We hear about property taxes every year and in some states, leaders are trying to move away from them entirely instead of simply reforming the taxes that fund schools and many public services, according to Realtor.com.
State lawmakers have tinkered around the edges of property tax reform, capping increases, compressing rates, and carving out relief for the most burdened of homeowners for decades.
But this year, at least five state legislatures are changing course and moving to eliminate property taxes outright.
What has caused this drive for elimination?
It’s a mix of election-year pressure, swelling assessments, and an affordability crisis that’s squeezing longtime homeowners on fixed incomes, which is fueling a new wave of proposals, Realtor.com said.
A Time to Rethink How Public Services are Funded
According to the report, plans vary in structure and ambition, but all share one thing: a belief that it’s time to fundamentally rethink how states fund public services and who’ is footing the bill.
“Some of these states, namely Texas, have high property tax rates that are unpopular among voters, especially when the state runs a budget surplus nearly every year,” said Joel Berner, Senior Economist at Realtor.com. “The rest have all seen major increases in the taxable value of homes that are leading to higher property tax burdens.”
Realtor.com said it’s that tension that’s pushing states to test just how far voters and budgets are willing to go.
Of the states experimenting with property-tax abolition, North Dakota has come furthest toward a workable funding model, Realtor.com reported.
Gov. Kelly Armstrong has a plan that would commit roughly $483 million from the state’s general fund, plus future earnings from the oil-tax savings account, to offset property tax cuts and credits. Realtor.com noted.
“This plan is aggressive, durable, and responsible,” Armstrong told lawmakers.
Primary-Residence Tax Credit
Armstrong’s proposal builds on North Dakota’s primary-residence tax credit and would deliver up to $1,550 in initial annual relief per household. That credit would increase every two years and gradually rely more on oil-tax earnings over time, while a 3% cap on annual growth in local property-tax budgets limits future increases, Realtor.com reported.
When combined with an expanded property-tax credit for income-eligible seniors and people with disabilities, Armstrong says his plan would “eliminate property taxes for an entire class of homeowners who need that relief the most, and it would put the bulk of primary residences on a path to zero within the next decade.”
Realtor.com said that could make a significant difference for North Dakota homeowners under pressure. The state’s median home price is about $342,400, and the median property tax bill tops $3,000 a year, according to data from Realtor.com.
Not all states have oil and gas windfalls to fund bold tax experiments, however.
Further south, Georgia and Florida are battling in the state legislature to approve ballot initiatives that would end property taxes while scrambling to find alternative funding sources.
In Georgia, Republican legislators, including state Rep. Jon Burns, have backed a plan to eliminate most homeowner property taxes by 2032.
That proposal would begin with a $1 billion state outlay to reduce current property tax burdens, followed by an increase in the exempt value of primary residences from $5,000 to $150,000 in 2031, and eliminating most property taxes the next year.
Billed Directly by Local Governments for Services
To replace the revenue, homeowners would be billed directly by their local government for services like garbage pickup, stormwater control, and fire protection, while any government or school improvements would need to be approved by voters, Realtor.com said.
Sales taxes are more volatile than property taxes and vary widely by region and economy, as shown by Florida.
While momentum has been building since early 2025 to eliminate property taxes on homesteads in Florida, replacing the lost revenue would require lawmakers to almost double the statewide sales tax rate—from an average of 7.02% to a whopping 15.34%—just to offset the shortfall, not including the likely behavioral changes that would erode collections further.
That’s according to an analysis from the Tax Foundation’s Jared Walczak.
Still, Realtor.com noted, state lawmakers floated more than seven different proposals last year aimed at softening or phasing out property taxes, mostly focused on primary residences.
But Florida Gov. Ron DeSantis has hit the brakes on this “throw everything at the wall and see what sticks strategy.” Rather than backing multiple bills, DeSantis urged lawmakers to consolidate their efforts behind one clearly defined ballot initiative that stands a real chance with voters, even teasing the possibility of a special session.
In Texas, Gov. Greg Abbott has made eliminating school property taxes a marquee issue heading into the 2026 election.
While Texas lawmakers passed a series of tax relief measures in 2023 and 2024, including rate compression and homestead exemptions, Abbott repeatedly has said those changes don’t go far enough.
“Every single year, you, my constituents, keep saying our property taxes are too high,” Abbott told supporters in late 2025 at a campaign stop. “We have to do more to lower them.”
Buying Down School Property Taxes
Abbott has floated a long-term plan to use state surpluses to buy down school property taxes until they can be phased out entirely, Realtor.com reported. So far, a clear road map to replace the lost education funding remains elusive.
With Abbott’s backing and broad support from conservative voters, the idea has become a central talking point and a test of whether one of the largest and most complex school funding systems in the country can be reimagined, Realtor.com said.
Indiana is throwing its weight behind a full-scale property tax repeal. In a post on X, Lt. Gov. Micah Beckwith placed property tax elimination as his top priority for the 2026 legislative session.
Beckwith is backing House Bill 1288, one of the most sweeping proposals in the country. It would abolish the assessment of tangible property after Dec. 31, 2026, and end property tax collection entirely beginning in 2027.
Broadened Sales and Use Taxes
To offset the lost revenue that currently funds local services, HB 1288 proposes broadening Indiana’s sales and use taxes to include most services—everything from legal fees to haircuts—and redistributing that revenue through a local government sharing fund.
Realtor.com noted that for every promise to eliminate property taxes, there’s an inescapable fiscal truth: Property taxes account for 70% of local revenue, 90% of school funding, and 25% of all state and local tax revenue in aggregate, according to Billy Hamilton, Deputy Chancellor Emeritus, Texas A&M University.
Replacing that revenue requires a level of long-term financial engineering that few lawmakers have fully worked out, Realtor.com noted.
Even in proposals that bank on redirection of general fund dollars or dividends from oil tax savings, the math remains stubborn, Realtor.com said. Property taxes are unusually stable and predictable, but sales and income tax revenues, by contrast, are more volatile, especially during economic downturns.
That’s why the most ambitious plans are also the most fraught, Realtor.com said. Eliminating property taxes means either slashing services, shifting the burden to more regressive taxes, or hoping for a level of economic growth and political consensus that rarely holds over time, the website said.
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