A tax credit or rebate occurs when a state or other taxing authority refunds a portion of the property tax to property owners, perhaps through an income tax credit. This type of relief has been on the rise in recent years as higher tax bills have resulted from the run-up in home values, Waisanen says.
A tax deferral allows the homeowner to postpone payment of all or part of the property tax until a later time, such as when the home is sold.
Another form of relief is a so-called "tax swap," which replaces a portion of property tax revenues with an increase in the state sales tax. The tax swap is "a mini-trend" that a few states, notably Idaho and South Carolina, have implemented and others "are looking at to see whether they can reduce the overall reliance on the property tax," Waisanen says.
Deferrals are targeted to:
- Low-income households.
- Seniors of modest means.
Yet Sepp warns that tax swaps don't necessarily mean lower taxes overall. This distinction is an important point for job-seekers or retirees who wish to relocate across state lines because a lighter property tax could be outweighed by other heavier taxes.
"Hawaii is a prime example," Sepp says, "Hawaii has by far the lowest property tax burden, but the income tax burden there is horrendous. So overall, you might be paying more in taxes there than you would in New Hampshire, for example, where the situation is exactly the opposite."
The Tax Foundation, a nonpartisan tax research group in Washington, D.C., has published a county-by-county chart of property taxes on owner-occupied homes based on 2006 U.S. Census Data. Certain counties in New York and New Jersey have the highest median property taxes in the nation, according to this data.
Property taxes are unpopular, Waisanen admits, but they're also necessary -- they account for 70 percent, or more than two-thirds, of local governments' revenues across the country. Homeowners may feel unfairly targeted by this particular tax burden, but the bottom line is that property taxes, in most places, pay for schools, libraries, fire departments, police officers, street lights and many other public benefits.
Marcie Geffner is a freelance real estate reporter in Los Angeles.