Why Your Property Tax Bill Isn't Going Down Even as Home Prices Cool

Even as home prices show signs of cooling in many U.S. markets, property tax bills often remain stubbornly high. This disconnect stems from a property tax system designed for stability, not real-time market responsiveness. Property tax assessments are based on historical data and operate on a significant delay, meaning homeowners may continue to pay taxes on a home's peak value for months or even years after its market price has dipped. Understanding this lag and knowing your options, such as filing a property tax protest, are crucial for navigating this frustrating situation.

Why Is There a Lag Between Falling Home Prices and Property Taxes?

Your property tax bill is not a direct reflection of your home's current market value. Instead, it is based on an assessed value—a data-driven estimate conducted by a local county appraisal district at a specific point in the past. This assessment is often completed months before you receive your bill.

As Celia Israel, Travis County Tax Assessor-Collector, explains, “That appraisal was done several months prior to getting their bill. As we know, markets are dynamic, and there is not a world in which cost estimates for schools and roads can be as fluid as the real estate market.” In essence, tax assessments capture a historical snapshot, not the live-market reality that a comparative market analysis (CMA) from a real estate agent would provide.

What Systemic Factors Delay Tax Relief?

Beyond the simple time lag, built-in mechanisms within property tax codes further slow the transmission of falling prices to lower bills. These include assessment cycles, caps, and phase-ins designed to prevent wild swings in tax revenue for local governments.

• Multi-Year Assessment Cycles: In some areas, like Cuyahoga County, Ohio, a full reassessment only occurs every six years. This means taxable values can remain outdated for a significant period.
• Annual Increase Caps: Many states have laws that limit how much a property's assessed value can increase each year, regardless of actual market appreciation. As Jacob Naig, a Des Moines-based real estate expert, notes, “In Iowa, property value assessments generally can tick upward by no more than 4% annually, so even when values fall, taxable values may only inch downward.” These caps protect homeowners from sudden spikes but can also delay decreases.

The following table illustrates how these factors can create a gap between market value and assessed value over time:

What Can Homeowners Do to Address High Property Tax Bills?

Despite systemic delays, homeowners are not powerless. The most direct action is to protest your property valuation. This involves challenging the appraisal district's assessed value with evidence.

“Homeowners should encourage their clients to take a close look at their Notice of Appraised Value and be familiar with the appraisal and protest process,” advises Israel. An effective protest can include:

• Recent appraisals conducted for refinancing.
• Sales data for comparable homes (comps) in your neighborhood that sold for less.
• Evidence of property damage or issues that detract from the value.

Based on our experience assessment, the success of an appeal often depends on the quality of the data presented. Many counties offer online tools to research comparable property sales, which can be used as evidence.

How Does This Disconnect Impact Different Homeowners?

The financial strain is not evenly distributed. The delay between falling values and tax relief can be especially challenging for:

• Fixed-Income Retirees: As Brittany Ping, a property management director, states, “It’s this sentiment that really impacts our aging population. They're on fixed incomes, and large assessments can make their forever home unaffordable.”
• Long-Term Owners: Households that saw dramatic value increases during the pandemic may now face high bills without the corresponding income or capital gains to absorb them. Naig shares, “I have had families postpone holidays or tap their emergency funds because of a surprise tax increase, even as the value of their homes deteriorated.”

Staying informed is your best defense. Know your local assessment cycle, track your property’s estimated market value, and carefully review every tax notice. When the numbers don’t add up, filing a protest is a practical step to ensure you are taxed fairly. While legislative reforms are being debated, proactive engagement with the existing system remains the most immediate path to potential relief.