Voters Approve Property Tax Overhaul in Georgia, More Limited Reforms Elsewhere

In November, voters in seven states weighed in on property tax ballot measures that could dramatically affect those states’ revenue. After a year in which several legislatures took on property tax reform, these efforts to bring critical questions directly to voters revealed a growing impatience for tax relief in some parts of the country.

The most significant—and complicated—measure to pass was in Georgia.

Approved with nearly 63% of the vote, Amendment 1 alters how the state assess homes by using 2025 assessed values as a “base year” and limiting annual increases in value thereafter to the prior year’s inflation rate—regardless of real estate dynamics. The assessed value resets to the market value only when a home is sold. As a result, new owners will pay taxes on a significantly higher value, creating a dramatic tax disparity. The change also means that government investments in services and community amenities that tend to be good for real estate values will no longer directly result in higher tax revenue.

Further, some tax experts, including Andrey Yushov and Joseph Johns of the conservative-leaning Tax Foundation, worry that the measure could lead to “a harmful property tax structure” that discourages homeowners from selling, constraining the supply of available homes, especially for new prospective homebuyers.

Georgia’s amendment does allow counties, municipalities, and school systems to opt out of the exemption—but only if they pass a resolution and hold three public hearings by March 1, 2025. Localities that don’t opt out can implement a 1% local sales tax increase to offset lost property tax revenue. But critics have warned that this offset may not be sufficient to fully replace the lost revenue and that local governments may turn to increased fines and fees to make up the gap—as happened in California after that state passed a similar measure, Proposition 13, in 1978.

Florida voters also approved a property tax relief measure tied to inflation, but it’s more limited than Georgia’s change. Amendment 5 revises the state’s homestead exemption (which extends to all taxes except those that support school districts) from the current fixed $25,000 to one that will adjust for inflation starting Jan. 1, 2025.

Even so, the fiscal impact will add up, according to the Florida Policy Institute (FPI), a left-leaning think tank, as the measure forces local governments “to either cut programs and services or raise taxes to make up for the lost property tax revenue.” FPI estimates that the measure will cost local governments in the state more than $400 million in the first five years, and $140 million annually thereafter.

Elsewhere, successful property tax ballot measures provided focused relief. In Arizona, voters approved Proposition 13, which allows residents to request yearly property tax refunds to cover costs incurred when municipalities fail to address public nuisances on their property. And voters in three states— Colorado, New Mexico, and Virginia—approved expanded eligibility for property tax exemptions for disabled veterans, while New Mexico voters passed a constitutional amendment to raise veterans’ property tax exemption from $4,000 to $10,000, with annual adjustments for inflation.

‘Chaos’ averted in North Dakota

The only statewide residential property tax ballot measure that didn’t pass was arguably also the nation’s most controversial. North Dakota’s Initiated Measure 4 would have eliminated property taxes, placed debt limits on local governments, and required the state to reimburse localities for their lost property tax revenue— an amount equivalent to 40% of North Dakota’s $6 billion general fund biennial budget.

Supporters argued the state could pay for the measure by redirecting funds or eliminating certain business tax breaks, but opponents contended that it would require substantial spending cuts. For example, state Representative Mike Nathe (R) warned that funding for Medicaid expansion, nursing homes, hospitals, and education programs would be threatened. “It would be absolute chaos for the Legislature and for the appropriations process, something that we’ve never done before,” Nathe told the Associated Press.

A property tax push-back

Although North Dakota’s measure failed, it reflects a growing political appetite for restricting—and even eliminating—property taxes. North Dakota had a similar ballot measure in 2012, but 76.5% of voters struck it down. In November, the margin was still wide, though closer, with 63.5% against and 36.5% in favor.

And this shift toward ending property taxes is beginning to emerge in other states as well. This year, a Michigan group called AxMiTax couldn’t secure enough signatures for its measure to eliminate property taxes but has already vowed to try again. And in Nebraska, supporters of a proposal to replace all taxes with a consumption tax that also failed to make the ballot have said they are considering future efforts.

Jared Walzack, vice president of state projects at the Tax Foundation, notes that although discussions of repealing property taxes have traditionally taken place on the fringes, the tide seems to have shifted. “It’s one thing to have this ongoing low murmur; it’s another thing to have it start to bubble up to the surface. That seems to be where we are going now,” he told MarketWatch.

This year’s anti-property tax initiatives have also prompted legislative action. In Colorado, conservative groups behind two property tax initiatives that were set to be on the November ballot negotiated with lawmakers to pull the measures in exchange for further legislative action on property tax relief. At the end of August, the Legislature, which had already passed a property tax reform bill during the regular 2024 session, reconvened for a special session to enact additional cuts and a cap on property tax revenue growth.

Final thoughts

Although voters rejected the most extreme property tax proposals, the number and relative success of property tax reform ballot measures in 2024 suggest that demand for meaningful relief is unlikely to fade. With housing costs rising in much of the country, states are likely to face continued pressure to reduce—or substantially curtail—property taxes while also ensuring adequate funding for government services.

Riley Judd works on The Pew Charitable Trusts’ Fiscal 50 project.