IPTI | Property Tax in the News – May 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

US property tax bill jumped again in 2024 as affordability squeezes buyers

Homeowners across the United States saw their average property tax bill climb again in 2024, even as overall tax collections declined slightly and effective tax rates eased, according to a new report from ATTOM. The company’s 2024 property tax analysis, which covers 85.7 million single-family homes, found that the average property tax bill rose to $4,172, a 2.7% increase from the year prior. In comparison, the average increase in 2023 was 4.1%. Total property taxes levied on single-family homes nationwide reached $357.5 billion, down 1.6% from 2023.

“While rising home values can influence property taxes, they don’t automatically lead to higher bills for homeowners,” said Rob Barber, CEO of ATTOM. “In many areas, we’ve seen taxes increase not just due to property appreciation, but also because of growing costs to operate local governments and schools or shifts in how tax burdens are distributed.”

The average effective property tax rate, the ratio of property taxes to estimated market value, dipped to 0.86% in 2024, down slightly from 0.87% in 2023. The report noted that New York was excluded from the national analysis due to data limitations.

ATTOM based its findings on data collected from county tax assessor offices across the country and used automated valuation models (AVMs) to estimate market values for single-family homes. The resulting effective tax rate reflects the annual tax burden as a percentage of market value within each geographic area.

The drop in effective tax rates comes as home values rebounded nationwide. In 2024, the average estimated home value rose 4.8% to $486,456, reversing a 1.7% decline in 2023, the first national dip in home prices in years.

Despite the modest increase in property tax bills, homeownership affordability remains strained across the country. ATTOM’s separate affordability report for Q1 2025 found that median-priced homes and condos remain less affordable than historical averages in 97% of analyzed counties, underscoring the continued pressure from high home prices and interest rates.

The national median home price dipped slightly in early 2025 to $351,000, reflecting typical seasonal slowdowns during the winter months. However, with mortgage rates still hovering near 7%, the decline has not been enough to restore affordability.

Barber noted that regional tax burdens continue to vary sharply, with homeowners in the Northeast and Midwest generally facing higher effective tax rates and home values, which often support more extensive local services. In contrast, property tax burdens in the South and West tend to be lower, reflecting both lower home values and regional tax structures.

If Ivy League Universities Paid Property Taxes, Cities Could Gain Big – but It’s Complicated
After President Donald Trump publicly called for Harvard’s tax-exempt status to be revoked, Ivy League universities – many of which have clashed with Trump on political and cultural issues – could face serious consequences. One of the most sweeping and financially significant would be a sudden, unprecedented property tax burden.

In many small New England and Northeastern towns, Ivy League schools are among the largest landowners – which means they’ve long avoided what would otherwise be some of the area’s biggest property tax bills.

For example, in the city of Cambridge, MA, Harvard owns as much as 9.56% of the land there, plus an additional 5.7% in nearby Allston and 0.27% in Boston – even though the university is famously not in Boston.

So, how much would these universities be on the hook for if they had to pay their share of property taxes like local homeowners? The answer is more complicated than one might think.

Even if tax-exempt status were revoked, assigning a dollar value to Ivy League–owned property is far from simple, says Kim Rueben, senior adviser at the Lincoln Institute of Land Policy.

Unlike standard commercial or residential parcels, much of the land held by these universities is developed with highly specialized buildings – labs, libraries, dormitories, and academic halls – that don’t have obvious market comparisons.

“So there’s the value of the land, and then there’s the overall value of the property, which it’s hard to totally know,” adds Rueben.

Many of these facilities are purpose-built, making their market value unclear. For example, a cuttingedge neuroscience lab or a historic chapel might cost tens of millions to construct, but have little resale value outside the university context.

And even if the buildings were easy to price, disentangling their worth from the universities themselves poses a bigger, more pressing challenge.

In places like Princeton, Cambridge, or Hanover, the institutions aren’t just occupants – they’re economic anchors. The land’s value, in many cases, exists because the university is there.

This feedback loop complicates the already opaque task of assessment. Local governments would need to decide whether to tax these properties like they would a luxury condo or a biotech office park – and how to do so consistently. Without precedent, clear benchmarks, or traditional market sales to rely on, any shift to taxable status would demand a new approach to valuation entirely.

While universities may avoid traditional property tax bills, they often contribute to their communities in other ways – through tutoring programs, community partnerships, public health services, and job creation. In many cases, these in-kind contributions support the very services property taxes are meant to fund: public services like health care, education, and public safety.

Most university towns recognize this and have chosen to opt for Payment in Lieu of Taxes (PILOT) agreements or similar arrangements, which scale back requested support from universities. “The communities are recognizing that there are benefits coming from the [universities], and so they’re decreasing the amount of money that they’re currently asking for,” says Rueben.

The result is a kind of informal balancing act: While Ivy League schools may not pay full taxes, they remain deeply embedded in – and essential to -the fiscal and social fabric of the cities they call home.

Even if the federal government were to revoke universities’ tax-exempt status, it’s far from certain that cities and states would move to tax these institutions at full market value. Local governments often weigh more than just lost tax revenue, and consider economic impact, public perception, and legal precedent when weighing new taxes.

For one, taxing these schools suddenly and aggressively could risk souring a mutually beneficial relationship. Plus, there may even be constitutional protections at the state level that complicate or limit taxation efforts. Harvard University’s rights, for example, are enshrined in the Massachusetts Constitution, which predates both the United States’ Constitution and creation.

To avoid these legal and interpersonal pitfalls, municipalities may continue pursuing partial solutions – like updated PILOT agreements or negotiated contributions – that preserve institutional goodwill while recovering some lost tax revenue.

Let’s say cities threw caution to the wind. Suppose, given the legal and political green light, municipalities across the Northeast decided to fully tax Ivy League universities for the property they own.

While it’s impossible to calculate their exact tax liability without formal assessments, available estimates suggest that Ivy League schools could collectively owe more than $884 million annually in property taxes.

For many of the cities and towns these universities call home, that kind of revenue could be transformative – funding schools, repairing infrastructure, expanding transit, and shoring up essential public services. But taxing these institutions could just as easily disrupt local economies, displacing key talent and weakening the very engines that drive growth.

The debate isn’t just about dollars and cents – it’s political, legal, and deeply entwined with the longstanding, and often symbiotic, relationships between Ivy League campuses and the communities built around them.

New York: Land value tax pilot program proposed to make New York housing affordable
On the eve of Tax Day, Democratic state legislators introduced a bill that would shift property taxes to a land value tax. Sponsors say transforming the current system would blunt the effects of the housing crisis statewide.

Land value taxes levy the value of unimproved land itself, rather than buildings or improvements on it. Taxing the value of the land itself is supposed to discourage property owners from speculation – holding onto vacant or underutilized land while waiting for prices to rise, a major factor driving up unaffordability – while encouraging them to develop the property for housing.

State Senator Rachel May proposed S1131A/A3339A alongside Assembly members Tony Simone and Alex Bores. They said that the current system lets landowners pay less than they should for the real value of a property. Plus, it puts an arbitrary or potentially damaging limit on a finite, in-demand public resource.

The proposal would realign tax incentives, reduce wasted urban space, and prioritize long-term, community-oriented goals in New York’s housing market. It would establish a pilot program in as many as five municipalities statewide, wherein the Department of Taxation and Finance would classify real estate in two groups: land only and buildings on land. The program would impose a higher tax rate on land and a lower rate on buildings, spurring construction and lowering housing costs. “Implementing a land value tax in New York could be a powerful tool to unlock underutilized land, incentivize development, and create a more equitable and efficient housing market,” Simone said.

To apply, local elected bodies would have to pass a law, and local school districts would have to pass a resolution. Municipalities with over 50,000 residents could carve out a particular neighborhood or area to participate in the pilot. The tax department would then notify the municipality’s chief executive and the leaders of the Assembly and State Senate once selected.

This approach and similar reforms spurred economic growth and improved urban spaces in other states, according to experts at the Center for Land Economics and the Community Service Society of New York. The bill would abandon the current “ad valorem” – Latin for “according to value” – system. Land value tax would pressure those who sit on empty land instead of rewarding them with low tax bills to drive up local housing.

The change could increase affordable housing, reduce homelessness, and assess fairer tax bills for people struggling with rising costs of living. “In November, New York’s voters spoke loud and clear that cost of living remains a central issue,” Bores said. Bores, Simone, and May circulated a link to a petition that New Yorkers can sign onto in support of their legislation.

Colorado: The Season for Commercial Tax Assessments Has Arrived
Every two years, every Colorado county reassesses property taxes for real and personal property. The notices of valuation for the 2025-2026 cycle will soon be released on May 1. Now is the time for commercial property owners to prepare to review their assessment notices and decide whether it makes business sense to appeal those determinations. This is especially true given that many counties have in recent years become more aggressive in valuing commercial property as budgets have gotten tighter and counties see the prospect of increasing and collecting property taxes as an untapped revenue source.

Commercial property is valued based on consideration of three different approaches – the market approach, the cost approach and the income approach – to arrive at the “actual value” of the property. The market approach, which is also termed the sales comparison approach, requires analyzing the sale prices of recently sold comparable properties in the area, adjusting for size, location, amenities and other factors. The cost approach estimates a property’s value by assessing the cost of replacing or replicating the property, and often considers the costs of construction, land value and appreciation. For the income approach, which is used for income-generating properties such as commercial buildings, estimates are valued by capitalizing a property’s annual net operating income based on a capitalization rate that reflects market considerations and risk.

County assessors must consider each approach and weigh them based on what they believe most accurately captures a property’s value. For example, commercial properties are usually assessed primarily based on the income and sales comparison approaches. The assessed value is then multiplied by the commercial assessment rate, which is 27% for 2025, to arrive at the property’s assessed value. The assessed value is subsequently multiplied by the tax rates of relevant taxing authorities to reach the amount of property taxes owed.

Although notices of valuation will be sent on May 1, county assessors are required by law to limit consideration of information, such as a property’s financials, to the relevant “base period.” For the 2025 tax year, the relevant base period is Jan. 1, 2023, to June 30, 2024. While some information before the base period could be legally relevant if there is insufficient data available from the base period, data and information after June 30, 2024, including market conditions, cannot be considered in assessing the property’s value. This means that more recent economic events, such as the effect of the Trump administration’s tariffs, are irrelevant and not a basis for appealing an assessment.

Appealing a notice of valuation involves a multistep administrative process. Commercial property owners typically must postmark protests of the notices of valuation on or before June 8. However, because June 8 falls on a Sunday, the deadline this year is June 9.

If a protest is filed, the county assessor must make a decision and mail a Notice of Determination by the last regular working day in June, unless the county elects to extend the mailing date to Aug. 15.

The process does not necessarily end there. Property owners dissatisfied with the Notice of Determination may appeal to the county board of equalization by July 15. The county then conducts hearings through Aug. 5, unless the county opts to extend the deadline to appeal to Sept. 15, which in that case, the county conducts hearings through Nov. 1. The county board must provide notification in writing within five business days of the date of its decision. To expedite the process, some commercial property owners seek and receive administrative denials and have tax agents guide them throughout the process.

Finally, property owners still dissatisfied with the county board’s decision may appeal to either the Board of Assessment Appeals or the appropriate Colorado district court within 30 days of the date the decision was made. These appeals involve a discovery process (exchange of documents and information) and a trial or hearing. Owners usually hire both lawyers and appraisers to assist at this stage. Indeed, these trials and hearings often turn into a “battle of the experts,” where both the owner’s lawyers and the county’s lawyers elicit testimony and cross-examine expert appraisers.

EUROPE
UK: How a wealth tax could work in Britain

With rising concerns about inequality and the ballooning cost of public services, the idea of introducing a UK wealth tax is back in the spotlight. Targeting the richest members of society, a wealth tax is applied to the total value of an individual’s assets, such as property, investments and savings.

While the UK doesn’t currently have a “wealth tax” specifically, people do already pay tax on these assets – through capital gains tax, dividend tax and savings tax. However, some argue that a separate levy could help fund vital services by requiring the very richest to contribute more.

A wealth tax is a tax levied on the total value of an individual’s assets, rather than their income, according to Michaela Lamb, tax partner at chartered accountants, Gravita.

She said: “It typically applies to net wealth, including property, investments and other valuables above a certain threshold, less debt. It’s usually done on an annual basis, where you have to declare the net value of your assets at the end of the year.”

This type of tax is often proposed to reduce economic inequality by redistributing wealth from the richest individuals, helping to address the widening gap between the wealthy and the rest of society.

Were the UK to introduce a wealth tax, it would join a relatively long list of countries that already have this levy in place.

These include:

• Spain – Spain’s wealth tax is a progressive tax ranging from 0.2pc to 3.5pc on assets above
  €700,000 (£592,000), with rates varying depending on region. It also has a “solidarity tax”
  ranging from 1.7pc to 3.5pc on wealth over €3m.
• Norway – Norway’s wealth tax is charged at a rate of 1pc on wealth stocks exceeding NOK
  1.7m or 1.1pc on net wealth exceeding NOK 20m.
• Switzerland – This is charged at the cantonal level and covers worldwide assets. Rates vary
  by canton.
• France – France abolished its net wealth tax in 2018 and introduced a real estate wealth tax.
  This applies to real estate assets valued at €1.3m or above and the tax ranges to 1.5pc.
• Italy – Italy levies two taxes on foreign assets held by Italian residents – one on real estate
  and one on foreign financial assets, such as stocks and bonds.
• Belgium – The solidarity wealth tax rate is 0.15pc on securities accounts that reach or exceed
  €1m.
• Argentina – Argentina’s wealth tax rate ranges from 0.5pc to 1.1pc for 2025.
• Colombia – Colombia’s wealth tax rate ranges from 0.5pc to 1.5pc for individuals whose net
  worth equals or exceeds 72,000 Tax Value Units (UVT).

Back in 2020, the Wealth Tax Commission suggested a one-off 5pc UK wealth tax on individual wealth (after mortgages and other debts), payable in 1pc instalments over five years.

“The Commission suggested that this could raise £260bn if applied to individuals with assets over £500,000, or £80bn if applied to individuals with net wealth of over £2m,” Christopher Massey, senior lecturer in British Politics and History at Teesside University.

However, some Labour MPs have instead proposed an annual 2pc wealth tax on assets exceeding £10m, claiming it would raise £24bn a year.

More than 30 MPs and peers from different parties wrote a letter to Rachel Reeves ahead of the Budget in October 2024, urging her to introduce this 2pc wealth tax – a call that has been reiterated this year.

Ms Lamb added: “If the Government wanted to do this, it would be a matter of calculating the value of assets at the end of every year and applying a percentage to this. Most probably, it would be dealt with under self-assessment, in the way that both income tax and capital gains taxes are.”

However, the Wealth Tax Commission has warned an annual wealth tax may not be the best way to raise revenue from the rich, due to high administration costs, and has said there are more economically efficient alternatives.

“An option would be to reform existing taxes on wealth including inheritance tax, capital gains tax and even council tax, to make them more progressive.

Council tax, for example, is a regressive tax that disproportionally impacts lower-income households and has been out of date for decades,” said Mr Massey.

Benefits of wealth taxes

Some of the benefits of introducing wealth taxes could be as follows:

• Raises public revenue – Implementing a wealth tax could raise substantial revenue for the
  Government, which could be used to reduce national debt or fund public services like the
  NHS.
• Reduces wealth inequality – A wealth tax can help address growing disparities in wealth,
  reducing the gap between the very rich and the rest of society.
• Targets wealth, not income – While income tax focusses on yearly earnings, which can
  fluctuate, a wealth tax targets accumulated wealth, which tends to grow steadily over a long
  time.
• Favoured by the public – Research highlighted by the Wealth Tax Commission shows that
  many people prefer tax increases to fall on wealth rather than income.

Issues with wealth taxes

One of the biggest issues with wealth taxes is that in practice, they often don’t work, according to John Barnett, partner at law firm Burges Salmon.

He said: “Almost every country that has introduced one has found that it has raised far less than anticipated.”

Some of the reasons for this include:

• It’s often difficult to administer – Introducing a wealth tax can be expensive due to the
  complexity of tracking wealth and the significant resources and expertise required to
  implement it effectively.
• Capital flight and tax avoidance – The wealthiest individuals may choose to leave the country
  or move their assets offshore to avoid the tax. This undermines the goal of raising more
  revenue.
• Difficulties in valuation – “Accurately valuing all forms of wealth, especially illiquid assets like
  private companies or property, is complex and resource-intensive,” said Simon Harrington,
  of the Personal Investment Management & Financial Advice Association (PIMFA).
• Liquidity issues – Wealth taxes are levied on assets, not cash flow, meaning taxpayers may
  owe money without having the liquidity to pay it. This can be especially burdensome for
  those who are asset-rich but cash-poor, such as retirees with valuable property.

A further issue is that over time, governments often come under pressure to introduce exemptions to the wealth tax, which waters down how effective it is.

Mr Barnett said: “Almost every country around the world starts with good intentions but then succumbs to pressure to exempt pension funds; then to pressure to exempt businesses; and then to pressure to exempt people’s main homes.

“But as soon as you exempt those three categories, 90pc of the tax-base disappears. And when you introduce exemptions, people then invest their wealth into those assets.”

 

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