IPTI | Property Tax in the News – October 2025

IPTI’s usual monthly newsletter – the “President’s Message” – contains, inter alia, some summarised news articles from around the world. This IPTI publication – “Property Tax in the News” – contains some of the more interesting news articles concerning property taxes in North America and Europe which is where many of our members have a particular interest. Links to these and more, similarly summarised, articles – from North America, Europe and around the globe – can be found in “IPTI Xtracts” on our website: www.ipti.org. Please note that these are news articles; they do not necessarily reflect IPTI’s views.

 

USA

USA: The Impact of Property Taxes

Americans are seeing property tax bills soar to unaffordable levels.

Do you think your property taxes are too high? Are you concerned with the lack of transparency around the process? Well, you’re not alone. Long one of the most hated taxes, Americans are seeing property tax bills soar to unaffordable levels. The property tax increases often happen silently until the bill arrives at the doorstep. Even then, homeowners and renters alike are many times totally in the dark when it comes to determining why their costs are escalating, as well as who is driving the burden of government ever higher.

Even more troubling are the deceitful proclamations from many local politicians who say they’ve held the line on our property taxes this year, all while property tax bills increase for hard-working taxpayers. How can that be? Well, property taxes have a major honesty gap problem. That problem comes from a difference between how taxes are calculated by local governments and how they’re paid by taxpayers. The problem is multiplied by the desire some local politicians have to escape the well-deserved political liabilities that come with the overspending at the local level- the spending that drives nearly all property tax burdens across the country. For most of the nation, property tax bills are determined by multiplying a local tax rate by the property’s assessed value. While that tax rate is set by the government, the property value can fluctuate depending on the market.

For example, if the local housing market tightens and a taxpayer’s home value goes up, they can be served with a much higher tax bill. Just because their home value goes up, that might not mean they have any more money to pay the tax, of course. Through all this, local government did not need to take any action because the tax increase is due to the higher property valuation signed by the government. When asked, local government officials will even say that they didn’t increase the property taxes because the rate set is not changed. At best, this half-truth, of course, ignores the fact that the local government sent out those higher bills and pocketed the windfall revenue from the assessment increases. Even worse, some big-spending local officials excel in shifting the blame to the state level and claim that state lawmakers are the cause of the property tax problems since they didn’t send local governments enough aid. However, when you look at the tax collections data, it becomes clear that nearly all property taxes across the nation are driven by local units of government.

This situation, in which many communities around the country find themselves, is obviously not serving the interests of the taxpayer. It just leads to compounding confusion and financial pain, but it is a windfall for those who would like to spend more and grow government at the local level.

Some states, recognizing these problems, have implemented a solution called Truth in Taxation, which we at ALEC endorse as model policy. This policy, pioneered decades ago by fiscally prudent states like Utah and Tennessee, is based on the principle that government exists not for the sake of collecting taxes, but to provide certain core functions to its taxpayers. To do this, Truth in Taxation requires honesty and transparency. Local taxing authorities need to calculate the tax rate that would provide them with the same amount of revenue as the previous year after assessment changes are made. The default becomes for taxes not to increase, but if they do increase, local officials must be clear about why and hold themselves accountable for such decisions.

If the local taxing authority wants to collect more money, it can do so, but it must do a few simple things: provide notice to taxpayers, hold a public hearing, and take a recorded vote of the appropriate local officials. By creating a transparent starting point each year, it ensures taxpayers and officials mean the same thing when they talk about increasing property taxes or keeping them the same. But without these reforms, property taxes have a major honesty gap problem. Bills continue to rise with property values while local governments pocket those windfall revenues, all while taxpayers are stuck in the dark.

In order to break out from this current failed system of property taxes across America, state and local leaders must fundamentally bring spending-side discipline to the equation for local governments. Make no mistake: local spending decisions determine property tax burdens. Bringing real transparency and accountability to that reality is exactly what hard-working American taxpayers deserve.

Delaware: Does Delaware intend to remain among the worst states for property taxes

After delaying for four decades or more the property-tax reassessments that many other jurisdictions handle more routinely to maintain uniformity and fairness in property taxation, Delaware’s counties have completed mass reassessments. Complaints have followed, leading to a recent special legislative session and the enactment of several laws in response.

None of the recently enacted laws addresses the fundamental reasons why this process has been so messy, or the reasons why the Council on State Taxation and International Property Tax Institute gave Delaware’s property tax system a D in their 2019 study, down from our D+ score in 2014. Before the political urgency of fixing problems with our property tax assessments passes, I have three suggestions for action to prevent recurrence of the problems.

What complaints and concerns have stood out?

Among the many complaints and concerns expressed in the special session and other venues, three things stood out:

1. There were a few glaring errors, and many appeals of actual or perceived overassessments are backlogged. Conspicuous errors in a few cases can distract us from the bigger picture. Errors are inevitable when we wait four decades to update values and then have to reappraise all of each county’s parcels at once. The scope of the task, and its extreme infrequency, required counties to delegate it to an out-of-state vendor with limited local knowledge. Additionally, inaccurate reporting of many transaction values, permitted by legal loopholes distinctive to Delaware, undermines the comparable-sales method used to estimate market values for residential properties.

2. Some property owners experienced “sticker shock” when four decades of accumulated disparities were adjusted all at once. This is not because reassessment in and of itself increases tax revenues. Over four decades, some properties and neighborhoods, including mine and my neighbors’, gained more value than others. But our assessed values did not change to keep pace. We got used to paying less than our fair share of school, county, and municipal taxes. The owners of less rapidly appreciating properties subsidized us by paying more than their fair share. Presented with four decades of corrections virtually overnight, some have been vocally unhappy. I’m not thrilled by the 61% increase in my own school tax bill, but it simply means I’m now paying a fairer share, not that I’m a victim of malice or incompetence.

3. Some residents and legislators expressed concern that the sudden end of that longstanding disparity could be a hardship for income-constrained owners of previously underassessed homes. This is less likely to drive people from their homes in Delaware than it might be in nearby states where effective tax rates are often two or three times as great as ours, but it might create challenges for Delawareans whose property values have grown much more than their incomes since the 1980s.

There are three things the Delaware General Assembly could do right now, while we are all alert to the concerns and there is some political momentum, to address the current complaints, prevent recurrent political panics in the future, and move us off the list of the world’s worst places for property tax administration:

1. Mandate a three-year rolling reassessment cycle, as Maryland does. By requiring the counties (or the state, for that matter) to reassess a third of parcels every year, we can make the process less error prone, less disruptive, and more equitable. This would also even out the workload of managing the process so that the state, the counties, or even an interlocal compact among the counties could do rather than contracting with outside firms. This could reduce error rates through local knowledge and a more orderly workflow and prevent the shock of having decades’ worth of adjustments

happen overnight. Previous General Assemblies paid for expert reports from which mapped out precisely such an approach and were endorsed by the League of Women Voters of Delaware in 2010 although their recommendations were ignored.

2. Adopt a means-tested “circuit breaker” provision to replace the state’s current status-tested property tax subsidies. Rather than continuing to give generous subsidies to all 65+ homeowners regardless of need, we can target tax relief to those who really need it. The Lincoln Institute of Land Policy report Property tax circuit breakers: Fair and cost-effective relief for taxpayers is a good resource for learning more.

3. Promote better, more transparent reporting of actual fair market values by eliminating some of all of the current loopholes that allow buyers and sellers to conceal the actual prices paid in real property transactions. Inaccurate reporting prevents assessors from accessing enough valid market pricing information to establish accurate values using the comparable-sales method.

In this past summer’s special session, our state government adopted several well-intended short- term fixes. They have an opportunity during the upcoming regular session to adopt long-term solutions for a fair and efficient property tax system for generations to come. I hope they will do so while we have enough political energy and attention on the problem to support real change.

 

EUROPE

Europe’s property tax lottery

Europe’s property market isn’t just shaped by prices and supply – taxes play a quiet but powerful role. From regions with no transfer tax at all to places where buyers can face bills of €30,000 (A$49,000) or more on a €300,000 (A$490,000) home, the cost of closing a deal varies dramatically. For agents, these differences can shift demand, alter buyer budgets and influence how transactions unfold across borders.
Property buyers across Europe are grappling with wildly different tax bills depending on where they purchase, with some facing tens of thousands of euros in charges while others pay nothing at all.
An analysis by the Financial Times shows that transaction levies, known as property transfer taxes, can add €30,000 (about A$49,000) or more to the cost of a €300,000 (A$490,000) home in parts of Spain and Belgium, while in Zurich, buyers pay no transfer tax at all under a 2005 cantonal law designed to boost property sales.
This so-called “tax roulette” underscores how government policy shapes one of life’s biggest
financial decisions.

In Spain, the country’s 17 regions set their own rates.

Catalonia and Valencia impose flat levies of 10 per cent — meaning €30,000 (A$49,000) on a
€300,000 (A$490,000) property, among the highest in Europe.

Alícia Romero, Catalonia’s top economic official, said the tax has not slowed the region’s market, anchored by Barcelona, but added, “The more you have or the more you earn, the more you pay.”
The Catalan government has extended a reduced 5 per cent rate to buyers up to age 35 and women who have experienced gender violence, while raising marginal rates for luxury purchases above
€600,000 (A$980,000).

Belgium also ranks among the most expensive. Its standard “registration fee” is 12 per cent, that’s €36,000 (A$59,000) on a €300,000 (A$490,000) home, although Flanders cut the rate to 2 per cent for sole residences in 2022 and Brussels now exempts the first €200,000 (A$326,000) of a property’s value for eligible buyers. The UK sits at the other extreme with a progressive “stamp duty” system. First-time buyers pay nothing on homes up to £300,000 (about A$580,000), but anyone buying an additional property pays a 5 per cent surcharge on top of standard rates, taking the top marginal charge to 17 per cent above £1.5 million (about A$2.9 million).

The policy recently made headlines when Deputy Prime Minister Angela Rayner resigned after admitting she failed to pay the surcharge on a second property. Critics say the tax discourages people from moving. Richard Donnell, executive director at Zoopla, said: “Is it about raising cash or is it about helping a functioning housing market? I think in the UK our taxes around property are just about raising money and a bit clunky.” Elsewhere, France keeps transfer taxes moderate but recently allowed local departments to add 0.5 percentage points to shore up public finances. French buyers face another hit: hefty real estate agent fees that can reach 8 per cent, compared with around 3 per cent in Germany and Italy and almost none in Spain or the UK.
With housing affordability under pressure across Europe, some governments are targeting relief for young or first-time buyers.

Bulgaria: Updating the tax assessment of Bulgarian real estate – opportunities and risks

The International Monetary Fund (IMF), the World Bank, and the Council of Europe recommend updating the tax assessment of real estate in Bulgaria. The main reason is the significant discrepancy between current tax assessments (last updated in 2007) and current market values. This discrepancy leads to undervalued property values for tax purposes.
The main reason is that tax assessments are several times lower than market values. Another factor is the need for additional resources for municipal budgets, caused by rising costs, inflation, and the need for capital expenditures.
In 2023, a legislative proposal was submitted, which was not approved at second reading, to index the base tax assessment using the NSI indices for housing prices. The proposed update applies to cases where the total change exceeds 10% over a two-year period.

The current formula in Bulgaria for determining the tax assessment is based on a base tax value per square meter and a number of adjustment coefficients (location, infrastructure, obsolescence, etc.). The potential update will mainly affect the base tax value.

What does European experience show?

Updating the tax base for real estate is common practice in European Union member states. In recent years, Ireland and Denmark have introduced periodic updates to the tax base. Croatia has also taken steps toward reforming real estate taxes. The reforms have had a number of positive effects: an increase in municipal revenues in a transparent manner based on publicly accessible registers; automatic stabilization of the real estate market due to fair property values; improved access to housing for the population, especially in periods of transition (e.g., joining the eurozone), and efficient use of resources, leading to economic stability and sustainability of urban budgets.
Opportunities and risks for Bulgaria

In Bulgaria, the tax base was regularly updated until 2007, but following changes in the regulatory framework, this practice was discontinued. The update will lead to an increase in municipal revenues from property tax and transaction tax (on property acquisition), as it will limit the choice of tax assessment as a basis for transactions. Increasing municipalities’ own revenues is a factor that leads to greater fiscal autonomy, discipline, and better resource management. Updating the tax base can also serve as a tool to cool the real estate market and limit mortgage financing. The risks associated with updating are related to social intolerance – an increase in liabilities to the municipal budget, which could lead to public disapproval. As a tool for neutralizing social risk, it is recommended to reduce the amount/rate of the real estate tax. This will balance costs and achieve a smooth increase in the tax burden in line with citizens’ ability to pay. The main benefits of such a reform are to provide additional revenue to cover growing current and maintenance costs, as well as to provide a potential buffer for capital expenditures. It is also possible to identify a positive impact and a reduction in the overall deficits that many municipalities in Bulgaria have generated in recent years.

UK: Business rates: a declining grade

When I last wrote for Estates Gazette in March, I gave the government a D grade for its disappointing progress on business rates reform. Sadly, things don’t seem to have improved. The recently published interim report on the Transforming Business Rates consultation, rather than giving a blueprint for reform, merely tinkers around the edges.

With the Autumn Budget looming and a new revaluation in 2026, business rates seem set to rise further. Any promises to “reform business rates” or “save the high street” increasingly look like illusions. The government sadly seems more focused on sustaining its high-spend, high-tax agenda than listening to business concerns.

Misguided multipliers

The Non-Domestic Rating (Multipliers and Private Schools) Act 2025 received royal assent earlier this year, paving the way for the government to introduce its complicated new system of five business rates multipliers that will come into force in April 2026. The government has categorised properties as follows: rateable value below £51,000 (retail, hospitality and leisure), RV below £51,000 (non-RHL), RV between £51,000 and £499,999 (RHL), RV between £51,000 and £499,999 (non-RHL) and RV over £500,000 (all properties).

While specific multiplier levels will be confirmed in the Autumn Budget, we know that smaller RHL properties will benefit from lower multiplier levels in an attempt to compensate them from the loss of their RHL reliefs, which in 2026 will be reduced to zero. However, this reduction will be funded by increasing the multiplier for larger properties – those with RVs above £500,000 – across all sectors. This move, the government claims, is aimed at helping high-street businesses by shifting the burden onto larger operators and online giants. But the policy is flawed. Large stores and supermarkets, including those in the high street they are trying to save and often the anchor tenants that drive footfall, will be penalised, potentially damaging high-street ecosystems further.

Colliers estimates that larger food stores, retail warehouses and other big commercial properties will see over £400m in annual increases on their rates bills. Supermarkets will be disproportionately impacted: about 90% of Tesco, Asda and Sainsbury’s stores have RVs above £500,000. Their suppliers – manufacturers, factories and warehouses – will also face millions in added costs. In the West End of London alone, our research shows 451 RHL properties are expected to face the higher multiplier. Even in smaller cities, these larger venues are often the key attractions that sustain local economies. No wonder so many big names in the retail and leisure sectors have been raising their voices in alarm.

Rising values, rising liabilities

The new rating list will come into effect on 1 April 2026, based on rental values from 1 April 2024 – after Covid disruptions had subsided. In contrast, the current 2023 list reflects April 2021, a period still deeply affected by the pandemic.

Retail rents have since rebounded. We anticipate 20-25% increases in RVs across the retail sector, with London’s West End potentially seeing 30% rises. For the 335 retail properties in this area expected to exceed the £500,000 RV threshold, liabilities could jump from £212m to £274m annually – an average increase of £182,727 per property.

The office sector will also be hit. Prime London office rents have recovered post-Covid, and our analysis of 27 boroughs suggests business rates for prime office space will increase by £432m, a 9% average rise, bringing the total to £5.23bn annually. The government has now promised a transitional relief package to ease these sharp increases – but this is only necessary because rates are rising so steeply in the first place, and are still going in the wrong direction.
Overstretched and underperforming appeals system

We are concerned that the “check, challenge, appeal” system remains underfunded, complex and slow. According to latest Valuation Office Agency statistics, in the 27 months since the beginning of the 2023 list (1 April 2023), 56% of the 35,910 challenges in the system were still outstanding – only nine months before the end of the three-year list, only 9,340 (26%) of challenges had been resolved so far, with another 18% declared void. Our own surveyors confirm long delays. We know that checks that should be processed within three months are routinely taking 10-12 months to clear and challenges meant to be resolved in 12 months are dragging on, far exceeding the supposed timelines.

The real test lies ahead. Many businesses have delayed submitting appeals to the 2023 list due to the complexity of the system – but that will change soon. We estimate 100,000 new checks will be lodged in the next six months before the April 2026 deadline. Our concern is that if the VOA has not been able resolve 56% of challenges 27 months on from registration, how will it cope with the expected 100,000 new businesses disputing their 2023 valuations in the next seven months? By next April, the VOA will also need to start working on the 2029 list. Under new rules, the government also plans to eliminate the “check” stage of the appeals process and reduce the time to challenge assessments for the 2029 list to a six-month window – moves that may help the VOA, but further disadvantage ratepayers. Chaos seems inevitable.

Lukewarm reform

The government’s recent interim response to its Transforming Business Rates consultation outlines
potential reforms.

The priority areas been considered are:

• “Slab to slice” reform – moving from a single multiplier paid on full rateable value, to a new structure, taxing successive bands at increasing rates.
• Enhancing small business rates relief.
• Enhancing improvement relief.
• Exploring the possible benefits of shortening the antecedent valuation date.
• The government has ruled out more frequent revaluations or amending empty property relief in the immediate future.

Disappointingly, these ideas don’t tackle the central issue: that business rates are simply too high. The report reflects more tinkering around the edges than decisive reform, with no real commitment to reduce the tax burden on businesses.

New transparency requirements

The government is pushing for ratepayers to provide information to the VOA regularly and for there to be greater transparency on valuations. The new voluntary “duty to notify” and “review and update” schemes will be rolled out from 1 April 2026, becoming mandatory by 1 April 2029. By 1 April 2029, everyone with a business or non-domestic property will have to tell the VOA of any changes to their property. This includes changes in occupancy, leasing or renting, property characteristics and usage. Information must be submitted within 60 days of any change, and ratepayers must confirm annually that all changes in the past 12 months have been reported. Some businesses will also need to submit trade information annually if it is used to value their property. While framed as improving transparency, this will increase the administrative burden significantly, especially for small and medium-sized enterprises. The risk is that confused ratepayers may fall prey to rogue surveyors promising easy solutions.

Meanwhile, the “digital business rates” system is scheduled to launch by March 2028.

Far from reducing or reforming this burdensome tax, the government is still expanding it. The result is a more complex, more expensive and more bureaucratic system that does little to support growth or revitalise the high street.
This is not what was promised in the election manifesto or in its promises since. Last time, we gave the government a D. Now, in despair, we’re downgrading to an E. Unless the government starts listening to businesses and delivers real reform, we fear the grade may soon fall to U. Let’s hope it doesn’t slip that low!

 

Compliments of the International Property Tax Institute – a member of the EACCNY