property and other tax revenues to finance public services and programs, while not creating unduly high tax burdens that would drive away affluent residents or create excessive burdens for low-income households. Of all local government revenue sources, the one relied on most heavily is the local property tax.

This AARP Public Policy Institute Issue Paper uses data from the 2005 American Community Survey to provide estimates of residential property tax burdens for all 50 states and the District of Columbia involving three groups: all homeowners, homeowners under age 65, and homeowners age 65 and older.

It provides estimates of the overall median property tax burden for the three groups. In order to better assess the regressivity or progressivity of the property tax for each of the three groups, the paper examines how property tax burdens vary by income.

The paper finds that

  • average residential property tax burdens of homeowners age 65 and older exceeded those of younger homeowners for most of the states;
  • property taxes were generally found to be regressive; and 
  • states with the highest property tax burdens were mostly in the New England and Middle-Atlantic regions.