IPTI | Property Tax in the News – June 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

Florida: Proposal to eliminate property taxes presents both opportunity and risk

A select committee of the Florida House of Representatives is evaluating a bold proposal that could dramatically transform the state’s fiscal foundation and housing market: the potential elimination of property taxes. If the measure advances, it may appear on the 2026 ballot as a constitutional amendment with far-reaching consequences for homeownership, public services, and Florida’s broader economy.

At first glance, the proposal is appealing. Lawmakers are reportedly considering several sweeping changes, including a $500,000 homestead exemption (and up to $1 million for senior residents), authorizing the Legislature to raise exemptions by statute, and capping property assessment increases at 15% over three years for both homestead and non-homestead properties. Eliminating property taxes altogether, however, would represent the ultimate reach.

As with any sweeping reform, the deeper implications warrant scrutiny.

Property taxes are a cornerstone of Florida’s public finance system. According to the Florida Policy Institute, they generate approximately 18% of county revenues, 17% of municipal revenues, and up to 60% of funding for public schools. Real estate, including land and permanent structures, comprises 94% of the state’s taxable base. Unlike more volatile revenue sources such as sales taxes, property taxes provide steady, predictable funding for essential services like education, emergency response, infrastructure, and community development, which underpin quality of life and economic resilience.

Eliminating this estimated $55 billion in annual revenue raises a fundamental question: what would take its place?

Reliance on increased sales taxes?

A leading alternative under discussion is a significant increase in the state sales tax. The Florida Policy Institute estimates that the current 6% rate may need to double to 12% to make up the difference, potentially making Florida’s sales tax the highest in the nation.

While shifting the burden may seem straightforward, the impact would be regressive. Sales taxes disproportionately affect low- and middle-income households and are more susceptible to economic downturns, threatening the stability of funding for vital services. Moreover, Florida’s constitution restricts local governments’ ability to independently raise revenue, often requiring supermajority approval and thereby further limiting flexibility.

Proponents argue that an increased reliance on sales taxes would shift more of the tax burden to visitors. While that theory has surface appeal in a tourism-driven economy, the elasticity of demand remains uncertain. Higher costs may prompt tourists to shorten their stay, spend less, or consider alternate destinations, all of which would undercut the very revenues intended to replace property taxes.

From a real estate standpoint, the potential upside is clear. Eliminating property taxes could significantly lower the long-term cost of homeownership, especially for buyers relocating from high- tax states. Florida’s appeal could intensify, and sellers may benefit from increased demand and higher property values. For renters, however, it is unlikely that tax savings for landlords would be passed on, so they may face increased costs for goods and services from the higher sales tax, representing regressive effects on affordability.

These incentives emerge against a backdrop of rapid housing appreciation. Florida home prices have increased 64% over the past five years, while property taxes rose nearly 48%, according to U.S. News & World Report, citing data from Redfin and CoreLogic. Value gains, however, are now trimming.

Questions about governance

Beyond economics, the proposal raises important questions about governance. Property taxes are currently set at the local level, not by the state. While the Florida governor and legislature champion federalism (decentralizing national decision-making to provide more empowerment at the state level) and freedom from overarching Washington mandates, there appears to be little reluctance to override municipal decisions to consolidate power in Tallahassee. If the state becomes the primary collector of tax revenue, is it not reasonable that it would then dictate how and where those funds are spent, regardless of local priorities or historical precedent? Would counties be put in a position of competing for funds, with winners and losers determined by which local representatives have curried favor with the current state administration?

Florida is already considered one of the most tax-friendly states in the country. Eliminating property taxes could further enhance its attractiveness to domestic and international buyers, particularly retirees and second-home investors seeking lower carrying costs. Still, policies of such magnitude must be approached with caution. Real estate markets do not operate in a vacuum. The very qualities that make Florida appealing, such as strong schools, safe neighborhoods, and sound infrastructure, depend on stable, locally controlled funding. Without a viable, equitable replacement for property tax revenue, these community cornerstones could be at risk.

For Florida’s real estate industry, the proposal presents both opportunity and risk. Lower costs of ownership could energize the market, but only if the livability and services that support long-term value remain intact.

Ultimately, Florida’s future should be guided not by bold experiments but by smart, deliberate reform. Policymakers must balance innovation with fiscal responsibility and respect for all levels of government, ensuring any changes strengthen, rather than jeopardize, the state’s promise as a place to live, work, and invest.

Ohio: Abolishing property tax because the legislature distorted the system is a step too far

People on both sides of the debate over property tax repeal agree on one thing: Counties, cities, towns and villages, schools and libraries should not have to depend so heavily on property taxes. But only one side is talking about the root cause of the problem: decades of state-level tax policy designed to benefit the wealthiest households and biggest corporations.

Since 2005, the state legislature has prioritized cutting the personal income tax above all other policy initiatives. These tax cuts have left the state with an annual revenue shortfall of almost $13 billion. This loss of revenue has gutted the state budget, leaving too little funding for public services Ohioans rely on, including public education, for which adequate funding is constitutionally required.

With a state legislature bent on pleasing their biggest donors with year after year of tax cuts, local governments – those closest to the issues that matter to most Ohioans – are left to fend for themselves, with property taxes as one of their only tools.

Until state legislators stand up for regular Ohioans by facing down the wealthy and powerful, the rest of us will be forced to choose between increasing property taxes and harming our communities. There are three actions the state can take to enact a tax system that balances the interests of all taxpayers while adequately funding our public services.

The state must provide adequate school funding. This can be done by adhering to the Fair School Funding Formula. The state has never met its constitutional obligation to provide adequate state support to public school in Ohio. With the Formula finally providing a pathway to meeting that obligation, both the Governor and House proposed budgets would significantly cut state aid. Less state aid means service cuts or more property tax levies.

The same can be said with state support to both the Local Government Fund and the Public Library Fund. Cuts to both the share of income tax revenue these funds receive, and the income tax itself place libraries and local government into the same difficult bind. More state assistance can help fund these services while keeping regressive taxes low.

Finally, the state needs to expand the property tax base. Class I property owners, which consist of residential or agricultural property, are overburdened.

State lawmakers have provided so many carve outs to Class II property, which is used in businesses, that local entities have to ask residents for a higher share of their income to provide their services. The biggest carve out is the elimination of the tangible personal property tax. The elimination of this tax on most property used in businesses in 2011 removed over $2 billion annual from the property tax base. Businesses need to pay their fair share to lighten the load on residents. Reverse the elimination of the tangible personal property tax.

These steps are concrete actions our state legislature must take towards creating both an adequate and equitable tax system. I understand the drive by citizens to take matters into their own hands to deliver on tax relief. We have seen our legislature fail to meet Ohioans’ needs for property tax assistance, adequately fund public schools, and a litany of other issues. But abolishing the property tax because the legislature distorted the system is a step too far.

Ohio needs a legislature that will create a tax code that balances the interests of all Ohioans, not one catering to the wealthy and corporations. A legislature that is responsive to the needs of all of us, not just the influential and connected. One that will take the work of creating an adequate and equitable tax code seriously. Until that happens, everyday Ohioans will be forced to choose between relying more on property taxes or a lower quality of life with less accessible public services.

Arizona: Scottsdale publishes ‘Truth in Taxation’ as budget adoption expected June 10

A public hearing on Scottsdale’s proposed property tax levy will occur before final budget adoption, scheduled at 5 p.m. Tuesday, June 10, 2025, at Scottsdale City Hall, 3939 N. Drinkwater Blvd, according to a press release.

Meetings are broadcast electronically through Cox Cable Channel 11 and streamed online at

ScottsdaleAZ.gov (search “live stream”).

Scottsdale plans to increase its proposed primary property tax levy $5,408,904 (excluding new construction) due to tort liability claim payments, the 2% statutory adjustment, and adjustment for the impact from the Qasimyar versus Maricopa County tax judgment, the release states.

If adopted by the City Council, the proposed primary property tax rate will increase from $0.4958 per $100 of assessed valuation to $0.5525 in Fiscal Year 2025/26, the release states.

The city’s proposed secondary property tax levy will increase $0.01 million due to the use of fund balance accumulated in fiscal year 2024-25 as a result of savings achieved through a prior year general obligation debt refinancing, and the current secondary tax rate of $0.4358 is expected to decrease by $0.0125 to $0.4233 per $100 of assessed valuation in fiscal year 2025/26, the release states.

In Fiscal Year 2025/26, citizen tax bills will reflect a proposed combined property tax rate of $0.9758, which is $0.0442 higher than the fiscal year 2024/25 combined rate of $0.9316, the release states.

Where do your property taxes go in Scottsdale?

Primary property taxes are used by the City of Scottsdale to pay for city services and operational

expenses and comprise about 10% of Scottsdale’s General Fund operating budget.

Secondary property taxes based on limited assessed property values are restricted to pay debt service on voter-approved general obligation bonds for such things as parks, libraries, streets, and police/fire stations

Of Note: The above information excludes street lighting districts, which vary by geographical location, types of lights, and City vs. HOA ownership.

In compliance with section 42-17107, Arizona Revised Statutes, the City of Scottsdale is notifying its property taxpayers of Scottsdale’s intention to raise its primary property taxes over last year’s level. Scottsdale is proposing an increase in primary property taxes of $5,408,904 or 13.64 percent.

For example, the proposed tax increase will cause Scottsdale’s primary property taxes on a $100,000 home to be $55.25 (total proposed taxes including the tax increase). Without the proposed tax increase, the total taxes that would be owed on a $100,000 home would have been $49.58.

This proposed increase is exclusive of increased primary property taxes received from new construction. The increase is also exclusive of any changes that may occur from property tax levies for voter approved bonded indebtedness or budget and tax overrides.

All interested citizens are invited to attend the public hearing on the tax increase that is scheduled to be held on Tuesday, June 10, at 5 p.m., at the City of Scottsdale City Hall Kiva, 3939 N. Drinkwater Blvd., Scottsdale, Arizona.

 

Europe

Germany: How you can challenge Germany’s controversial property tax on your home

Germany’s property tax rules underwent a major reform this year that raised taxes for many homeowners significantly. Now a number of lawsuits will test the legality of the new rules. Here’s what you need to know.

Following a major reform to Germany’s property tax rules as of the beginning of this year, millions of land- and homeowners are challenging the amount of property tax they owe.

Why were the property tax rules changed?

Germany’s old rules around property tax (Grundsteuer) had been ruled unconstitutional in 2018. The Federal Ministry of Finance explains on its website that was because the old tax code treated similar properties differently (depending on the region) and therefore violated the principle of equal treatment, which is protected by Basic Law.

The primary change to the rules that impacts homeowners is that the valuation of properties has been updated. Until the end of 2024 property valuations were based on decades old standard values

– these were established in 1964 for properties in former West German states and as far back as 1935 in former East German states.

Property valuations have now been reassessed, as of January 1st, 2022.

Additionally, a law was added that allows cities to increase the assessment rate on undeveloped plots of land. This was intended to disincentivise speculation on land that might otherwise be developed.

In simple terms, the rule reform has seen properties revalued, and for many homeowners in Germany it brought a significant increase in the property tax they owe going forward.

But many homeowners do not agree with the property tax increases, and some argue that the new assessments are unfair. Since new valuation assessments were sent out, millions of property owners have appealed.

According to a report by Focus Online, 1.4 million objections were received by the tax offices in Baden-Württemberg – meaning that nearly 30 percent of homeowners in the southwestern state feel their assessment was incorrect or unjustified.

The situation is similar in other German states as well. SWR reported 1.5 million objections in North Rhine-Westphalia, 1.3 million in Bavaria and 440,000 in Rhineland-Palatinate.

Generally, to challenge your property tax obligations in Germany you need to contest the property tax assessment, which is sent in the mail by your local tax office. This needs to be done, in writing or with a visit to the tax office, and usually within one month from receipt of the assessment.

After you’ve filed the objection, you have two months to submit a detailed justification, including any evidence you have to support your claim. If the objection is rejected, you can then file a lawsuit with the Fiscal Court within one month of receiving the rejection notice.

Regarding the new property tax rules, the homeowners’ association Haus & Grund has taken up the issue and is bringing a number of legal challenges against the new property tax.

In a post on the association’s website it lists several reference numbers for ongoing cases, and suggests that owners can refer to the ongoing lawsuits and file their own objections.

The cases, which were filed with courts in Berlin-Brandenburg, Rhineland-Palatinate, Cologne and Düsseldorf, argue that the new property tax rules violate the principle of equality of the Basic Law.

The cases will force German courts to clarify whether the new property tax rules are compatible with the law. They are expected to go all the way to the Federal Constitutional Court.

It will likely be several years before the cases are decided, but if you want to seek compensation for paying excessive property tax from now on, you should file an objection now.

Greece’s Real Estate Market Outpaces Tax Values: Islands and Athens Lead the Surge

In Greece, a striking disparity persists between government-assessed property values and actual market prices – a feature that continues to shape the country’s real estate landscape.

Known locally as “objective values”, these official figures are used for calculating property taxes, yet they often trail far behind the real prices at which properties are being bought and sold. According to recent estimates, commercial property prices across the country are, on average, 30% higher than these official valuations.

This gap is especially pronounced in high-demand areas, where tourism, investment interest, and limited supply are pushing market prices to new heights. Nowhere is this more evident than in the region of Attica, which includes Athens and its suburbs. Official figures put the total property value in Attica at €411 billion based on the most recent ENFIA tax data for 2025. However, market estimates suggest that the real commercial value exceeds €534 billion—an astonishing €123 billion difference. The divergence is most dramatic in the city center, eastern districts, and the southern coastal suburbs such as Glyfada, Voula, and Vouliagmeni, which have become hotspots for both local and international investors.

The country’s famed islands also reflect this growing imbalance. In the South Aegean – home to globally recognized destinations like Mykonos, Santorini, Paros, and Rhodes – the total official property value is €25.8 billion. Yet the commercial value is estimated at more than €33.5 billion, revealing a gap of nearly €7.7 billion. These islands, with their luxury appeal and limited land availability, are seeing a surge in demand from high-net-worth individuals and tourism-linked investors, further inflating prices well beyond what the state registers.

Crete presents a similar story. The island’s official property value is €42.2 billion, while the commercial estimate reaches nearly €55 billion. Areas around Chania, Rethymno, and Heraklion are attracting particular interest from European buyers seeking vacation homes or investment properties, driving up prices at a rapid pace.

Northern Greece is not immune to the trend. In Thessaloniki and the broader Central Macedonia region, the difference between objective and commercial values is also significant. Official estimates place the total property value at €101.9 billion, yet market assessments put it at over €132 billion—a

€30 billion gap that reveals the slow pace of official reassessments in the face of the region’s

growing economic and urban development.

In contrast, more remote or economically stable regions such as Central Greece, Epirus, and Western Macedonia show much smaller discrepancies. For instance, in Central Greece, the official property value stands at €22.8 billion, while the market value is estimated at just under €30 billion.

UK: Business rates to make ‘ghost towns’ of UK high streets

Some of the country’s biggest retailers have written to the chancellor, Rachel Reeves, warning that the government’s plans to overhaul business rates risk turning UK high streets into “ghost towns”.

The Retail Jobs Alliance, which represents Tesco, Sainsbury’s, Kingfisher, Morrisons, Asda, Primark and M&S, says thousands of jobs could be lost as a result. The changes could “accelerate the decline of high streets, reducing footfall and creating a cycle of economic downturn,” says the letter, which is also signed by Usdaw, the Labour-affiliated shop workers’ union, and the business partnership High Streets UK.

The Treasury plans to raise business rates on bigger stores from 2026 to pay for a tax cut for small stores. The fear is that this will make certain stores less profitable so they will have to consider closing down. The letter urges the chancellor to remove shops from the proposed higher level of rates and create a “fairer approach that supports, rather than penalises, physical retailers”. The proposed changes could also “negatively impact the jobs market”, it warns. Analysis by the Retail Jobs Alliance suggested that 300,000 people could leave the sector by 2028.

Without a strong retail presence “high streets risk becoming ghost towns, leading to declining property values, reduced public safety and a loss of community cohesion,” the letter adds. “[High] streets in lower-income areas would be hardest hit.”

In Redcar, a community for example, where nearly one in four people are economically inactive and, retail accounts for 13 per cent% of employment. This leaves it more exposed than other areas to a potential loss of retail jobs. “The retail sector is the lifeblood of many local communities, providing not only employment opportunities but also a sense of identity, security and economic stability in villages, towns and cities nationwide,” the letter says.

There are over 3m jobs directly linked to the retail industry, and stores act as an “anchor” for other high street businesses including cafes, hair salons and nail bars.

The letter has been copied to Labour MPs in seats where retail makes up a significant proportion of local employment. These are predominantly marginal seats where Reform UK came second in the 2024 general election, such as Blaydon and Consett, where 18% of people are employed in retail.

A Treasury spokesman said: “We are a pro-business government that is creating a fairer business rates system to protect the high street, support investment, and level the playing field. Our reform to the … system will introduce new, permanently lower business rates in 2026.”

UK: Retail giants ‘face £600m bill’ as new business rates bite

Britain’s biggest supermarkets and shops in London’s West End are expected to be hit hardest by a £600 million surge in property taxes next year.

Government reforms of business rates, due to take effect next April, will disproportionately hit larger stores with a valuation above £500,000, according to analysis by Colliers, the property agents.

The reforms, which are intended to save the high street, will lower the business rates multiplier for smaller retail, hospitality and leisure properties from next year — but will fund the cut by increasing the multiplier on larger commercial properties across all sectors.

John Webber, head of business rates at Colliers, said the new policy was “nuts” and “piles pressure on the very businesses we need to revitalise the high street”. He added: “At a time when our high street is suffering with the cutting of reliefs for the small stores and the bigger stores are seeing the hike in employment costs with the increase in employer national insurance contributions and the national minimum wage, why does the government think it is sensible to hit the bigger retail, hospitality and leisure players – the ones that provide anchor tenants for the high street, attract footfall and create the jobs – by imposing even more punitive business rates taxes?”

Colliers estimates that across the UK, the largest retail shops will together see their tax liabilities jump by at least £600 million in 2026. This comes on top of an existing £11 billion business rates bill for the sector in 2025 and recent additional costs such as the national insurance increases.

The West End of London is set to be the hardest hit by the changes. New figures show that 335 retail properties in the West End, which includes Knightsbridge, are likely to exceed the £500,000 rateable value (RV) threshold from April next year.

Colliers estimates that rateable values in the area will rise around 30 per cent following the revaluation. With the higher multiplier expected to be around 55p in the pound, annual liabilities for these properties are projected to jump from £212 million to £274 million. That equates to an average increase of £182,727 per property.

A rateable value (RV) is a valuation of a non-domestic property, primarily used to determine the amount of business rates payable.

Supermarkets are also in the firing line. Colliers calculates that more than 90 per cent of the store portfolios of Tesco, Asda and Sainsbury’s have RVs above the £500,000 threshold. The company expects the grocery sector alone to be hit with more than £350 million in additional costs annually, with suppliers such as food manufacturers, bakeries and dairies also facing steeper bills.

Although smaller stores will benefit from the lower multiplier, Webber argued that the net effect may still be damaging. “Even the smaller retail, hospitality and leisure businesses may find this a hollow victory,” he said. “Reliefs have already been slashed and steep RV rises could offset any gains.”

A Treasury spokesman said: “We are a pro-business government that is creating a fairer business rates system to protect the high street, support investment and level the playing field.

 

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