CFED Assets & Opportunity Scorecard
Property taxes are an important revenue source for local governments, but they can be a heavy burden for low- and moderate-income families, particularly those whose housing costs have increased faster than their incomes. Even in periods when home values decline, tax burdens may continue to rise due to the way states and localities calculate property tax. States have used many strategies to reduce property tax burdens, including those that provide relief more widely to all homeowners, e.g., homestead exemptions and assessment caps. More effective, however, are programs targeted at homeowners that need relief most.
Property tax “circuit breakers” provide households with direct property tax relief that increases as household income declines. Circuit breakers kick-in when property taxes exceed a certain percentage of a household's income and provide a rebate or tax subsidy for qualifying households. Although states often use age (i.e., being elderly) or disability as a proxy for financial need, property tax circuit breakers that are available to lower-income working-age homeowners and renters better target community need.
Strength of State Policies: Property Tax Relief
|Does the state provide property tax relief via a well-targeted circuit breaker? 1|
|California||Elderly or disabled only|
|Colorado||Elderly or disabled only|
|District of Columbia||—|
|Illinois||Elderly, disabled, or
|Iowa 3||Elderly or disabled only|
|Missouri||Elderly, disabled, or veterans only|
|Montana||Homeowners or elderly only|
|Nebraska||Elderly or disabled only|
|New Hampshire||Homeowners only|
|New Jersey||Homeowners only|
|New Mexico||Elderly or homeowners only|
|North Carolina||Elderly or disabled only|
|North Dakota||Elderly or disabled only|
|Oklahoma||Elderly or disabled homeowners only|
|Pennsylvania||Elderly or disabled only|
|Rhode Island||Elderly or disabled only|
|South Dakota||Elderly or disabled only|
|Washington||Elderly or disabled only|
|West Virginia||Elderly or homeowners only|
|Wyoming||Elderly or disabled only|
Notes on the Data
1. "Significant Features of the Property Tax," Lincoln Institute of Land Policy and George Washington Institute of Public Policy. (Accessed January 8, 2016). States receive credit if they: a) offer a state-funded property tax circuit breaker and b) open program eligibility to working-age households with children, renters and homeowners. All states offering property tax circuit breakers impose income-based eligibility restrictions. The Scorecard does not take any income limits imposed by the state into account when grading this policy measure.
2. Hawaii offers a state-funded circuit breaker program, but each county applies its own qualifications. In Maui, all homeowners are eligible; in Honolulu, only elderly residents qualify. The circuit-breaker program is not in place in all counties.
3. Beginning in 1995, an Iowan who has attained the age of 23 or a head of household and was not claimed as a dependent on any other person's tax return for the base year is eligible by statutes for this program if they meet income requirements. However, the state has never provided funding for this portion of the program.
How States Are Assessed
States receive credit if they offer property tax circuit breakers, and these circuit breakers are made available to working-age households with children, renters and homeowners.
What States Have Done
Although 33 states and the District of Columbia provide some form of property tax circuit breaker, only seven states and D.C. make these circuit breakers available to working-age households with children, to renters and to homeowners.