CFED Scorecard

CFED Assets & Opportunity Scorecard

Property Tax Relief Reports & Graphics Policy Brief

Overview

States that Provide Property Tax Relief via Well-Targeted Circuit Breaker

Property taxes are an important revenue source for local governments, but they can be a heavy burden for low- and moderate-income families, particularly those whose housing costs have increased faster than their incomes. Even in periods when home values decline, tax burdens may continue to rise due to the way states and localities calculate property tax. States have used many strategies to reduce property tax burdens, including those that provide relief more widely to all homeowners, e.g., homestead exemptions and assessment caps. More effective, however, are programs targeted at homeowners that need relief most.

What States Can Do

Property tax “circuit breakers” provide households with direct property tax relief that increases as household income declines. Circuit breakers kick-in when property taxes exceed a certain percentage of a household's income and provide a rebate or tax subsidy for qualifying households. Although states often use age (i.e., being elderly) or disability as a proxy for financial need, property tax circuit breakers that are available to lower-income working-age homeowners and renters better target community need.

Strength of State Policies: Property Tax Relief

Does the state provide property tax relief via a well-targeted circuit breaker? 1
StateWell-targeted
circuit-breaker?
Eligibility requirements
Alabama    — 
Alaska    — 
Arizona    Elderly only 
Arkansas    — 
California    Elderly and disabled only 
Colorado    Elderly and disabled only 
Connecticut    Homeowners only 
Delaware    — 
District of Columbia    All groups eligible 
Florida    — 
Georgia    — 
Hawaii 2   — 
Idaho    Homeowners only 
Illinois    Elderly and disabled only 
Indiana    — 
Iowa 3   Elderly and disabled only 
Kansas    Elderly, disabled, persons with one or
more dependent children under age of 18 
Kentucky    — 
Louisiana    — 
Maine    All groups eligible 
Maryland    All groups eligible 
Massachusetts    Elderly only 
Michigan    All groups eligible 
Minnesota    All groups eligible 
Mississippi    — 
Missouri    Elderly and disabled only 
Montana    Homeowners only 
Nebraska    Elderly and disabled only 
Nevada    Elderly only 
New Hampshire    Homeowners only 
New Jersey    Homeowners only 
New Mexico    Elderly only 
New York    All groups eligible 
North Carolina    Elderly and disabled only 
North Dakota    Elderly and disabled only 
Ohio    — 
Oklahoma    Elderly and disabled only 
Oregon    — 
Pennsylvania    Elderly and disabled only 
Rhode Island    All groups eligible 
South Carolina    — 
South Dakota    Elderly and disabled only 
Tennessee    — 
Texas    — 
Utah    Elderly only 
Vermont    All groups eligible 
Virginia    — 
Washington    Elderly and disabled only 
West Virginia    Elderly, disabled, or
homeowners only 
Wisconsin    All groups eligible 
Wyoming    Elderly and disabled only 

Notes on the Data

1. "Significant Features of the Property Tax," Lincoln Institute of Land Policy and George Washington Institute of Public Policy. (Accessed June 29, 2013). States receive credit if they: a) offer a state-funded property tax circuit breaker and b) open program eligibility to working-age, non-disabled homeowners and renters. All states offering property tax circuit breakers impose income-based eligibility restrictions. CFED does not take any income limits imposed by the state into account when grading this policy measure.

2. Hawaii offers a state-funded circuit breaker program, but each county applies its own qualifications. In Maui, all homeowners are eligible; in Honolulu, only elderly residents qualify. The circuit-breaker program is not in place in all counties.

3. Beginning in 1995, an Iowan who has attained the age of 23 or a head of household and was not claimed as a dependent on any other person's tax return for the base year is eligible by statutes for this program if they meet income requirements. However, the state has never provided funding for this portion of the program.

What States Have Done

Although 34 states provide some form of property tax circuit breaker, in only 10 are renters and working-age homeowners eligible to receive the credit.

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