IPTI | Property Tax in the News – April 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

These 4 States Might Eliminate Property Taxes
Property taxes are the greatest contributor to revenue for local governments, providing essential funds for things like schools, roads, and fire prevention. But they’re also a huge pain.

For one, they’re complicated to calculate, relying on imperfect property assessments and confusing metrics like mill levies, or “mills,” which represent one dollar of every $1,000 in assessed property value. Worst of all, property taxes have put undue strain on many household budgets, skyrocketing alongside the record home appreciation of the past five years.

Many states have had enough and are proposing to eliminate property taxes despite their essential function for many local governments. Here’s a closer look at each of these states’ proposed plans to axe the property tax.

Florida
After Florida Gov. Ron DeSantis (R) took to X (formerly Twitter) to vocalize his support for eliminating property taxes in the Sunshine State, State Sen. Jonathan Martin (R-Fort Myers, FL) introduced Senate Bill 852, the first step toward doing so.

While the bill itself won’t take direct action on tax codes, it directs the Office of Economic and Demographic Research to create a plan for eliminating property taxes. The study will evaluate alternative revenue through state budget cuts, increased sales taxes, and locally approved consumption taxes, helping to provide a blueprint for a future proposal.

But Gov. DeSantis notes that for statewide property tax relief, Florida voters will need to pass a ballot resolution with a majority of 60% or greater.

Illinois
Illinois residents pay the second highest property taxes in the nation, according to a recent analysis, and State Sen. Neil Anderson (R-Andalusia, IL) wants to do something about it.

Sen. Anderson introduced SB 1862, co-sponsored by Sen. Dave Syverson (R-Cherry Valley), to create a homestead exemption. This exemption would eliminate property taxes for homeowners who’ve paid their share on their residences continuously for at least 30 years.

While longtime homeowners cheered the proposal, some who have been in their home for a shorter period expressed anger. But Sen. Anderson told The Center Square, this is just the beginning:

“If we can start somewhere and just get some kind of agreement that at some point, whether it’s 10 years, 20 years, 30 years, 50 years … you’ve paid enough money and you actually own your property and you don’t have to pay anything anymore, that’s the starting point I want to get to here.”

Kansas
Kansas Rep. Blake Carpenter (R-District 81) introduced an innovative proposal via House Concurrent
Resolution 5014.

Rep. Carpenter’s approach would eliminate certain sales tax exemptions, generating approximately $2 billion annually. That money would then flow into a newly established “Freedom From Taxes Fund,” where it would eventually generate enough interest to coverthe state’s education funding— which is currently supported by property taxes.

This strategy is inspired by Norway’s sovereign wealth fund, which leverages accumulated revenues for public benefit. Rep. Carpenter estimates the Kansas fund could reach $13 to $15 billion within eight years, at which point the annual interest alone would replace roughly $900 million currently raised through property taxes.

There’s even promise that the fund could one day offset income taxes in the state.

Pennsylvania
Pennsylvania Rep. Russ Diamond (R-LD 102) introduced House Bill 900 with a clear goal: enabling true homeownership without homeowners feeling like tenants of the government.

“I want people to own their homes and not have to rent from the government, all across Pennsylvania,” he told Fox News.

Rep. Diamond did not immediately have a plan to offset the loss of revenue from eliminating property taxes, quipping on his substack that “folks get all twisted into knots over how we’re going to pay for the things those taxes currently pay for – frankly, they’re missing the point.”

To offset lost revenue, State Sen. Doug Mastriano (R-District 33) proposed taxing remittances sent internationally (e.g., Western Union transfers) and imposing new taxes on endowments held by Pennsylvania’s wealthiest universities.

The future of property taxes
Proposals to eliminate property taxes in these states – and similar proposals in places like Montana to reduce taxes on primary homeowners – show how this movement is gaining momentum. The greatest challenge to these laws, however, is twofold.

Firstly, statewide action risks infringing on local governments, which are responsible for creating their own formulas for levying property taxes. A solution that works for one city is unlikely to work for more rural areas in the state, possibly creating insurmountable revenue shortfalls.

Likewise, any efforts to offset the taxes on wealthier homeowners (like owners of second homes) face significant headwinds at the polls. Overwhelmingly, these are the people who show up to vote.

New York: Commercial properties drive New York real estate tax revenue to record high
Office and other commercial buildings in New York have led the city’s 2024 real estate tax revenue to a record high even as these property types are still seeking a full recovery from the pandemic. And with the office sector playing a critical part in New York’s financial health, a separate survey gave some hope that the return-to-office rate, which industry professionals have said is key to spurring office demand, may tick up.

Real estate taxes in the city totaled about $37 billion last year, representing 49% of New York’s locally gathered revenue, a study released Monday by trade group the Real Estate Board of New York found.

These tax revenues are expected to reach $40 billion this year, or about half of the city’s receipts from local sources, REBNY said, adding that the real estate industry has contributed a total of $429 billion, or an annual average of 51%, to the city’s tax revenue since 2010. REBNY’s study was based on data from the New York City Department of Finance, city comptroller’s office and the state Department of Labor, a REBNY spokesperson told CoStar News.

Even though the pandemic has upended the office market, the class of commercial properties that also includes retail, hotels and manufacturing remains the largest contributor to real estate-related tax revenue, REBNY said. A separate class involving multifamily housing with properties of more than three units also is a key contributor. These two groups of properties have accounted for 76% of the city’s property tax revenue from 2019 to 2024, according to the study.

New York’s office market value has exceeded its pre-pandemic level even as the vacancy rate sits at what CoStar data shows as a near-record high, according to a study last year by New York State Comptroller Thomas DiNapoli’s office. Growth in office market value was shown to be driven not by traditional midtown Manhattan clusters such as Midtown East, Grand Central and Times Square, but by the Hudson Yards megadevelopment on the far west side.

One in four employers in the city plans to increase office attendance requirements in the next 12 months, the Partnership for New York City, a high-profile nonprofit group whose members include major corporate giants, said Monday after polling more than 125 major Manhattan office employers in March. That suggests “office attendance should continue to increase” even as the remaining 75% of employers said their current workplace attendance policy is their “new normal,” the group said.

Fifty-seven percent of Manhattan office workers are at their workplace on an average weekday, up from 56% in May, according to the partnership. That translates to 76% of pre-pandemic attendance, up from 72% in May.

Some 36% of employees are back in the office four or five days, up from 28% in May, the partnership said. Three days in the office remains the most popular, with 30% of office workers doing that. Thirtythree percent of the city’s office employees remain fully remote or in the office just one or two days, the same percentage as May’s level.

Other studies have also showcased the return-to-office rate isn’t likely to see any sizable jumps, even though major corporate giants such as Amazon and JPMorgan Chase have called employees back to the office five days a week.

Among firms with more than 5,000 employees, 46% of employees are currently in the office on an average weekday, compared to 67% of employees among companies with fewer than 500 employees, the partnership’s study found.

EUROPE
Croatia: Property tax rates rise across Croatia: new rates for 2025
A total of 215 municipalities and cities across Croatia have increased property tax rates, 284 have kept them the same, while 57 have reduced them, the Ministry of Finance reported on Thursday.

According to data published on the Tax Administration’s website, this year 119 municipalities and cities are applying the minimum rate of 60 cents per square metre, while the highest tax burden, ranging from five to eight euros, has been set by 73 municipalities and cities.

The Tax Administration’s tables show that the maximum possible property tax rate for 2025, set at eight euros per square metre, has been adopted by Umag, Vis, Sveti Filip i Jakov, Fažana, and Baška Voda. Bol follows with a rate of 7.5 euros, while Motovun has set it at seven euros. Among the largest cities, Zagreb has introduced a rate of five euros per square metre, Split 1.99 euros, Rijeka five euros, and Osijek 0.6 euros.

The property tax was introduced on 1 January this year as a replacement for the holiday home tax. It is paid annually at a rate ranging from 0.6 to eight euros per square metre of the property’s usable area. The amount of tax is determined by the local government unit (municipality or city) where the property is located.

Under amendments to the Local Tax Act, which came into effect on 1 January 2025, local government units were required to make decisions on local taxes by 28 February this year. The tax amount depends on the property’s location and may be increased based on other factors affecting its value, such as the property’s age or the presence of certain amenities. However, in such cases, it cannot exceed eight euros per square metre.

The upper limit for property tax has been raised to eight euros per square metre, compared to the 2024 holiday home tax, which was capped at five euros per square metre.

Property tax revenue is shared between the municipality or city and the county where the property is located, with 80% allocated to the municipality or city and 20% to the county.

Italy: Small Italian towns scrap property tax to lure new residents – plus €500 to move in
Local authorities offer incentives to draw people back to emptied-out towns and villages in Italy – and to fix up their homes

While council tax is rising in many parts of England, small depopulating towns and villages in Italy are scrapping it to lure new residents.

In the rural village of Offida, in the central region of Marche, local authorities have granted exemptions to paying property tax since 2018. New residents can get the exemption with automatic renewals.

“A few years ago our population was above 5,000 people, now we’re down to barely 4,700 residents but the zero property tax is starting to slowly bring in new people,” Emanuela Stipa of Offida’s municipality tax office told The i Paper.

“We’re also giving a one-off €500 bonus to new residents and families who land here, which is another major lure in attracting new people.”

The only requirement to be exempted from paying the local property tax, which includes waste disposal and other community services, is to declare a maximum annual income of €44,000 (£36,800) per person or per family. “Once registered as resident, the exemption is granted for 10 years without the need to apply for it every 12 months, and this is very positive”, said Stipa.

Serena Antonelli, from the town’s culture office, says the move has lately drawn in a dozen foreigners who have taken up residency, mostly Germans. Property taxes in Italy are calculated on the size of the property owned and the number of people living in it, and vary across the country with the lowest ones being in remote, non-touristy areas.

In Offida, located midway between the pristine Adriatic coast and the Apennine hills, a home of 150 square meters where four people live comes with a property tax of up to €300 per year. If the property 400 square meters, and there are just two people living inside it, the property tax would be worth roughly €500, but the new residents won’t pay it. “Multiply that for 10 years and you get to spare some €5,000 as a couple just on property tax,” says Stipa.

Offida, which is part of the club uniting Italy’s Most Beautiful Towns, has other perks, too. Property prices are as low as €50,000 for a 60-square-meter duplex, while rentals just €350 for a same-size apartment in the village center. “The food is also great: we have traditional chi chí, a flatbread stuffed with tuna, capsicum peppers, capers and anchovies, and taccú tagliolini pasta with tuna sauce,” says Antonelli.

In the region of Puglia, the “blue town” of Casamassima has also scrapped property tax for residents living in the old district who opt to spruce up the exterior façades of their property, giving them a fresh layer of blue paint. Property tax there is an average of €500 per year for a two-bedroom home for two people. According to the local culture office, the walls of the dwellings were first painted blue back in the 1500s as a tribute to the Virgin Mary for having spared the town from a terrible plague. Casamassima has a population of 19,000 residents, but locals have been abandoning its ancient neighbourhood, which needs revitalisation.

In the deep region of Basilicata, the village of Latronico, where barely 4,000 people live, has taken it one step further. Authorities here have exempted buyers of old shepherd or farmer dwellings from paying property tax for five years. If they also restyle it with a basic makeover, the exemption will be extended for 10 years.

“That amounts to saving roughly some €2,000-€3,000 total per year and, in our case, you don’t necessarily have to become a resident, you can just own a holiday home and come and go as you please,” says Vincenzo Castellano, head of a local online housing platform offering cheap homes on sale and for rent.

 

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