Florida is home to three of the five major U.S. metros where property tax bills have increased most since before the pandemic, exacerbating the difficulty of affording a home in the Sunshine State. That’s according to a new report from Redfin. Learn more about how Tampa property taxes have risen along with Jacksonville and Miami.
The median monthly property tax bill has risen most over that period in Indianapolis, where the typical homebuyer pays 66.7% more today than they would have in 2019, bringing their monthly tax bill to $205. Atlanta comes in second, with a 65.8% increase to $239.
Next come three Florida metros: Jacksonville, where property taxes have increased 59.6% to $228 since 2019, Tampa (56.7% to $250) and Miami (48.1% to $367). This is according to a Redfin analysis of property taxes for single-family homes among the 50 most populous U.S. metropolitan areas, as of August 2024.
What’s happening in Florida?
Property taxes have surged in Florida over the last five years for several reasons:
- Rising home values. Florida’s home values have skyrocketed over the last half-decade, partly due to the pandemic-driven homebuying boom in the Sunshine State, with many out-of-town buyers moving in and pushing up prices. While Florida prices have since fallen from their peak, assessed home values–which drive property tax bills–are much higher than before the pandemic.
- The increasing frequency and intensity of natural disasters. Florida has increased property tax rates to invest in climate-resiliency projects. Property taxes are an especially important way for governments to pay for those projects in states like Florida and Texas that don’t have state income taxes.
- Florida’s increasing population. The state’s increasing population has also caused increased demand for government services, like schools and roads, which can motivate municipalities to raise taxes; inflation also plays a role because those services cost more than they used to.
“Florida was alluring for remote workers during the pandemic because of its relatively affordable housing. Somewhat ironically, the state’s population boom has driven up home prices, and property taxes along with it,” said Elijah de la Campa, a senior economist at Redfin. “The cost of owning a home has gone from affordable to unaffordable for a lot of local Florida residents and out-of-towners. Home prices that are much higher than in pre-pandemic times and the disaster-driven surge in HOA and insurance costs are now pricing homebuyers out of the market. The increase in property taxes is the last straw for some prospective buyers. Homebuyers have realized they may save money by paying no income tax, but their property tax bill will increase.”
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Demand for homes in Florida has already fallen, and Redfin economists expect it to keep falling because homes are no longer affordable enough to make up for increasingly destructive natural disasters.
Increasing home values and inflation are also major drivers for the big property tax increases in Indianapolis and Atlanta. It’s worth noting that there are many idiosyncratic reasons municipalities raise property taxes, and those aren’t captured by Redfin’s metro-level analysis; for instance, perhaps a government issued a big new bond or a new administration is making a major infrastructure investment. In Atlanta, for example, taxes increased from 2019 to 2023 partly because budgets for parks and city operations increased.
Nationwide, property taxes, in dollars, have increased nearly 30% since 2019 to a monthly median of $250. The average effective tax rate across the U.S. is 0.67%, down from 0.77% in 2019; the effective tax rate has declined over that period because home prices have increased more than the tax rates set by local governments. Even though the effective tax rate nationwide has declined, homeowners feel the burden of increasing property taxes because they’re paying more, in dollars, than they used to.
